Fundamentals of Macroeconomics

Topics: Inflation, Gross domestic product, Final goods Pages: 2 (690 words) Published: October 28, 2013


Fundamental of Macroeconomics
ECO/372

There are many words out there that people do not think about all the time but these terms are mainly used in the business world. These words are Gross Domestic Product, Real GDP, Nominal GDP, Unemployment rate, Inflation rate, and Interest Rate. Gross Domestic Product is defined as the market value of all the final goods and services produced within a country during a given period. Real GDP is considered to be a nation's total output of goods and services in a given time period and has been adjusted for price changes. Nominal GDP is an evaluated GDP at the current market prices. All of the different terms that go along with GDP all explain different values what a country sells when it comes to their goods and services. Unemployment rate is the percentage in a city, town or state even as big as the country that shows the percentage of how many people do not have work. When people become unemployed it is reported to the government and they have to keep up with the percentage rate of how many people are unemployed and this has to be kept up with because it cannot get to high otherwise there could be more problems within the government. Most of the time the unemployment rate will fluctuate depending on what is going on in the economy and it will never stay the same. Inflation rate is the rate of how much goods will increase in price depending on the simple case of supply and demand. If something is in very high demand then the cost might go up or down really depending on how much supply is out there for that product. Interest rate is the rate of interest and the best example for that would be Credit cards and loans. When you get a credit card you have a specific interest rate, so when you have a 500 dollar limit with a 10% interest rate you will pay 10% of that 500 on each month that goes by.

When it comes to purchasing of groceries this is an activity that affects mainly the households but...
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