Explain The Fundamental Of Macroeconomics

Fundamental of Macroeconomics
ECO/372

There are many words out there that people do not think about all the time but these terms are mainly used in the business world. These words are Gross Domestic Product, Real GDP, Nominal GDP, Unemployment rate, Inflation rate, and Interest Rate. Gross Domestic Product is defined as the market value of all the final goods and services produced within a country during a given period. Real GDP is considered to be a nation's total output of goods and services in a given time period and has been adjusted for price changes. Nominal GDP is an evaluated GDP at the current market prices. All of the different terms that go along with GDP all explain different values what a country sells when it comes to their goods and services. Unemployment rate is the percentage in a city, town or state even as big as the
country that shows the percentage of how many people do not have work.
When people become unemployed it is reported to the government and they have to keep up with the percentage rate of how many people are unemployed and this has to be kept up with because it cannot get to high otherwise there could be more problems within the government. Most of the time the unemployment rate will fluctuate depending on what is going on in the economy and it will never stay the same. Inflation rate is the rate of how much goods will increase in price depending on the simple case of supply and demand. If something is in very high demand then the cost might go up or down really depending on how much supply is out there for that product. Interest rate is the rate of interest and the best example for that would be Credit cards and loans. When you get a credit card you have a specific interest rate, so when you have a 500 dollar limit with a
10% interest rate you will pay 10% of that 500 on each month that goes by. When it comes to purchasing of groceries this is an activity that affects mainly the households but at the same time it can affect businesses and government as well, because of the fact that the government and businesses get to see the different supply and demand so that they know what people are buying and what they need. Households are affected because they have to make sure that the things that they need they can get and can afford to get as well. Massive layoff of employees is something that affects everyone. To start with households becomes effected because of the fact that they are used to a stable income and now they do not have an income at all so therefore they have to try to make sure they can adjust and pay the bills and supply their family with the different things that they need. When people lose money businesses eventually start to lose money because people cannot afford to go out and do the things that they could when they had jobs so therefore it hurts everyone. When there is a decrease in taxes the government actually gets less tax money to use for certain things but in households it makes things a little better. Different households will notice that they are actually spending less money which will lead to more money in the household. I do not really see how any businesses are really affected by this. There are many things out there that affect different types of people and different types of businesses and regardless of what is going on things can change on the drop of a time. When something major happens people have to be able to adjust their lifestyle and continue to live with whatever is going on. If people have trouble dealing with the different changes that happen it can cause problems in the households and no one wants to have to deal with these things, this is why it is best for everyone to be ready to handle and deal with everything that can happen and realize that it is a reality.