Macro-Economic Indicators: Gdp, Cpi, Unemployment, Interest Rates Essay

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Trident University Macro-Economic Indicators: GDP, CPI, Unemployment, Interest Rates TAWANNA J. RICHARD ECO202 MODULE 2 Cases Dr. Canarella GDP 1. Y= C+ I+ E+ G 1750= 1,000+ 200+ 300+ 250 2. If we increase our domestic energy production, and imported less oil from foreign countries the GDP would raise extremely high due to no out sources. Inflation 1. ((111-106)/106)*111 111-106=5 5/106= 0.0471 0.0471*111= 5% 2. ((234-217)/217)*234 17/217= 0.0783 0.0783* 234= 18.32% Unemployment Rate 1. 2,500 unemployed / 30,000 civilian labor force 2500/30000= 12% 2. 500 unemployed / 30,000 civilian labor force 500/30000= 60% Yield Curve 1. The difference in rates among these bonds is caused by Maturity risk premiums 2. The default risk premium is not applied to all bonds the United States which would not pay a default premium would be the U.S. government. However in tumultuous times, even the U.S. Treasury has had to offer higher yields in order to borrow. The default premium is paid by companies with lower grade bonds or by individuals with poor credit. As an illustration, companies with poor financials will tend to compensate investors for the additional risk by issuing bonds with high yields. Individuals with poor credit must pay higher interest rates in order to borrow money from the bank. 3. 2.5% +4.5+5.0 4. No the yield curve will not have an upward slope because there is no gain being made. International Economic Trends It seems that the most up and down falls in the Real Gross Domestic Products and Nominal Gross Domestic Products. Japan, Canada, United States, and the United Kingdom have their fair share of loss and gains but the low falls in 2008 and 2009 they raises in late 2009 and 2010 to again in late 2010 to 2011 only to have a positive outlook in the middle of 2013.

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