Macroeconomic Forecast
Macroeconomic Forecast Outline Macroeconomics is, "the part of economics concerned with the economy as a whole; with such major aggregates as the household, business, and government sectors; and with measures of the total economy" (McConnell & Brue, p.13). "Two of the most critical questions in macroeconomics are: (1) What determines the level of GDP, given a nation 's production capacity? (2) What causes real GDP to rise in one period and to fall in another?" (McConnell & Brue, p.72). So how do economists measure the economy as a whole? What are the indicators and variables they measure? Where are the forecasts obtained? And what historical data do they use? The paper will list these indicators and variables, including the importance and types of historical data.
The Economic Indicators
Net domestic product (NDP) is the result of GDP less consumption of fixed capital or depreciation. According to our text, "it measures the total annual output that the entire economy, including households, businesses, government, and foreigners and can consume without impairing its capacity to produce in ensuing years" (McConnell & Brue, p. 120).
Consumer Price Index (CPI), compiled by the Bureau of Labor Statistics (BLS), is the main measure of inflation in the United States. The index is used by the government to report monthly and annual inflation rates as well as to adjust Social Security benefits and income tax brackets. (McConnell & Brue, p. 141)
U.S. national income (NI) includes all income earned through the use of American-owned resources, whether they are located at home or abroad. NI is calculated by subtracting net foreign factor income from NDP and subtracting indirect business taxes from NDP. (McConnell & Brue, p.120)
"Disposable income (DI) is personal income less personal taxes. Personal taxes include personal income taxes, personal property taxes, and inheritance taxes. Disposable income is the amount of income that households have left
The Economic Indicators
Net domestic product (NDP) is the result of GDP less consumption of fixed capital or depreciation. According to our text, "it measures the total annual output that the entire economy, including households, businesses, government, and foreigners and can consume without impairing its capacity to produce in ensuing years" (McConnell & Brue, p. 120).
Consumer Price Index (CPI), compiled by the Bureau of Labor Statistics (BLS), is the main measure of inflation in the United States. The index is used by the government to report monthly and annual inflation rates as well as to adjust Social Security benefits and income tax brackets. (McConnell & Brue, p. 141)
U.S. national income (NI) includes all income earned through the use of American-owned resources, whether they are located at home or abroad. NI is calculated by subtracting net foreign factor income from NDP and subtracting indirect business taxes from NDP. (McConnell & Brue, p.120)
"Disposable income (DI) is personal income less personal taxes. Personal taxes include personal income taxes, personal property taxes, and inheritance taxes. Disposable income is the amount of income that households have left
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