Fundamentals of Macroeconomics
Grace Estrella
Eco/372
March 23, 2015
University of Phoenix
Fundamentals of Macroeconomics
Purchasing groceries, massive layoffs of employees, and decrease in taxes all have something in common and correlate to one another. The most common thing we all do every day is go grocery shopping for our families but we never think about how that simple task can have a chain reaction to massive layoffs decrease in taxes. People go grocery shopping to feed themselves and or families every day. When we hear about the massive layoffs of employee’s we think of how sad and hope things turn around for them and their families. When taxes are decreased we automatically start thinking of how much money we can save but we never look at the bigger picture of how each of these factors affects our households, governments and businesses at one time or another.
Gross Domestic Product
Gross Domestic Product also called Nominal GDP, is the value of a country’s overall
output of goods and services at market prices minus net income and usually within a one year
stretch. Gross domestic product can be assumed in these three ways which are expenditure,
output and income. Expenditure means how much money was spent, output means how many
goods and services were sold and income basis means how much profit was earned. Real GDP is
A little different from Nominal GDP because Real GDP accounts for changes in the price
Level, An inflation-adjusted measure that reflects the value of all goods and services
Produced in a given year thus giving a more accurate figure.
GDP plays major factors in our everyday lives and how we manage our
money. The cost of groceries affects consumer’s everyday from where we will shop to what we will get. The cost of groceries affects the government because this is the way that products are produced and sold here in the United States, which affects GDP, real GDP, and nominal GDP. For...