Essay: Macro economy and its important variables

Essay: Macro economy and its important variables
12/04/2011 Comments Off on Essay: Macro economy and its important variables Academic Papers on Business Studies,Sample Academic Papers admin

Sample Essay

Macroeconomics is the study of the aggregate economic performance of an economy; whereas micro economy focuses on the individuals and studies their economic decisions (Investopedia). It is clear that macro economy has a number of variables and hence it is more complex as compared to the microeconomics. The most important indicators of macro economy are the Gross Domestic Product (GDP), unemployment and inflation (Investopedia).

GDP is the accumulated market worth of finished goods and services produced within the boundaries of a country during a particular period of time, usually one year. Nominal GDP (inflation not adjusted) should not be confused with real GDP (inflation adjusted) as the increase in nominal GDP (merely increase in prices) doesn’t mean that country has made more money during a certain period (Investopedia). Unemployment is equal to the number of people who could not get jobs among the total labor force available at a particular time. The inflation means the rate of increase in the prices of goods which is measured by the Consumer Price Index (CPI) and GDP deflator (a ratio of nominal and real GDP) (Investopedia). Some other important variables of macro economy are the interest rates, economic growth, budget deficit and poverty.

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