Jerry L. Robinson
JUNE 07, 2012
Fundamentals of Macroeconomics Paper
Gross domestic product: is the value of all goods and services produced in a country in any given year or specific time period. This is measured in dollar amounts and basically the higher the GDP, the better the economy is for that country. Real gross domestic product: is nominal Gross domestic product that has been adjusted for inflation. This means that the quantity of goods and services must have the converted values for the prices to be made at the market price. The market price also sets the importance of how things will be purchased on the market. Nominal gross domestic product: is Gross domestic product that is calculated at existing prices. That means that the GDP is affected when the economy does when the output is measured for inflation. This is when prices for goods and services are either going to be higher or lower because of inflation. Unemployment rate: is the total percentage of workforce, who is unemployed and looking for a paid job. When the unemployment rate is up then there are less jobs out there for the people that are looking for employment. This in turn affects the businesses that had to lay off the workers due to low productivity; this also has an effect on the government because unemployment benefits aren’t taxable. Inflation rate: is the rate at which the general level of prices for goods and services are rising over a period of time. Inflation rate can also affect how families operate on a daily basis, inflation rate goes up, prices go up and the spending goes down. People don’t shop as much when the inflation rate has gone up, because the value of the dollar doesn’t go as far when the inflation rate has risen. Interest rate: The interest rate is the amount that a person pays back over and above the principle that has been borrowed from a lending institution. Most banks will lend you money at a low...