...Fundamentals of Macroeconomics According to Colander (2013) gross domestic product, or GDP, “is the total market value of all final goods and services produced in an economy in a one-year period” (p.545). A major component of our GDP is groceries. Grocery purchases can have a tremendous effect on the economy and thus our GDP. The purchaser exchanges currency for their chosen items. The government gets a portion of the proceeds in taxes. The government then uses this tax revenue to fund the government. A large portion of the tax revenue funds entitlement programs such as welfare. Additionally tax revenue pays the salaries of government employees. Recipients of funds from entitlement programs as well as wage earning government employees in turn use those dollars on various expenditures that may include buying groceries. On the other side of equation the revenue the store generates from sales pays the salaries of its employees which starts the cycle over again. Additional monies are given to vendors of the products the store purchase for retail sales thus funding those companies, their employees and vendors with most everyone at every turn paying taxes. Prices tend to rise as spending increases. It is in essence a continuous cycle or movement of funds from one person or entity to another. During a recession households may reduce their spending on items such as grocery purchases by limiting their spending to the few items they deem necessary. When people start to...
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...Week 2 Individual Paper University of Phoenix Principles of Macroeconomics ECO/372 Week 2 Individual Paper To understand the economy of a country, a person must understand the Gross Domestic Product. The Gross Domestic Product, or GDP, is an economic indicator that measures the total output of products and services of a country (Amadeo, 2014). The GDP includes all products and services produced by every company in that country (Amadeo, 2014). The Gross Domestic Product is separated into several components. One component used to measure GDP is nominal GDP. Nominal DGP indicates the absolute output of a country and is measured quarterly by the Bureau of Economic Analysis (BEA) and is the raw measurement that estimates price increases of products into the GDP (Amadeo, 2014). The BEA must adjust the estimates monthly when updates are received to remain accurate (Amadeo, 2014). Real GDP compares one country to another and is calculated by removing the effects of inflation on products and measures the increase in prices from a year to year (Amadeo, 2014). Real GDP will be lower than nominal GDP because a price deflator is used (Amadeo, 2014). The price deflator is determined by comparing the current-dollar ratio of a series to the corresponding chained-dollar value, and multiplying it by 100 (U.S. Department of Commerce Bureau of Economic Analysis website, 2009). Additional factors that affect the GDP are the unemployment rate, the inflation rate, and the interest rate...
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... * Nominal GDP- A gross domestic product (GDP) figure that has not been adjusted for inflation. * Unemployment Rate - The percentage of the total labor force that is unemployed but actively seeking employment and willing to work. * Inflation Rate - The rate at which the general level of prices for goods and services is rising, and, consequently, purchasing power is falling. * Interest Rate - The amount charged, expressed as a percentage of principal, by a lender to a borrower for the use of assets. Interest rates are typically noted on an annual basis, known as the annual percentage rate (APR). Running head: Fundamentals of Macroeconomics Paper Fundamentals of Macroeconomics Paper – Part 2 Fundamentals of Macroeconomics Paper – Part 2 Purchasing of groceries affects the households, government and businesses. The households demand for the groceries is determined by the need and the prices at which the groceries are sold at any given time. Purchasing of groceries satisfies the consumer need for consuming the commodity. In addition, the consumer disposable income is reduced therefore the consumer is constrained in consuming other commodities. On the other hand, businesses are also...
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...Economic Activities ECO/372 Principles of Macroeconomics June 24, 2013 Johnny Shull Abstract This paper will review and describe gross domestic product, real gross domestic product, interest rates, inflation and unemployment. This paper will also review the decrease in taxes, massive layoff, and the purchasing of groceries and how they affect households, businesses as well as the government. Everything what happens within an economy sets off a chain reaction whether its big or small. One negative reaction could lead to a whole line of negative reactions which impacts consumers, businesses, and the government and vice versa for the positive impacts. Economic Activities Gross domestic product (GDP) measures the complete market worth for products and services sold and bought by organizations and consumers within an economy in a years’ time. Nominal GDP is a form of real GDP but the difference is that nominal GDP creates room for inflation with in the economy. Interest rate is the percentage of added to an amount that has to be paid back but there are two kinds of interest rates which are nominal and real. Nominal interest rates are those that are inflated and cause your principle balance to be more than what it originally is. Real interest rate is the actual amount of what you would be repaying due to the inflation (Colander, 2010). Economic changes are measured in real GDP which reflects the market value of the products that are sold within the economy for the...
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...Learning Team A Reflection There are many databases to research historical economic data and forecast future economic data. This week’s topics help understand the data we are looking at which once understood can help us improve the economic future within our country. Understanding our strengths and weaknesses will also help us find economic data to improve the economy. The Federal Reserve Economic Data, also known as FRED, is a resource for historical economic data. FRED is an online database with thousands of economic data from different resources. It is maintained by the Research Department at the Federal Reserve Bank of St. Louise. FRED combines data with other tools that help users understand, interact and display the data. This is important because the data can become overwhelming and difficult to comprehend. (“Economic Research-Federal Reserve Bank of St. Louis”. n.d). The Bureau of Economic Analysis (BEA) provides independent budget analysis, conducts objectives impartial to analysis and economic issues to support congressional budget process. The BEA is another possible resource it contains a large amount of valuable information in one place. Using the National, International, Regional, Industry, Integrated Accounts all include national income and product accounts (NIPAs), and the gross domestic product to complete an accurate economic forecast (U.S. Bureau of Economic Analysis 2012). The Gross Domestic Product (GDP) is one resource when forecasting economic data...
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...Fundamentals of Macroeconomics Name ECO/372 Date Teacher Fundamentals of Macroeconomics The economy is nothing if not extraordinarily complicated. It is intertwined with everything and almost seems as if Newton’s third law applies to it as well. Even the smallest of matters can have a large implication across the economy. The butterfly effect also comes to mind. This paper will evaluate a few of the common activities that can happen within a society, and how those common activities can affect the home, business industry, and government. Purchasing of groceries Grocery prices are on the rise. Not long ago diesel fuel was $4.00 a gallon. This is the method in which all groceries are harvested and/ or transported. An increase in the cost of fuel caused an inflation in grocery prices to reflect a “fuel surcharge” grocers were incurring from transportation companies. Farmers are on the decline as well (Parker2011). Farmers are getting older and selling the farm land instead of passing it on to their sons. If the demand is the same or growing and the supply lessens, the price will rise. When a person purchases groceries, the effects to businesses and households may be fairly obvious. The money that person spends on those groceries decrease their cash flow and increase their inventory of the home. This trade of cash for goods benefits many businesses. The goods purchased will benefit the grocer who is making a profit on the mark up of the goods. The manufacturer of the...
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...Product Purchases and the Economy ECO/372 October 12, 2015 Product Purchases and the Economy A new car purchase is one that takes a large amount of consideration and budgeting. The most important economic indicators to consider when investing in an automobile purchase are unemployment rates and interest rates. These indicators will assist a person when deciding whether to purchase new or used. Is the right time now or later to purchase a truck? Economic Indicators The automotive sector is a cyclical business. Since it is a cyclical business, changes in the revenues and earnings of automotive companies are more likely due to the state of the economy and the strength of the consumer. Sales in the automotive sector are higher when economic activity is strong and people feel confident about their future economic prospects. In this environment, more people are likely to make an automobile purchase. Clearly, unemployment is a major factor in this environment. People do not feel optimistic about a major purchase when they are unemployed. People without jobs are less likely to have the means to afford a car. Someone with a job is not likely to make a major purchase if he is worried about losing his job. In 2009, the unemployment rate was between 8% and 10%, and auto sales were 9 million on an annualized basis. In March 2015, the unemployment rate was 5.5% and auto sales were 16 million. Interest rates affect the financing costs of purchasing...
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...ECO 372 Entire Course (UOP Course) For more course tutorials visit www.tutorialrank.com ECO 372 Week 1 Discussion Question 1 ECO 372 Week 1 Discussion Question 2 ECO 372 week 1 Individual Assignment Term Definition Paper ECO 372 Week 2 Discussion Question 1 ECO 372 Week 2 Group Discussion Question ECO 372 week 2 Team Assignment Industry Overview Paper ECO 372 Week 3 Discussion Question 1 ECO 372 Week 3 Group Discussion Question ECO 372 week 3 Individual Assignment Fiscal Policy Alternatives Simulation ECO 372 week 3 Team Assignment Economic Indicators Paper ECO 372 Week 4 Discussion Question 1 ECO 372 Week 4 Group Discussion Question ECO 372 week 4 Team Assignment Economic Indicator Forecast Paper ECO 372 week 5 Individual Assignment Applying International Trade Concepts Simulation ECO 372 week 5 Team Assignment Economic Project Paper ECO 372 Final Exam Guide ------------------------------------------------------------------------------------------ ECO 372 Final Exam Guide (UOP Course) For more course tutorials visit www.tutorialrank.com 1) The largest source of household income in the U.S. is obtained from 2) The market where business sell goods and services to households and the government is called the 3) Real gross domestic product is best defined as 4) Underemployment includes people A. who work "off-the-books" to avoid tax liabilities B. who are working part time, or not using all their...
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...ECO 372 Week 4 Federal Reserve System Presentation WHAT ARE THE FACTORS THAT WOULD INFLUENCE THE FEDERAL RESERVE IN ADJUSTING THE DISCOUNT RATE? Weak Economy. Low Employment Levels. High Prices Fluctuation. Low Economy Production Capacity. High Federal Funds Rates. HOW DOES THE DISCOUNT RATE AFFECT THE DECISIONS OF BANKS IN SETTING THEIR SPECIFIC INTEREST RATES? Lower Discount Rates: 1. Banks borrow more reserves 2. Increase in loan offers. 3. Lower interest rates . Increase Discount Rates: 1. Bank reserve decrease. 2. Fewer loans offers. 3. Higher interest rates. How does monetary policy aim to avoid inflation? Contractionary monetary policy: Selling of U.S. Treasury Securities-Open Market Operations. Increase in the Discount Rate. Increase in Reserve Requirements. Control Money Creation. Increase in Government Spending. Decrease in Taxes. FED CONTROLLING MONEY SUPPLY How does monetary policy control the money supply? •With more money, aggregate expenditures are greater. Low interest rates: Investment expenditures. Government purchases. Net exports Consumption expenditures. HOW DOES MONETARY POLICY CONTROL THE MONEY SUPPLY? With less money, aggregate expenditures are lower. •High interest rates: Investment expenditures decrease . Government spending stops. Net exports Consumption expenditures. Decrease. HOW DOES A STIMULUS PROGRAM (THROUGH THE MONEY MULTIPLIER)...
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...School of Business ------------------------------------------------- Syllabus ECO/372 Version 4 Principles of Macroeconomics Whenever there is any question including about what assignments are due, please remember this syllabus is considered the ruling document. Group Number: GA11BSB08 Course Start Date: 07/17/2012 Course End Date: 08/14/20112 Course Schedule: Workshop 1 – July 17, 2012 Workshop 2 – July 24, 2012 Workshop 3 – July 31, 2012 Workshop 4 – Aug. 7, 2012 Workshop 5 – Aug. 14, 2012 FACILITATOR: Farooq A. Khan COURSE LOCATION, DAY AND TIME: Gardena Learning Center, Tuesday @ 6PM REQUIRED READING: Students are required to read all materials available at the Course Materials site for this course on https://ecampus.phoenix.edu/portal/portal/public/login.aspx | Course Syllabus School of Business ECO/372 Version 4 Principles of Macroeconomics | Copyright © 2012, 2008, 2007, 2006 by University of Phoenix. All rights reserved. Course Description This course provides students with the basic theories, concepts, terminology, and uses of macroeconomics. Students learn practical applications for macroeconomics in their personal and professional lives through assimilation of fundamental concepts and analysis of actual economic events. Policies Faculty and students will be held responsible for understanding and adhering to all policies contained within the following two documents: University policies:...
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...Week 5 – Individual Assignment Fundamentals of Macroeconomics Phillip Alfonso ECO-372 August 5, 2013 Professor: Joshua Long University of Phoenix – Online PART 1 Gross domestic product (GDP) Gross Domestic Product (GDP) is the total amount of goods and services that were produced in an economy and is represented in dollars. In the US, we record what the GDP was for the entire year, however, GDP does not always have to be in the span of one year Real GDP Real GDP is a way calculate the GDP without the inflation included so that it can be easily compared to previous years, and nominal GDP would be with the inflation included. Nominal GDP Nominal GDP is the GDP for any given year that has not been modified to reflect the inflation of the US dollar. Unemployment rate Unemployment rate is the amount of people who do not have a job but are looking for one. Inflation rate This is the speed of which prices increase or decrease over time. Generally it is calculated annually or monthly. Interest rate This is the percentage of a certain amount of money that is charged to a borrower of money. When someone borrows money, they have to pay it back plus the interest. PART 2 Whenever goods or services are purchased or sold, the economy is impacted. Obviously if one person comes into a coffee shop and buys a cup of coffee, the US economy will not change, but what if one million people purchase a cup of coffee every day? Or what if those people who usually purchase coffee...
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...Week Four Reflection Summary ECO/372 November 5, 2012 University of Phoenix Week Four Reflection Summary In week four, Team D—Joe, Beverly, Kevin, and Rachel—learned about deficits, surpluses, and debt in relation to the macroeconomic health of the United States. The group as a was very comfortable with the discussion of the week while learning new information about the health of the economy. The following is a summary of what the team learned in regard to deficits, surpluses, debt, and the health of the economy. Budget Deficits Budget deficits occur when government expenditures exceed the amount of revenue coming into the economy through income and taxes. A deficit is a summary of how the economy measures the state of using and accounting procedures. Since World War II, the United States government has run a large amount of deficits, as opposed to surpluses. A deficit can be good or bad, depending on the specific condition of the economy. When the government runs a budget deficit, the goal is to improve the economy. When the economy is not progressing at a rate the country expects, the government will spend money to help stimulate economic growth. If the government spends money to improve revenue for the long-term, both the government and society benefit by the added debt. A budget deficit can help businesses create more jobs to limit the amount of unemployment and improve consumer income. The debts accumulated may be the result of spending on worthwhile projects like road...
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...Weekly Reflection Economic Forecasting ECO/372 May 20, 2013 Jamey Burnett Economic Forecasting Economic Forecasting is a process, which is used for making predictions about the economy. Economic forecasting is used to predict Gross Domestic Product, inflation, and unemployment ("Us Department Of Commerce Bureau Of Economic Analysis", n,d.). Here is a list of resources that can be used to gather historical economic date as well as forecast data; Bureau of Economic Analysis, Bureau of Labor Statistics, U. S. Department of Labor, U. S. Census Bureau, National Association of Purchasing Managers, Survey Research Center, University of Michigan, Standard & Poor’s, S&P 500, and the Federal Reserve. In the report we will focus on the Bureau of Economic Analysis, quantitative and qualitative forecasting, and Bureau of labor statistics. Bureau of Economic Analysis Bureau of Economic Analysis is the federal agency responsible for measuring the United States economy. BEA is responsible for what is produced, what is earned and how it is spent ("What Is the U.S. Bureau of Economic Analysis?" 2012). BEA provides a variety of economic statistics concerning national, international, and regional economic activity. BEA also provides statistics decisions that are influenced by government officials, businesspeople, households, and individuals. The Bureau of Economic Analysis contains both quantitative and qualitative forecasting factors. The Bureau of Economic Analysis...
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...Fiscal Policy Paper Titania Wilson and Marshall Turner ECO/ 372 January 23, 2014 Virgil Mesah-Dartey Fiscal Policy Paper The U.S.’s deficit, surplus and debt have an effect on tax payers because the government has the power to raise and lower taxes. When taxes are raised you will find that the people will become more affect by that decision. The people are affected when taxes on groceries, cigarette, alcohol beverages, and on loans, when these things are being raised people tend to spend less money on purchasing those items. When the people are careful about what they are spending the businesses will become affected by that as well. The way that it affects the future Social Security and Medicare user is that they are making it harder for our children and their children to be able to receive these benefits, there will be nothing left for them to get. It is already affecting the people now who are between the ages of sixty to sixty five; it is not easy for them now. Right now the deficit surplus is making it hard for the people who are not working and who are receiving unemployment check cannot get an extension on their benefits causing the long term unemployed to struggle even more. Federal benefits kick in after state benefits run out, and range between 14 to 47 weeks, depending on the state where a person lives. According to government figures, the average weekly benefit check is $300. The deficit surplus has an effect on the students of University...
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