Eco 372 Week 2 Research Paper

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One Fundamentals of Macroeconomics Christina Guilin February 25th, 2013 ECO 372 Thomas Byers Two Part One Gross Domestic Product, or GDP, can be described as the monetary value of all finished goods and services produced within a country. This value is usually calculated on an annual basis. It includes all private and public consumption, government outlays, investments, and exports and imports that have occurred in said territory. GDP is used to state the current economic health of given country, as well as used to estimate a country’s standard of living. Real GDP is adjusted according to the measure of inflation and reflects the value of goods and services produced in a given year. The Real GDP provides a more accurate amount given changes in price level, and accounts for these changes. Nominal GDP is described as the Gross Domestic Product which as not been adjusted according to current…show more content…
The government determines the tax rate that will be applied to the purchase of groceries, and this differs from state to state. In states like California for example, the taxes on groceries are much higher than say for example, in Wisconsin. Some states do not even have sales tax on certain items. In times of inflation, the prices of groceries are higher, and this greatly affects households. Some households are more affected than others, depending on how many people are living in a house, and the combined income of the ones supporting the household. Some households may need to seek government assistance to make ends meet and put food on the table for their families. Businesses are affected as well because businesses must stay competitive to remain successful. For some consumers it is probable that they will travel outside their town to other businesses with lower and sale prices, which means that businesses must compete to keep their loyal patrons and

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