Fundamentals of Microeconomics

Good Essays
Fundamentals of Macroeconomics
Ashley Heard
Principles of Macroeconomics-ECO/372
November 19, 2012
Sharon Bush
University of Phoenix
Fundamentals of Macroeconomics Macroeconomics defined as “the study of the economy as a whole, which includes inflation, unemployment, business cycles, and growth” (Colander, G-5). There are many fundamentals that affect the economy in both a good and bad way. These fundamentals affect the economy, and they also show the growth of the economy. The fundamentals are gross domestic product (GDP), real gross domestic product, nominal gross domestic product, unemployment rate, inflation rate, and interest rate.
Defining the fundamentals Gross Domestic Product is “the total market value of all final goods and services produced in an economy in a one-year period” (Colander, G-3). GDP calculation is very important because it calculates the growth, decline, or stand still have the economy. When the GDP is calculate, it is base on previous numbers not future numbers. For example, the GDP is +2%, which means a growth of 2% for the previous year. Real Gross Domestic Product (GDP) is “the market value of final goods and services produced in an economy, stated in the prices of the giver year” (Colander, G-7). Real GDP is an inflation measure of the production of goods and services in the economy. It reflects price changes throughout the year. The real GDP is base more on realistic numbers instead of a guess. The calculation is more accurate concerning the gross domestic product for the previous year. Nominal gross domestic product is calculate at existing prices. Nominal GDP does not reflect inflation and is known as “current dollar GDP.” Nominal GDP can either be higher or lower than the GDP. When nominal GDP is calculate without reflecting inflation, which can show a higher growth in the economy when it is lower or at a standstill. Unemployment rate is “the percentage of people in the economy who are



References: Colander, D.C. (2010). Macroeconomics (8th ed.) Boston, MA: McGraw-Hill/Irwin. (Pages G-3, G-4, G-6, G-7, & G-9).

You May Also Find These Documents Helpful

  • Good Essays

    Fundamentals of Microeconomics In the world today product and services are both key to the survival of mankind. Depending on the demand from consumers, companies will see an increase or decrease of the items they produce or the service rendered. In the article of trends in US gasoline and ethanol use and petroleum production and imports these items will be looked at; as well as a discussion of the fundamentals of microeconomics. First, in order to understand what the fundamentals of microeconomics…

    • 746 Words
    • 3 Pages
    Good Essays
  • Powerful Essays

    Fundamentals of Microeconomics

    • 29276 Words
    • 118 Pages

    BQOE II FUNDAMENTALS OF MICROECONOMICS Munzarina Ahmad Samidi Norehan Abdullah Jamal Ali Zalina Mohd. Mohaideen Project Directors: Prof. Dr. Mansor Fadzil Prof. Dr. Shaari Abd. Hamid Open University Malaysia Munzarina Ahmad Samidi Norehan Abdullah Jamal Ali Zalina Mohd. Mohaideen Universiti Utara Malaysia Wan Azman Saini Wan Ngah Universiti Putra Malaysia Lilian Kek Siew Yick Open University Malaysia Module Writers: Moderators: Translated & Edited: Pearson (M) Sdn. Bhd. Compiled…

    • 29276 Words
    • 118 Pages
    Powerful Essays
  • Powerful Essays

    Microeconomics

    • 1432 Words
    • 6 Pages

    Question 1) With examples give 5 reasons why the study of microeconomics is important. Microeconomics is a field of economic study that focuses on how an individual 's behaviour and decisions affect the supply and demand for goods and services. For the purpose of microeconomics, the actions of individuals, households and businesses are crucial, unlike the study of macroeconomics, which focuses on national and international economic trends. Despite the differences between the two fields, however…

    • 1432 Words
    • 6 Pages
    Powerful Essays
  • Good Essays

    Microeconomics

    • 699 Words
    • 3 Pages

    Microeconomics (from Greek prefix mikro- meaning "small" and economics) is a branch of economics that studies the behavior of individuals and small impacting players in making decisions on the allocation of limited resources (see scarcity).[1] Typically, it applies to markets where goods or services are bought and sold. Microeconomics examines how these decisions and behaviors affect the supply and demand for goods and services, which determines prices, and how prices, in turn, determine the quantity…

    • 699 Words
    • 3 Pages
    Good Essays
  • Good Essays

    Microeconomic

    • 1531 Words
    • 7 Pages

    whether each of the following statements applies to microeconomics or macroeconomics, and why: 12 Marks Total a. The unemployment rate in Canada was 7.0 percent in January 2010 Answer: This is the macroeconomic statement because it describes the unemployment rate of the whole country. b. A Canadian software firm discharged 15 workers last month and transferred the work to India. Answer: This is the microeconomic statement because it focuses in an individual Canadian…

    • 1531 Words
    • 7 Pages
    Good Essays
  • Good Essays

    Microeconomics

    • 1285 Words
    • 6 Pages

    EC 3101: Microeconomic Analysis II A/P Indranil A/P Indranil Chakraborty All relevant details on EC3101 are in the syllabus The morning office hours on Tuesday will start from the third week of lectures t tf th thi d k fl t Important Highlights Important Highlights • Text book: Intermediate Microeconomics: A modern h approach by Hal R. Varian (8th edition) One midterm and one final exam Please do not email material, lecture or exam related questions. Post your questions precisely on IVLE Forum or ask…

    • 1285 Words
    • 6 Pages
    Good Essays
  • Satisfactory Essays

    Microeconomics

    • 338 Words
    • 2 Pages

    from 200 to 400 pounds? 5. Can you explain why the answers to parts 3. and 4. above are not the same? What does this imply about the slope of the production possibility frontier? --------------------- References: Grading Rubric Microeconomics: Unit 2 Assignment: PPF and Opportunity Costs | Content | Points Possible | Points Earned | Draw production possibility frontier (PPF) | 3 | | Analyze feasible/infeasible production | 2 | | Compute opportunity cost of increasing annual…

    • 338 Words
    • 2 Pages
    Satisfactory Essays
  • Satisfactory Essays

    Microeconomics

    • 6504 Words
    • 27 Pages

    IB/AP Economics Unit 1 Introduction to Economics Introduction to Economics AP and IB Economics Unit 1 Definitions of social science and economics Definitions of microeconomics and macroeconomics Definitions of growth, development and sustainable development Positive and normative concepts Ceteris paribus Scarcity • factors of production: land, labor, capital and management/entrepreneurship • payments to factors of production: rent, wages, interest, profit Choice Utility: basic definition Opportunity…

    • 6504 Words
    • 27 Pages
    Satisfactory Essays
  • Powerful Essays

    Microeconomics

    • 8922 Words
    • 36 Pages

    MICROECONOMICS CHAPTER 1 The Market Economy What is to be done? —Lenin When future historians look back on the close of the 20th century, one of the most sweeping changes they will note is the collapse of centrally planned economies in Eastern Europe. It is not far off to say that the Cold War between the United States and the Soviet Union was won not by the armies of the United States and its allies, but by the productive power of Western market economies. Mikhail Gorbachev, then leader of the Soviet…

    • 8922 Words
    • 36 Pages
    Powerful Essays
  • Better Essays

    Microeconomics

    • 1188 Words
    • 5 Pages

    retail bank overcomes the limitations of thirty-year-old "legacy" microeconomics systems to launch a high-tech operation that offers its customers a complete range of banking services over the telephone. Another bank is able to roll out, within three months of an acquisition, information systems that deliver the same level of service to all customers at all branches, new and old. (Richard 2002, 177) For these companies, Microeconomics has genuinely become an enabler of change that boosts competitive…

    • 1188 Words
    • 5 Pages
    Better Essays