This website uses cookies to ensure you have the best experience. Learn more

Macroeconomics Essay

1598 words - 6 pages

Six key variablesYou can get a very good idea of the pulse of economic activity by looking at only six key economic variables: six variables that together give a very large chunk of the significant information about the macroeconomy. These six variables are:Real Gross Domestic ProductThe unemployment rateThe inflation rateThe interest rateThe level of the stock marketThe exchange rate.Real GDPThe first key quantity is the level of real Gross Domestic Product, called "real GDP" for short, and often referred to as just "GDP."Let's unpack the definition of real GDP word-by-word.Real GDP divided by the number of workers in the economy is our best readily-available index of the status of the economy: how well the economy is doing as a social mechanism for producing goods and services that people find useful: the necessities, conveniences, and luxuries of life.U.S. Real GDP per WorkerMeasured at 1995 prices, all economic forecasts are that U.S. real GDP per worker--the total value of all final goods and services produced in the United States, divided by the number of workers in the labor force--will kiss $60,000 in the year 2000. This marks more than a quadrupling of real material standards of living since 1900, when real GDP per worker at 1995 prices was some $13,000 according to standard estimates.Other features of macroeconomic history are visible on the graph below--the Great Depression of the 1930s, the World War II boom, the period of stagnation following the 1973 OPEC oil price increase punctuated by the 1974-75 and the 1980-82 recessions--but there is no doubt that the principal event of the twentieth century was the more-than-quadrupling of real GDP per worker.Source: Angus Maddison (1995), Monitoring the World Economy (Paris: OECD), as extended.The Unemployment RateThe second key quantity is the unemployment rate.The unemployed are all people looking actively looking for jobs who have not yet found one (or not yet found one that they find attractive enough to take rather than continue to look for a better).The number of unemployed divided by the total labor force--the unemployed plus those people at work--is the unemployment rate.In the United States every month the Labor Department's Bureau of Labor Statistics conducts the Current Population Survey: a random survey of America's households. The estimated of unemployed from the survey is then divided by the estimated labor force from the survey, and the result is that month's unemployment rate. Last month's unemployment rate is usually the biggest single piece of economic news when it is released, on the first Friday of every month.An economy with no unemployment would not be a good economy. Just as an economy needs inventories of goods--goods in transit, goods in processes, goods in warehouses and sitting on store shelves--in order to function smoothly, so an economy needs "inventories" of jobs-looking-for-workers ("vacancies") and of workers-looking-for-jobs ("the unemployed"). An economy in...

Find Another Essay On Macroeconomics

Macroeconomics forecasting Essay

1294 words - 5 pages Macroeconomics ForecastTable of ContentsI. INTRODUCTION / PURPOSE: 3II FORECASTING INSTITUTIONS 4III COMPARE MACROECONOMIC FORECASTS 5IV ORGANIZATION RECOMMENDATIONS / CONCLUSION 8V REFERENCES 9I. Introduction / Purpose:Macroeconomic forecasts are traditionally stated as point estimates for one or several periods ahead. They are used extensively in industry and government.The purpose of this paper is to compare and contrast macroeconomic

Macroeconomics Essay

771 words - 4 pages The goal of the monetary policy of the Federal Reserve in the United States is to try to achieve close to full employment and achieve high rates of economic growth. They can do this by manipulating the supply of money in the economy and altering interest rates on overnight loans. The Federal Reserve is an important aspect to our economy as they are in charge of our overlooking our economy. This was set in place by the Federal Reserve Act of

macroeconomics

1546 words - 6 pages (iii) Rate of USA inflationInflation can be define as an increase in the price of goods and services which is representative of the economy as a whole. Inflation frequently related with increasing in price of goods and services by the particular time period. Graph 3 shows the rate of USA inflation.Graph 3According to the annual rate of US, it began on 2003 was at 1.9% increase in 3.3% on 2004 and rose again 3.4% on 2005 and bottoming about 2.5

The Current Macroeconomics Situation

2383 words - 10 pages THE CURRENT MACROECONOMICS SITUATION It seems that it is apparent that the current macroeconomics situation in US is bit difficult in numerous ways.   The situation relating to employment, inflation, monetary and fiscal policies has been detrimental to US citizens who have undergone through an trembling economy for a lot of years.   When there is enlargement in monetary activity, then the affluence will be experienced by a larger number of

Macroeconomics Of Slavery

1693 words - 7 pages Macroeconomics of Slavery Sales of Slaves Slaves were freely bought and sold across the antebellum South. Southern law offered greater protection to slave buyers than to buyers of other goods, in part because slaves were complex commodities with characteristics not easily ascertained by inspection. Slave sellers were responsible for their representations, required to disclose known defects, and often liable for unknown defects, as well as

Expectations Within Macroeconomics

1744 words - 7 pages because in negotiating wage contracts, for example, agents need to have some view about future changes in the value of money in order to assess the real value of any settlement. Over the last 20 years a new more extreme version of monetarism has gained a considerable following. This is the new classical school. Leading exponents of new classical macroeconomics include Robert Lucas and Thomas Sargent in the USA and Patrick Minford in the UK. This school of economists believe that markets clear virtually instantaneously and that expectations are formed rationally.

Macroeconomics Impact on Business Operations

2313 words - 9 pages Macroeconomics Impact on Business OperationsMacroeconomics surveys trends in the national economy as a whole considering the study of the sum of individual economic factors. In addition, economic systems are subjective to several macroeconomic factors. A nation will strive for sustainable economic growth to improve the standard of living for its citizens. Even though, fiscal and monetary policy is used to influence the economy; a well define

Macroeconomics and Mid term exams

1131 words - 5 pages Macroeconomics Midterm Exam 1Name:1) Famous influential economist of the last century?() John Adams () Cornwall Stowe(X) John Maynard Keynes () John Dempsey Cortwright2) The condition in which our wants are greater than our needs?() Surplus () Equilibrium() Annex (X) Scarcity3) An economist's word for satisfaction one receives from a good or service?(X) Utility () Optimum() Cohesion () Pleasure4) Economics is often times referred to as the study

Analysis of Macroeconomics in Korea

2215 words - 9 pages countries as well as keeping the value of Asian.References:1. David Begg (2003). "Economics" .London, Mc-Graw Hill companies2. David Blake (2002). "A short course of economics", London, McGraw-Hill companies3. Lipsey and Chrystal (2003). "Economics (10th edition)", Oxford, Oxford University Press4."An Encyclopedia of Macroeconomics", Brian Snowdon and Howard R. Vane.

Macroeconomics ECO/360

774 words - 3 pages MacroeconomicsMacroeconomics is the study of the economy as a whole, which includes inflation, unemployment, business cycles, and growth (Colander, 14). In today's society, Americans rely on having the option to have multiple service providers for their home or office. Several businesses especially those who work nationally or internationally with other businesses, try to find the inexpensive and new innovative ways to reduce cost. I currently

Macroeconomics Questions and Answers

1049 words - 5 pages Question 1: (Word limit 500). The inflation target of the Reserve Bank of Australia (RBA) is 1~3%. Suppose now the inflation is going up quickly and will be higher than this target soon. Moreover, the strong Australian dollar has started to hurt the Australian export. Please use what you have learnt from this unit to discuss whether it’s possible for the RBA to keep the inflation within the target and also to depreciate the Australian dollar

Similar Essays

Macroeconomics Essay

1076 words - 4 pages countries. The article states that the job cuts will reduce Alcoa's regional work force by approximately 6 per cent.The topics of supply and demand are very important in the economic aspect of business. Supply is a schedule of quantities of goods that will be offered to the market at various prices (Colander, Macroeconomics Glossary, pg9). The supply and demand for this industry is enormous. There is a great supply of aluminum, which can be provided by

Macroeconomics Essay

1743 words - 7 pages You may have already studied microeconomics, which looks at supply, demand and prices for individual goods. Macroeconomics looks at the bigger picture and involves the study of the economy as a whole. National income Let us start by looking at a simple example - a 'two sector' economy made up of households (consumers) and firms (producers) -and use this to develop the idea of national income. To start with we will ignore the impact of

Macroeconomics Essay 3271 Words

3271 words - 14 pages Introduction Macroeconomics is worried about the economy as a whole, such as output and growth that measures the total income of the economy in goods and services and inflation which the percentage increases yearly in the price of goods and services. Employment is also included which is all about the changes in the labour market. The objective of the UK’s government is to achieve stability of growth and employment. This is for the UK to build

Fund. Macroeconomics Essay

728 words - 3 pages Fundamentals of Macroeconomics FUNDAMENTALS OF MACROECONOMICS 1 FUNDAMENTALS OF MACROECONOMICS 6 Fundamentals of MacroeconomicsA description of the following terms:Gross Domestic Product (GDP)Real GDPNominal GDPUnemployment rateInflationInterest rateGross domestic product is the market worth of goods and services produced in a one year time. This is controlled by the Bureau of Economic Analysis.Real GDP is the market worth of goods and