Fundamentals of Economics
Fundamentals of Macroeconomics
Brandy Dunlap
Eco/372
January 14, 2013
Dr. Lyn Bush
Fundamentals of Macroeconomics
Part 1: Describe the following terms in your word.
Gross domestic product (GDP): The total market value of all products or all the final goods and services produced by all the people and all the companies in an economy for the period of year is known as GDP or Gross
Domestic Product.
Real GDP: Real GDP can be defined as the value of total goods and services produced by a particular country expressed in the prices of some base year. It is also known as real growth domestic product. Nominal GDP is the GDP which is calculated at existing prices.
· Unemployment rate is the rate which measures that how many people are there without jobs in a country.
· Inflation rate is the rate which measures the price of the product and services offered to people. Actually inflation rate shows the average price of the goods such as food, medical care, and transport…that is used by the consumers. · Interest rate is defined as the money that banking institutions or some businesses usually pay or charge for the use of their money, it is expressed in terms of percentage. In the case of banks, this is usually charge for the use of the money lent in the form of loans and credit cards, and it is paid to costumers when the bank uses the money to make those loans.
· Part 2: Consider the following examples of economic activities:
1. Purchasing of groceries
2. Massive layoff of employees
3. Decrease in taxes
Describe how each of these activities affects government, households, and businesses. Describe the flow of resources from one entity to another for each activity.
There are three sectors in U.S economy:
1) Household.
2) Business.
3) Government.
All of these three sectors are very important in a sense as they are interrelated with each other as well as connect U.S economy worldwide. This networking makes it feasible to direct the flow of
Brandy Dunlap
Eco/372
January 14, 2013
Dr. Lyn Bush
Fundamentals of Macroeconomics
Part 1: Describe the following terms in your word.
Gross domestic product (GDP): The total market value of all products or all the final goods and services produced by all the people and all the companies in an economy for the period of year is known as GDP or Gross
Domestic Product.
Real GDP: Real GDP can be defined as the value of total goods and services produced by a particular country expressed in the prices of some base year. It is also known as real growth domestic product. Nominal GDP is the GDP which is calculated at existing prices.
· Unemployment rate is the rate which measures that how many people are there without jobs in a country.
· Inflation rate is the rate which measures the price of the product and services offered to people. Actually inflation rate shows the average price of the goods such as food, medical care, and transport…that is used by the consumers. · Interest rate is defined as the money that banking institutions or some businesses usually pay or charge for the use of their money, it is expressed in terms of percentage. In the case of banks, this is usually charge for the use of the money lent in the form of loans and credit cards, and it is paid to costumers when the bank uses the money to make those loans.
· Part 2: Consider the following examples of economic activities:
1. Purchasing of groceries
2. Massive layoff of employees
3. Decrease in taxes
Describe how each of these activities affects government, households, and businesses. Describe the flow of resources from one entity to another for each activity.
There are three sectors in U.S economy:
1) Household.
2) Business.
3) Government.
All of these three sectors are very important in a sense as they are interrelated with each other as well as connect U.S economy worldwide. This networking makes it feasible to direct the flow of
References: badice.com/2009/02/25/the-economys-impact-on-grocery-shopping/