Economics Term Definition Paper

Topics: Unemployment, Economics, Inflation Pages: 3 (868 words) Published: October 1, 2008

Term Definition Paper
University of Phoenix
ECO 372- Daniel Rowe
June 11, 2008

Economics is used in almost all aspects of life. It is about choice and decision making. An understanding of economics will illustrate how to live and exist in our world today and understand how the business world functions. As the concept of economics is discussed, many terms are used to describe how economics works in the real world. These terms will be defined so that they will be understood throughout the discussion of the economy and market demand.

Term Definition Paper
To help understand the concept of economics, terms are defined and used to describe the economy and market demand. The terms Gross Domestic Product (GDP), Real Gross Domestic Product, Unemployment Rate, Inflation Rate, and Interest Rate, help to break down the analysis of economics and give a better understanding of the direction our economy is headed. This area of study gives further consideration to other concepts, like a circular flow diagram that illustrates the interaction of households, government, and business. Gross Domestic Product

Gross Domestic Product, or GDP, is a tool which helps measure the economic health and strength of a country. It is one way to measure the size of an economy via the total market value of all final goods and services produced within a country in a given period of time, usually one calendar year. GDP is usually expressed in relation to the previous year (Investopedia, 2008). For example, GDP in the United States in 2006 was 3.1%. In 2007 GDP was 2%. This means that the economy of the United States was up only 2% from the prior year, which is one percentage point below the national average of 3% (Bureau of Economic Analysis, 2008). Real Gross Domestic Product

Real GDP is the market value of final goods and services produced in an economy which is stated by prices in any...

References: Bureau of Economic Analysis. (2008). Regional Economic Accounts. Retrieved June 7, 2008 from
Harper College. (2007). Fiscal Policy. Retrieved June 7, 2008 from
Investopedia. (2008). Interest Rates. Retrieved June 7, 2008 from
Investopedia. (2008). What is GDP and why is it so important? Retrieved June 7, 2008 from
Investopedia. (2008). What is inflation? Retrieved June 7, 2008 from
Yahoo News. (2008). US Unemployment Rate Jumps in May. Retrieved June 7, 2008 from
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