Economic Definitions
• Gross Domestic Product (GDP) is the total value of a countries products and services produced over a year.
• Real GDP is GDP adjusted for price changes.
• Nominal GDP is GDP adjusted for inflation.
• Unemployment Rate is the percentage of the work force that is currently not working.
• Inflation Rate is the rate at which goods and services rise in cost over a period of time.
• Interest Rate is the rate at which interest is paid by a borrower over a period of time.
Economic Activities
The economy is like an intricate machine with many moving parts that affect the output of the machine. If any of these parts are damaged, they affect the overall performance of the machine. In order to understand how the economy works, numerous terminologies have been created to describe certain aspects of the economy, such as gross domestic product (GDP), real GDP, nominal GDP, unemployment rate, inflation rate and interest rate. Three major driving forces that drive this machine are the government, households and businesses. When economic activities occur, such as buying groceries, layoffs or decreases in taxes these events can have effects on all three entities. We are going to look at the economic terms mentioned above and see how purchasing groceries, layoffs and taxes can have an effect on all three major contributors of the economy.
There are economic terms used to describe aspects of the economy. These terms are gross domestic product (GDP), real GDP, nominal GDP, unemployment rate, inflation rate and interest rate. The gross domestic product is the total value of a countries products and services produced over a year (Colander, 2010). Real GDP is the same as GDP but it is adjusted for price changes and no...
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... to use its powers to prevent this from happening. In the scenario presented, a chemical was found in the fertilizer that was responsible for causing cancer so a new fertilizer was used. Lettuce became in demand once again, the government lowered taxes, and the economy rebalanced and once again thrived.
We may not think about how important everyday products are but they create jobs, and promote industries. The government is there as referees to make sure those products are produced safely and fairly. The economy is a delicate machine, if one part breaks; it could cause a ripple effect that could crash the entire economy.
Works Cited
Colander, D. C. (2010). Macroeconomics. Retrieved from
https://ecampus.phoenix.edu/content/eBookLibrary2/content/DownloadList.aspx?assetMetaId=95e16f89-76ec-4d53-a7da-699aabdb7cfa&assetDataId=84a83693-c978-4618-8727-3b6fb4d93aaa
Gross domestic product (GDP) is one of the best ways to measure how a country’s economy is doing. A main component in figuring the GDP is personal consumption expenditures. Personal consumption expenditures accounts for about two-thirds of domestic
Economic indicators are Governmental statistics, released on a regular basis, which indicate the growth and health of a country. Economic indicators often affect and influence the value of a country's currency. The Trade Deficit, the Gross National Product (GNP), Industrial Production, the Unemployment Rate, and Business Inventories are examples of economic indicators. We will be dealing with four specific indicators: interest rate, inflation, unemployment, and employment growth as well as Real Gross Domestic Product (GDP). Real GDP is so called because the affects of inflation and depreciation are accounted for in the figures.
gross domestic product – the total value of services and goods that were produced within the nation’s borders by the people in a course of one year, which excludes the income earned from abroad
Government is important factor for how well the economy does, because government creates laws and policies which should be followed by all, then these polices result to good/ bad of the economy. Such as unemployment, inflations, rate of the economic growth and the balance of payment.
-1.25%, which means that output was falling. When in recession, unemployment increases because household incomes, business profits and GDP decrease, so unemployment is increased because of the global recession. Since household income decreases, their spending decreases, which means firms will earn less profit. Budget cuts will then need to be made so people are made redundant as less workers are needed to produce less. Making people redundant is a big way of cutting costs, so unemployment increases because people lose their jobs. This worsens the recession, as household spending will decrease even more because of people being made redundant, so firms will be receiving less
The economy concept or theory related to the article is the Gross Domestic Product. Gross Domestic Product (GDP) measures the commercial value of the final goods and services that are produced in a country within a given period of time. It calculates all of total of the output such as goods and services that are produced only inside the border of one country. GDP includes only goods and services that are produced for a purpose which is to be sold in the market. However, it does not include items that are produced at home and also is used or consumed at home and never enter any economy market. It also does not included illicit and illegal goods and services such as illegal drugs and items in the market. For example, work
In terms of economy, the two values GDP and PPP are very significant to understand, analyze and evaluate a country’s overall economic activity. GDP is the monetary value of all the finished goods and services produced within a country's borders in a specific time period .PPP, on the other hand is used worldwide to compare the income levels in different countries. PPP thus makes it easy to understand and interpret the data of each country.
There are some positive effects government intervention could produce. These pros are, in fact, few, and questionable, at that. Take for instance, the situation with Microsoft. The government is sticking its nose in where it doesn't belong. Let's try and get passed that point for a moment and examine the good that could come out of government intervention.
Gross Domestic Product (GDP) is the market value of all final goods and services produced by factors of production within a country in a given period of time. It can be calculated using either the income, output, or expenditure method as illustrated on the circular flow of income diagram below.
It is calculated using the formula GDP = C + G + I + NX where: C = consumer spending, G = government spending, I = sum of business spending on capital, NX = total net exports (exports – imports). It is regularly used as an indicator of the economic growth of a country. (Gross Domestic Product, 2014) When a company exports goods that money increases the exporting country’s GDP. When they import products it decreases the country’s GDP. If there are more exports than imports, net exports will be positive. The opposite is true if there are more imports than
GDP is a measure of variables, such as aggregate income, aggregate spending on final goods, aggregate output, and aggregate value added. In other words, total income equals total value of production of goods and services, which equals total expenditures on final goods and services, which also equals total value added.
The Economy is the backbone to society. There are many factors that operate in, and govern our society’s economical structure. Factors such as scarcity and choice, opportunity cost, marginal analysis, microeconomics, macroeconomics, factors of production, production possibilities, law of increasing opportunity cost, economic systems, circular flow model, money, and economic costs and profits all contribute to what is known as the economy. These properties as well as a few others, work together to influence the economy. Microeconomics and Macroeconomics are two major components. Both of these are broken down into several different components that dictate societal norms and views.
The gross domestic product (GDP) is one the primary indicators used to measure the health of a country's economy. It represents the total dollar value of all goods and services produced over a specific time
Many countries in the world have been suffering a recession in their economies and UK has not been an exception. A recession is a macroeconomic term describing one of the two business cycles that economies go through. The business cycles is characterized by either a boom where there are more business activities carried with a rapid economic growth and points of recession where there is retardation min economic growth. Various aspects and factors contribute to economic growth, which is measured through GDP. This factor may include savings, investments government spending plus other factors within either an increase or a decrease. Reduction in spending may lead to a recession while a n increase in spending may lead to expansion that is a boom in the economy.
Inflation is one of the most important economic issues in the world. It can be defined as the price of goods and services rising over monthly or yearly. Inflation leads to a decline in the value of money, it means that we cannot buy something at a price that same as before. This situation will increase our cost of living.