Macroeconomics Essay

1294 WordsMar 31, 20136 Pages
Fundamentals of Macroeconomics Paper Leroy D. Patton ECO/372 Principles of Macroeconomics March 25, 2012 Carl Bowman University of Phoenix Fundamentals of Macroeconomics Paper – Part 1 • Gross Domestic Product (GDP) - Is the economic measurement regarding the state of the economy; market worth of the goods and services produced by a country. • Real GDP - The number reached by valuing all the productive activity within the country at a specific year's prices. • Nominal GDP – Almost identical to gross domestic product (GDP) but includes the phrase measures in current prices. • Unemployment Rate - The percentage of workers that are 16 years and older who is unemployed but looking and eager to work. • Inflation Rate - rate of an annual average; the percentage change in the average price level from one period to the next, usually measured from one year to the next. • Interest Rate - The amount charged for borrowing funds, usually specified as a percent of the amount borrowed. Fundamentals of Macroeconomics Paper – Part 2 Purchasing of groceries Consumers purchase groceries based on their wants and needs. These items usually produce more for use which is valuable to the consumer’s, therefore, the consumers is willing to pay more for those items regardless the cost. The average consumer spending usually depends on the state of the economy. The consumer does not put their focus on a favorite specific item to purchase, the consumers’ loyalty is the way they view the economy. When the economy is in a “bad way, many consumers purchase items that they consider must-have first, then if the household budget allows for the purchase of other items that are seen as want items, then they would buy them. For example, if the consumer loses confidence in the economy from signs of the

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