...Macroeconomic Terms ECO/372 Version 8 University of Phoenix Material Macroeconomic Terms Define the following terms in your words. Term Definition Definition Source Gross Domestic Product (GDP) Is the total market value of all final goods and services produced in an economy in a oneyear period. Colander, D. (2012). Economics (9th ed.). East Windsor, NJ: McGraw Hill Real GDP Is the total amount of goods and services produced, adjusted for price-level changes. It is the measure of output that would exist if the price level had remained constant. Colander, D. (2012). Economics (9th ed.). East Windsor, NJ: McGraw Hill Nominal GDP The amount of goods and services produced measured at current prices. Colander, D. (2012). Economics (9th ed.). East Windsor, NJ: McGraw Hill Unemployment rate The U.S. unemployment rate is determined by dividing the number of people who are unemployed by the number of people in the labor force—those people in an economy who are willing and able to work—and multiplying by 100. Colander, D. (2012). Economics (9th ed.). East Windsor, NJ: McGraw Hill Inflation rate The percentage increase in the price of goods and services, usually annually http://www.investorwords.com/2456/ inflation_rate.html Fiscal Policy is the means by which a government adjusts its spending levels and tax rates to monitor and influence a nation's economy. It is the sister strategy to monetary policy...
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...------------------------------------------------- University of Phoenix Material Macroeconomic Terms Define the following terms in your words. Term | Definition | Definition Source | Gross Domestic Product (GDP) | GDP is the total market value of all goods and services produced within an economy in a one year period. | | Real GDP | Real GDP is the total amount of goods and services produced, adjusted for price level changes. | | Nominal GDP | When the current prices are used to measure the amount of goods or services. | | Unemployment rate | The unemployment rate is the amount of individuals in a society that are not working. It can be calculated by dividing the unemployed individuals by the amount of people actually in the labor force then multiply by 100. | | Inflation rate | The measurement of how fast money loses its value. Measures the prices of items and services increases over a period of time.Inflation may happen when too much money is printed or important or necessary expenses increase in price. | | Fiscal Policy | Government policies that are related to interest rates, taxes and how much people spend. Affects economic variables such as tax rates, interest rates, and government programs that influence prices. | | Monetary Policy | The actions the Board of Governors of the Federal Reserve System make in order to influence the money supply and interest rates. | | Aggregate Demand (AD) Curve | “A demand curve is the graphic representation...
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...Key term | Definition | Accelerator | A change in the level of investment in new capital goods is induced by a change in the rate of growth of national income or AD. | Actual output | Level or real output produced in the economy in a particular year, not to be confused with the trend level of output. The trend level of output is what the economy is capable of producing when working at full capacity. Actual output differs from the trend level of output when there are output gaps. | Aggregate demand (AD) | The total planned spending on real output produced within the economy. | Aggregate supply (AS) | The level of real national output that producers are prepared to supply at different average price levels. | Availability of credit | Funds available for households and firms to borrow. | Balance of payments (BOP) | A record of all the currency flows into and out of a country in a particular time period. | Balance of trade | The difference between the money value of a country’s imports and its exports. Balance of trade is the largest component of a country’s balance of payments on current account. | Balance of trade in goods | The part of the current account measuring payments for exports and imports of goods. The difference between the total value of exports and the total value of imports of goods is sometimes called the ‘balance of visible trade.’ | Balance of trade in services | Is part of the current account and is the difference between the payments for the exports...
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...MACROECONOMICS: A General Overview Finance is based on economics. Therefore, to properly understand financial markets and their behavior one must first understand economics. Economics at its core is concerned with the production, distribution, trade and consumption of goods and services. To put this in human terms we can say that economics is the science that arises out of the interplay between limited resources and unlimited human wants and needs. There are two basic ways to view economics. There is the broad and distant view, which attempts to view things in aggregate for a society at large. We call this view “Macroeconomics”. Macroeconomics is concerned with the status of the economy as a whole. Thus, it looks at overall employment of a general population or overall income of a nation as opposed to a more focused view of a population segment or specific industry. This view is helpful because it is only by this kind of analysis that we can see the general trends which a society or nation is following. Macroeconomic theory and analysis is employed most often by Governments and institutions, which have a responsibility to make policies and decisions which affect the economy as a whole. Some terms you may have heard of which concern themselves with the macroeconomic view of the economy are Gross National Product, Inflation, Consumer Price Index and Fiscal Policy. The meaning of each of these is listed below. Gross National Product – This is the most common measure...
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...Introduction Stock market is a place for listed companies to raise capital .Companies can use the capital for continuing operating activities and expand business. However, the investors are explained to get a positive return from dividend and capital gain in the stock market. Based on the history, the economic condition will influence stock market. For instances, Malaysia faced deflation during the Asian crisis in years 1997. It caused the KLCI index sharply reduced from 1207.43 to 470.43. It have been shown that the investors need to predict the stock prices based on the macro factors to get an abnormal return from stock market There were a lot of researches to study the relationship between macroeconomics variables and stock returns. It is important to study the interaction of macroeconomics factor and stock return. Based on the study, the public can identify which factors can influence the stock market and use the knowledge to predict movement of stock price. According to Wongbangpo & Sharma (2002), the research can reveal the functions of stock market in identify the change in economic condition and also can predict the future performance of stock market. Besides, the study will be useful for the stock market participators. Clare & Priestley (1998) said that the study of the risk factor relationship of stock market will be useful for corporate manager to undertake cost of capital calculation. Moreover, the fund managers can use the information from the result of study to make...
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...Running Head: MACROECONOMICS TERM PAPER 1 Macroeconomics Term Paper MACROECONOMICS TERM PAPER 2 Abstract Using the required United States economic indicators the federal government uses to guide the economy, I researched and analyzed each indicator by comparing the data from 2010 to that of 2011. Even though a large number of economists are optimistic, my opinion is that while recovery is progressing, the pace at which we are moving is not fast enough to rejuvenate consumer confidence. Based on what I have read and have learned in the classroom over the last few weeks, I am even more concerned for our future than I was before I started to learn the world of economics. The comparisons of the economic indicators paint a very dismal picture to me. MACROECONOMICS TERM PAPER 3 Gross Domestic Product After learning what the Gross Domestic Product (GDP) is, I better understand the data I researched. Based on what I read on the Bureau of Economic Analysis website, Table 1 – Real Gross Domestic Product and Related Measures, the Gross Domestic Product for June of 2010 (Q3) was 2.5 percent compared to the Gross Domestic Product of 2.0 percent, only a year later in June of 2011 (Q3); a deficit of .5 percent between the two years. The...
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...org/publications/economics/papers/2010/wp10-01bk.pdf The views in this paper are solely the responsibility of the authors and should not be interpreted as reflecting the views of the Federal Reserve Bank of San Francisco or the Board of Governors of the Federal Reserve System. Macro-Finance Models of Interest Rates and the Economy Glenn D. Rudebusch∗ Federal Reserve Bank of San Francisco Abstract During the past decade, much new research has combined elements of finance, monetary economics, and macroeconomics in order to study the relationship between the term structure of interest rates and the economy. In this survey, I describe three different strands of such interdisciplinary macro-finance term structure research. The first adds macroeconomic variables and structure to a canonical arbitrage-free finance representation of the yield curve. The second examines bond pricing and bond risk premiums in a canonical macroeconomic dynamic stochastic general equilibrium model. The third develops a new class of arbitrage-free term structure models that are empirically tractable and well suited to macro-finance investigations. This article is based on a keynote lecture to the 41st annual conference of the Money, Macro, and Finance Research Group on September 8, 2009. I am indebted to my earlier co-authors, especially Jens Christensen, Frank Diebold, Eric Swanson, and Tao Wu. The views expressed herein are solely the responsibility of the author. Date: December 15, 2009. ∗ 1 Introduction The...
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...Fundamentals of Macroeconomics Paper Daniel Souza ECO/372 March 31, 2014 Professor John Ilokwu Fundamentals of Macroeconomics Paper Covered in this paper is the explanation of fundamental terms used in macroeconomics and the analysis of the resulting affects different economic activities impose upon government, households, and business. Prior to diving the dissection of jargon and investigating the influence of activity, a basic definition of macroeconomics is beneficial. Colander (2010) writes, “Macroeconomics is the study of the economy as a whole. It considers the problems of inflation, unemployment, business cycles, and growth” (pg. 15). Now that a basic meaning has been provided, six key terms used in macroeconomics are detailed below. Key Terms Used in the World of Macroeconomics There exists many important nomenclatures used within the study and application of macroeconomics. This section explains six basic components that are essential in beginning to understand macroeconomics. Gross Domestic Product (GDP), Real GDP, Nominal GDP, Unemployment Rate, Inflation Rate, and Interest Rate are covered. Gross Domestic Product (GDP) The juggernaut known as Gross Domestic Product (GDP) refers to the financial appraisal relative to the total spectrum of completed goods and work performed inside a country, during a specified period of time (Investopedia, 2014). An annual computation is most common. The calculated GDP is a monetary picture of the total private consumption...
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...Faculty of Arts and Social Sciences School of Economics ECOS2002 Intermediate Macroeconomics Semester 1, 2015 Unit of Study Outline Unit Coordinator: Dr. Stella Huangfu Location: Room 339, Merewether Building Email address: stella.huangfu@sydney.edu.au Phone: +61-2-9036 9311 Consultation Hours: Thursdays 2-4 pm or other times by appointment. Tutors: Email address: Consultation Hours: Class times: Thursday 11am-1pm Venue: Bosch Lecture Theatre 2 This Unit of Study Outline MUST be read in conjunction with the Faculty of Arts and Social Sciences Student Administration Manual (http://sydney.edu.au/arts/current_students/student_admin_manual.shtml) and all applicable University policies. In determining applications and appeals, it will be assumed that every student has taken the time to familiarise themselves with these key policies and procedures. [ECOS2002 Intermediate Macroeconomics] UNIT DESCRIPTION This unit of study develops models of the goods, money and labour markets, examines issues in macroeconomic policy. Macroeconomic relationships, covering consumption, investment, money and employment, are explored in detail. Macro-dynamic relationships, especially those linking inflation and unemployment, are also considered. Exchange rates and open economy macroeconomics are also addressed. In the last part of the unit, topics include the determinants and theories of economic growth, productivity and technology, the dynamics of the business cycle, counter-cyclical...
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...Chapter 12 - Macroeconomic and Industry Analysis CHAPTER TWELVE MACROECONOMIC AND INDUSTRY ANALYSIS CHAPTER OVERVIEW This is the one of three chapters that covers fundamental security valuation. This chapter introduces a topdown approach to fundamental security analysis. It covers the first two components: macroeconomic and industry analysis. The textbook begins with a global analysis, particularly with respect to how the performance of domestic firms is influenced by international economic performance. The chapter’s main focus however is on aspects of the U. S. economy that affect security returns, including fiscal and monetary policy. In addition, a brief presentation of the determinants of interest rates is covered. The chapter concludes with a discussion of industry analysis that includes classifications of industries, information sources, the industrial life cycle and a Porter framework that can be used to analyze industry competition. LEARNING OBJECTIVES Upon reading this chapter, you should have a basic understanding of some of the macroeconomic factors that affect security prices. That is, how fiscal and monetary policy affect interest rates and security prices. And some industry groups are more affected by macroeconomic factors than others and the characteristics of an industry that affect its competitiveness. CHAPTER OUTLINE The top-down approach to fundamental analysis begins with analyzing the economy. Expected economic performance will influence...
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...of Macroeconomics by Smriti Chand Macro Economics The Nature and Scope of Macroeconomics! Introduction: The term ‘macro’ was first used in economics by Ragner Frisch in 1933. But as a methodological approach to economic problems, it originated with the Mercantilists in the 16th and 17th centuries. They were concerned with the economic system as a whole. In the 18th century, the Physiocrats adopted it in their Table Economies to show the ‘circulation of wealth’ (i.e., the net product) among the three classes represented by farmers, landowners and the sterile class. Malthus, Sismondi and Marx in the 19th century dealt with macroeconomic problems. Walras, Wicksell and Fisher were the modern contributors to the development of macroeconomic analysis before Keynes. Certain economists, like Cassel, Marshall, Pigou, Robertson, Hayek and Hawtrey, developed a theory of money and general prices in the decade following the First World War. But credit goes to Keynes who finally developed a general theory of income, output and employment in the wake of the Great Depression. Contents: Nature of Macroeconomics Difference between Microeconomics and Macroeconomics Dependence of Microeconomic Theory on Macroeconomics Dependence of Macroeconomics on Microeconomic Theory Macro Statics, Macro Dynamics and Comparative Statics Transition from Microeconomics to Macroeconomics Stock and Flow Concepts 1. Nature of Macroeconomics:________________________________________ Macroeconomics is the...
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...of the oil industry. Another basic but principle of microeconomics is the theory of the firm. This studies the actions of businesses as they strive to increase their profits. It looks at which resources they choose to utilize as inputs, how much they produce, and what they charge for their goods or services. In summary, microeconomics concerns itself with the human beings whose purchasing and production-related decisions come together to form the backbone of a given economy. Even when it involves companies, the focus of microeconomics is always at the personal level. The most concrete explanation of macroeconomics is that it is a study of the big picture in the economy. Instead of focusing on individual households and firms, it examines conditions within the economy as a whole. This is the most vital difference of micro and macroeconomics. In more technical terms, macroeconomics looks at the factors that influence aggregate supply and demand. Since it is...
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...CHAPTER ONE 1.0 INTRODUCTION 1.1 BACKGROUND OF THE STUDY For decades now, Nigeria has been experiencing disappointing performance in terms of growth in gross domestic product (GDP) and the general development of her economy. As a result, there’s no improvement in the level of poverty. In the 90s, came the era of globalization which connotes external opening and increased role of markets domestically (i.e. the market economy). To the developing world, market economy is a modern way of turning the economy around. The essence of globalization is to move the economy towards external liberation, focusing on market oriented economic system, export-led strategy and stabilization of the economy. In Nigeria, it was the era of structural adjustment programme in collaboration with the IMF and World Bank. The governments in the developing world, believes that it is more desirable to globalize which simply means to open up the economy and penetrate international markets. In time past, the world economy has undergone a fundamental shift towards an integrated and coordinated global division of labour in production and trade. In the 1950s and 1960s, productions were within national boundaries. The increase of oil prices in the late 1970s and the contractionary monetary policies of the United States during 1979 and 1982 period led to the increased interest rates and consequently indebted developing countries found they unable to service their debts. Continual refinancing was the only...
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...Fundamentals of Macroeconomics ECO/372 Macroeconomics studies the aggregate behavior of the economic system as opposed to microeconomics whose concentration is on subcategories or individuals and how they make decisions. The use of macroeconomics can have a direct impact on the choices made for the nation’s economic benefit. When employing macroeconomics an economist can determine why products have decreased or increased in price. It analyzes many factors that play part in the health of the economy. This study, though, complicated can be employed to encourage different government policies that develop a certain affect for instance; increased government spending can create jobs and increase employment this is called expansionary policy. Decreased government spending can have the opposite affect this is contractionary policy. Macroeconomics Terms There are different terms associated with macroeconomics are important to know and understand. One known term is Gross Domestic Product (GDP). GDP is the value of all finished goods and services produced in a certain country during a certain time frame. GDP measures a country’s standard of living. Two words associated with GDP are real GDP and nominal GDP. Real GDP is the measure of the gross domestic product value adjusted for change in prices; this can be owing to inflation. Nominal GDP uses current prices on products and services (Colander, 2010). Unemployment rate is another important part of macroeconomics it indicates...
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...Abstract Macroeconomics is a branch of economics that focuses on the behavior and decision-making of an economy as a whole. We can also understand macroeconomics as the study of the entire economy in terms of the total amount of goods and services produced, total income earned, the level of employment of productive resources, and the general behavior of prices. Macroeconomists also study aggregated indicators such as GDP, unemployment rates, and price indices to understand how the whole economy functions. And finally, macroeconomists develop models that explain the relationship between such factors as national income, output, consumption, unemployment, inflation, savings, investment, government spending and international trade. Definition: 1. Gross domestic product = gross domestic product (GDP) is the monetary value of all the finished goods and services produced within a country's borders in a specific time period. Though GDP is usually calculated on an annual basis, it can be calculated on a quarterly basis as well. GDP includes all private and public consumption, government outlays, investments and exports minus imports that occur within a defined territory. Put simply, GDP is a broad measurement of a nation’s overall economic activity. The formula to calculate the gross domestic product is as follows: GDP = C + G + I + NX where, C is equal to all private consumption, or consumer spending, in a nation's economy, G is the sum of government spending, I is the sum of...
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