Premium Essay

Eco/372

In: Business and Management

Submitted By Mozart007
Words 917
Pages 4
Fundamentals of Macroeconomics
Gross domestic product can be described as a countries measure of goods and services produced in a particular interval based on value recorded in an annual period. The inclusion of public & private consumption (C), government spending/disbursement/expenditures (G), national investments for the purpose of expansion and further production (I), along with total net exports (Exports – Imports) (NX), are essential in its calculation. GDP=C+G+I+NX. GDP can be used as sign of a country’s ability to sustain the standard way of life for its people. Critics of its use as a measure argue that there are many more variables underground that go unreported and unaccounted for. The gap these variables create are large enough that they would have a significant effect on the results of calculation of GDP.
An inflation-corrected view of the GDP is the description of ‘real GDP’. It gives a more accurate numerical value of GDP. ‘Real-time’ price changes are important in most anyone’s view and is as important to grasp when making predictions, making cost evaluations, deciding on investments, and wide variety of other functions of accounting and economic activity and interpretation.
Nominal GDP can be considered to some as being somewhat useless. However, it can be useful in indirect dialogue of the GDP when discussing ‘general’ terms and ‘general’ numbers. The ‘general’ description of nominal GDP is the figure of GDP unadjusted for inflation. It can be awfully misleading. The misinformed of the ‘current dollar GDP’ will make assumptions based on non-facts. ‘Current dollar GDP’ being another term used to describe nominal GDP.

A country’s population that is actively pursuing employment and is currently willing to work would amount to its unemployment rate. It is a percentage of a country’s total labor work-force. Its value can be…...

Similar Documents

Premium Essay

Eco/372

...Fundamentals of Macroeconomics Essay I. Ojeda University of Phoenix ECO/372 June 26, 2013 Chris D. Foster Fundamentals of Macroeconomics Principles of Macroeconomics is the study of what people do or use to coordinate good and services, to understand economics we must know the fundamentals of economics. Macroeconomics is the decision making on how economics evolves in our everyday lives. Principles of Macroeconomics include a variety of terms that helps to determine the Economy in United States. Some of the terms by most economists are; Gross Domestic product (GDP), Real GDP, Nominal GDP, Unemployment rate, Inflation rate, and Interest rate. The first subject that I will cover and discuss on this paper will include Gross Domestic Product (GDP). What’s Gross Domestic Product (GDP)? Is the standard living through its goods and services within the market value in a country in a period of time. Is the value of the amount of how much each household and businesses can produce and report each year in United States. GDP can also be measured by adding up the value of the domestic expenditure made at the end of the year. Those expenditures can be described as consumption; government expenses, investment, and total spend on exports. How Microeconomics can be impacted by GDP is when showing potential and economics are able to see what was expected. This can be used during recession to tract how the country’s economy is doing......

Words: 1036 - Pages: 5

Premium Essay

Eco 372 Week 2

...Fundamentals of Macroeconomics Cleatus D. Payne ECO 372 July 18, 2013 Arnella Trent Part 1 Describe the following terms: Gross domestic product GDP is the market value price of good or product that a country pays during a certain time of the year. Real GDP is the output of countries products without measuring in inflation. Nominal GDP is where the market value of goods or products is higher than Real GDP. Unemployment rate is the rate of unemployed people who are faithfully seeking employment. Inflation rate is the rise in prices and the lack of being able to purchase products. Interest rate is the rate in which products are paid for at a different price depending on the rate given. Part 2 Economic activities: Purchasing of groceries, Massive layoff of employees and Decrease in taxes. The purchasing of groceries effects a household by the amount of groceries needed depending on the size of the family. The larger the family, the higher the grocery bills. This affects the government because of taxes being paid on the groceries the higher the taxes the less groceries a family may be able to purchase. Businesses are effective with prices rising less money being spent groceries that not an essential to a family. A massive layoff affects the household by no income no way to take care of the family. The government is effective by massive layoff because the government will have to pay unemployment. Businesses are affected because without sufficient......

Words: 710 - Pages: 3

Premium Essay

Eco 372 Week 2 Paper

...Economic Activities ECO/372 Principles of Macroeconomics June 24, 2013 Johnny Shull Abstract This paper will review and describe gross domestic product, real gross domestic product, interest rates, inflation and unemployment. This paper will also review the decrease in taxes, massive layoff, and the purchasing of groceries and how they affect households, businesses as well as the government. Everything what happens within an economy sets off a chain reaction whether its big or small. One negative reaction could lead to a whole line of negative reactions which impacts consumers, businesses, and the government and vice versa for the positive impacts. Economic Activities Gross domestic product (GDP) measures the complete market worth for products and services sold and bought by organizations and consumers within an economy in a years’ time. Nominal GDP is a form of real GDP but the difference is that nominal GDP creates room for inflation with in the economy. Interest rate is the percentage of added to an amount that has to be paid back but there are two kinds of interest rates which are nominal and real. Nominal interest rates are those that are inflated and cause your principle balance to be more than what it originally is. Real interest rate is the actual amount of what you would be repaying due to the inflation (Colander, 2010). Economic changes are measured in real GDP which reflects the market value of the products that are sold within the economy for......

Words: 888 - Pages: 4

Premium Essay

Eco/372 Final Exam

...ECO/372 Final Exam Study Guide Created by ACCNerd.com How to Use this Study Guide – READ ME FIRST The following study guide will NOT have the same exact questions on your test! However, this study guide WILL help you ace the ECO/372 Final Exam. The guide covers the same topics and will help you gain a deeper understanding of the concepts. Best of all, you are still guaranteed a score of 90% or higher or your money back! Tip #1: Use CRTL+F to search a related keyword to quickly find the topic you need. Tip #2: If a topic is missing, please email us at support@accnerd.com. We can usually provide immediate custom support during normal business hours. 1. What is the name of the market where businesses sell products to households and government institutions? Goods market Explanation: The goods market is term that refers to the primary market where businesses interact with end users of products. 2. How would you describe Real Gross Domestic Product (GDP)? The market value of all final goods and services produced in an economy or country Explanation: Real GDP will be stated in the currency used during that year. It only includes final goods and services. 3. Who is included in underemployment figures? People who are working part time or not actively working a fulltime job Explanation: Underemployment figures show us the number of people whose skills are not being fully utilized. 4. The Bureau of Economic Analysis in the United States......

Words: 1391 - Pages: 6

Premium Essay

Eco/372

...Fiscal Policy Paper Titania Wilson and Marshall Turner ECO/ 372 January 23, 2014 Virgil Mesah-Dartey Fiscal Policy Paper The U.S.’s deficit, surplus and debt have an effect on tax payers because the government has the power to raise and lower taxes. When taxes are raised you will find that the people will become more affect by that decision. The people are affected when taxes on groceries, cigarette, alcohol beverages, and on loans, when these things are being raised people tend to spend less money on purchasing those items. When the people are careful about what they are spending the businesses will become affected by that as well. The way that it affects the future Social Security and Medicare user is that they are making it harder for our children and their children to be able to receive these benefits, there will be nothing left for them to get. It is already affecting the people now who are between the ages of sixty to sixty five; it is not easy for them now. Right now the deficit surplus is making it hard for the people who are not working and who are receiving unemployment check cannot get an extension on their benefits causing the long term unemployed to struggle even more. Federal benefits kick in after state benefits run out, and range between 14 to 47 weeks, depending on the state where a person lives. According to government figures, the average weekly benefit check is $300. The deficit surplus has an effect on the students of University...

Words: 754 - Pages: 4

Premium Essay

Eco 372 Fundamentals of Macroeconomics

...Fundamentals of Macroeconomics Kevin Conrad ECO 372 Paul Updike May 5, 2014 Part 1 • Gross domestic product (GDP) – The total market value of all the products and services a country provides or consumes over the course of one year. • Real GDP - The total market value of all the products and services a country provides or consumes over the course of one year based on prices of a given year. • Nominal GDP - The total market value of all the products and services a country provides or consumes calculated with existing prices. • Unemployment rate – This is the number of people in a country or economy who are able to work but have been laid off from their jobs. Many of these people are more than willing to work but sometimes have a hard time finding a job. • Inflation rate – The rate at which the prices of services and products continuously rise, inflation causes the prices for products to rise. It makes everything more expensive than a month ago or days ago even depending on how fast the inflation rate is moving over the course of time. • Interest rate – The fee paid when borrowing money from a financial institution for buying a car, house, etc. The financial institution charges this rate so that they make a profit on   the money that you are borrowing from them. This rate can be higher or lower depending on your credit score. People with excellent or good credit will get a lower interest rate than people with bad credit scores. Part 2 The U.S. economy is......

Words: 802 - Pages: 4

Premium Essay

Eco 372

...Fundamentals of Macroeconomics ECO 372 August 7, 2014 Fundamentals of Macroeconomics Macroeconomics is the study of the economy as a whole. What happens in the economy as a whole is based on individual decisions that are made during economic activities (Colander, 2010). Economic activities can be defined as actions that involve the production, distribution and consumption of goods and services at all levels within a society ("Business Dictionary", 2014). Purchasing of groceries, a massive layoff of employees, and decreases in taxes are just a few economic activities that will be discussed along with the affects those particular activities have on government, households, and businesses. The flow of resources from one entity to another for each activity will be discussed as well. Let us begin with grocery shopping. Shopping for groceries is something that is done by each and every household. We all must eat to survive. The amount a household purchases depends on the prices of the products and how much money they have set aside for their grocery budget. Product prices are driven by the state of the economy. Consumers will shop around to find the “best deal” to stretch their budget as far as they can, especially if the economy is in a weakened state. Grocers will compete with other stores to try and keep the consumers coming back to their establishments. The more the consumers purchase the more successful the businesses will be. In many cases, lower income......

Words: 1052 - Pages: 5

Premium Essay

Week 3 - Eco 372

...Week 3 Learning Team Assignment ECO/372 April 10, 2014 Week 3 Learning Team Assignment Unemployment means that people have no jobs, which in turn means they have less money and that ultimately limits the demand for goods and services. Because of unemployment this can shift aggregate demand to the left. Unemployment can also affect the supply of labor which could leave a negative mark on the economy. Unemployed people often become discouraged during unemployment and will give up looking for jobs thus shifting the aggregate supply to the left. Employers could even use the threat of unemployment to cut an employees’ wages which would make people work hard for less money. Keynesian macroeconomics is often described as “demand-side” theory to distinguish it from classical or “supply-side” theories (“Demand, Supply, and Unemployment”), 2014. In the Keynesian theory it is believed that what certain businesses produce they expect to sell. For example, in a restaurant, if its customers purchase less meals then the restaurant will decrease its production. The level of the restaurant’s production will be determined by its demand. If the restaurant did not have the equipment or necessary personnel to produce meals for its customers then the number of meals produced would be limited by the quantity that the restaurant is able to supply. Classical macroeconomics is just the opposite and the theory supports that low production and insufficient spending will not......

Words: 1070 - Pages: 5

Free Essay

Eco 372 Week 2 Fundamentals of Macroeconomics

...Fundamentals of Macroeconomics Name ECO/372 Date Teacher Fundamentals of Macroeconomics The economy is nothing if not extraordinarily complicated. It is intertwined with everything and almost seems as if Newton’s third law applies to it as well. Even the smallest of matters can have a large implication across the economy. The butterfly effect also comes to mind. This paper will evaluate a few of the common activities that can happen within a society, and how those common activities can affect the home, business industry, and government. Purchasing of groceries Grocery prices are on the rise. Not long ago diesel fuel was $4.00 a gallon. This is the method in which all groceries are harvested and/ or transported. An increase in the cost of fuel caused an inflation in grocery prices to reflect a “fuel surcharge” grocers were incurring from transportation companies. Farmers are on the decline as well (Parker2011). Farmers are getting older and selling the farm land instead of passing it on to their sons. If the demand is the same or growing and the supply lessens, the price will rise. When a person purchases groceries, the effects to businesses and households may be fairly obvious. The money that person spends on those groceries decrease their cash flow and increase their inventory of the home. This trade of cash for goods benefits many businesses. The goods purchased will benefit the grocer who is making a profit on the mark up of the goods. The manufacturer of the...

Words: 990 - Pages: 4

Premium Essay

Fundamentals of Macroeconomics Eco/372

...Fundamentals of Macroeconomics Martin Castro Principles of Macroeconomics ECO/ 372 01-28-2015 Antonio Billett The Fundamentals of Economic Activities The purchase of groceries is the product that have the most effectiveness economic quantity in order for establishing a total amount of a market value and all its goods and services that are inputted on a yearly time frame. These are all the products and services boundaries that involve government and public conservation. The GDP evaluates the average sustainability of living. All reported transactions that are not included on account of the government would pressurize the GDP and give low precise to the community. There are numerous of ways as well as activities that could have an effect on businesses, households, and the government. The primary event that would come to mind would be grocery shopping. There are many brands that have the same ingredients and pricing that have a wide range. That is the primary significance in a consumer's view; we make every effort to get the most of our money. We work hard to earn our funding, why just give it away like nothing? Look at the pricing quality or the weight; these details play a big part when pricing is in place. Organizations strive on having aggressive pricing when good and services increase. That puts them on having fewer economic opportunities for employment, in which decreases staff and increase unemployment. When the cost increases, consumers buy less, which is less......

Words: 721 - Pages: 3

Premium Essay

Eco 372

...Fiscal Policy Laura Wall, Melinda King, ECO/372 April 27, 2015 Sam Pirnazar Fiscal Policy There are many different policies that the government must oversee. One of those types policies is referred to as fiscal policy. Fiscal policy is a set of conscious decisions to make intentional alterations to taxes and government spending (Colander,2013). The purpose of these tactics is to either stimulate or slow down the government (Colander,2013). These policies directly impact tax payers and future social security and Medicare users because they create a deficit, surplus, and debt. The purpose of this paper is to discuss how this deficit, surplus, and national debt affect all have impacts on these citizens. To understand how a deficit, surplus, and national debt affect the economy, it is important to understand what each term means. First there is a deficit which is a lack of funding to cover a cost. A surplus is just the opposite of a deficit. An extra fund left over after the cost of something is paid for in full is called a surplus. Any long term running deficits, in actual currency terms, is considered debt. The United States (U.S.) has accumulated a large amount of debt, increasing its deficit more every year. Surprisingly, national debt has plagued us since George Washington’s presidency, a whopping $75,463,476.52 in 1791 (Steinbring, J., 2011). The U.S. deficit leaves very little in terms of money flow for the government. When deficits......

Words: 417 - Pages: 2

Premium Essay

Supply Chain Eco/372

...Supply Chain and Demand Model By Sharon Carr, Tameka hamlet, Asabi Pierre-Louis, Shanda Smith, Tyrell Fulwood ECO/372 Instructor: Timothy Dunning University of Phoenix May 20, 2015 The Supply and Demand basics: Even though an entire deliberation of supply and demand curves are contemplating measures of qualifications and complexities, the straightforward notions behind these curves are essential. The surveillance from the demand curve, the lower prices of a product means, the more of it people demand. The exceptions to these behaviors may be occasional (and the economists exceedingly have supplemented the theoretical feasibility of these deviations), but there is not many and the transient negative relationship between quantity and price demand, is how economists refer to it as the law of demand. The curves of demand will never change from a downward sloping, the quantity demand and with the price on the vertical axis (period) in the horizontal axis. Supply curve notions, if the product prices are higher, the producers will have to supply more. The supply curves sloping is upward. To justify the sloping going upward in relations between quantity and price supplied is the amount of manufacturing extra units of commodity increases as more is constructed. A higher price is what motivates added output. But this may not be the case every time. There is time for existing companies to expand the size of their plant, or new organizations entering......

Words: 766 - Pages: 4

Premium Essay

Eco 372 Week 2 Product Purchases & the Economy

...Product Purchases and the Economy ECO/372 October 12, 2015 Product Purchases and the Economy A new car purchase is one that takes a large amount of consideration and budgeting. The most important economic indicators to consider when investing in an automobile purchase are unemployment rates and interest rates. These indicators will assist a person when deciding whether to purchase new or used. Is the right time now or later to purchase a truck? Economic Indicators The automotive sector is a cyclical business. Since it is a cyclical business, changes in the revenues and earnings of automotive companies are more likely due to the state of the economy and the strength of the consumer. Sales in the automotive sector are higher when economic activity is strong and people feel confident about their future economic prospects. In this environment, more people are likely to make an automobile purchase. Clearly, unemployment is a major factor in this environment. People do not feel optimistic about a major purchase when they are unemployed. People without jobs are less likely to have the means to afford a car. Someone with a job is not likely to make a major purchase if he is worried about losing his job. In 2009, the unemployment rate was between 8% and 10%, and auto sales were 9 million on an annualized basis. In March 2015, the unemployment rate was 5.5% and auto sales were 16 million. Interest rates affect the financing costs of......

Words: 1064 - Pages: 5

Premium Essay

Eco 372 Students Guide / Tutorialrank.Com

...ECO 372 Entire Course (UOP Course) For more course tutorials visit www.tutorialrank.com ECO 372 Week 1 Discussion Question 1 ECO 372 Week 1 Discussion Question 2 ECO 372 week 1 Individual Assignment Term Definition Paper ECO 372 Week 2 Discussion Question 1 ECO 372 Week 2 Group Discussion Question ECO 372 week 2 Team Assignment Industry Overview Paper ECO 372 Week 3 Discussion Question 1 ECO 372 Week 3 Group Discussion Question ECO 372 week 3 Individual Assignment Fiscal Policy Alternatives Simulation ECO 372 week 3 Team Assignment Economic Indicators Paper ECO 372 Week 4 Discussion Question 1 ECO 372 Week 4 Group Discussion Question ECO 372 week 4 Team Assignment Economic Indicator Forecast Paper ECO 372 week 5 Individual Assignment Applying International Trade Concepts Simulation ECO 372 week 5 Team Assignment Economic Project Paper ECO 372 Final Exam Guide ------------------------------------------------------------------------------------------ ECO 372 Final Exam Guide (UOP Course) For more course tutorials visit www.tutorialrank.com 1) The largest source of household income in the U.S. is obtained from 2) The market where business sell goods and services to households and the government is called the 3) Real gross domestic product is best defined as 4) Underemployment includes people A. who work "off-the-books" to avoid tax liabilities B. who are working part time, or not using all......

Words: 1212 - Pages: 5

Premium Essay

International Trade and Finance Speech Eco 372

...International Trade and Finance Speech ECO 372 April 24, 2012 Kevin McKinley Executive Summary The purpose of this paper is to prepare a speech that will be provided to a number of reporters that are not well versed with economics. In this paper I will put emphasis on international trade and foreign exchange rates and how those affect the GDP, domestic markets, and students. I will also outline some of the benefits on goods and services that are imported from other countries and how those contribute to our economy in the United States. International Trade to GDP In order to understand international trade it is important to recognize what the effects of international trade have on the GDP, domestic markets and university students. International trade is essentially when two or more countries exchange goods and services. Many countries export their goods and services to other countries and in turn may also import goods and services from other countries into their own. There have been exceptional achievements with technology, which have made it much easier to trade on an international level. The communication, as a result of these technology advancements, has improved exponentially and it has truly simplified this process. With that being said it can be confirmed that international trade has a profound effect on the GDP, domestic markets and even university students like me. There are many countries that are rich in technology, like China and Japan, and......

Words: 851 - Pages: 4