Fundamentals of Macroeconomics Paper
Table of Contents
II. Define and Explain the Following Terms
A. Gross Domestic Product (GDP)
B. Real GDP
C. Nominal GDP
Explain How These Activities affect Government, Households, and Businesses A. Purchasing of Groceries
B. Massive Layoffs of Employees
C. Decrease in Taxes
In this paper for the fundamentals of macroeconomics, I will be discussing gross domestic product (GDP), real GDP, nominal GDP, the unemployment rate, the inflation rate, and the interest rate. Along with those terms, I will explain how purchasing of groceries, massive layoff of employees, and the decrease in taxes affect the government, households, and businesses. Define and Explain Gross Domestic Product (GDP)
Gross domestic product or GDP for short is defined as a main indicator that is used to measure the country’s economy. The best way to understand a country’s economy is to look at the GDP. The GDP measures all of the output for the country and includes everything produced in that country. Gross domestic product is estimated in three ways and they are; expenditure basis, which is how much money was spent, output basis, which is how many goods and services, were sold, and income basis, which is how much income, was profited.
Define and Explain Real GDP
Real gross domestic product is by assessing the market prices of a certain year while taking inflation into factor. A company could use the real GDP to suggest the standard of living within a country so it can help the company decide whether or not that their products will be successful. An example of how you get the figures is to choose a base year such as 2005, taking the quantities of all the goods and services purchased in 2013 and multiplying them by their 2005 prices figure out then the...
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