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Term Definition Paper

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Term Definition Paper

Gross domestic Product GDP is a measure of a country’s economic output. It is the market value of all final goods and services made in the borders of a country within a year. It is often positively correlated with the standard of living, alternative of measures to gross domestic product for that purpose. (Colander, 2008).
There are four parts to Gross Domestic Product: consumption, investment, government spending and net exports. Consumption is people spending money on goods or services, investment is different than normal investing it doesn’t mean investing in stocks or bonds; it actually means that businesses are spending money on factories and equipment for production. Government spending is money the government spends on goods and services. Net exports are when foreigner spends money on goods and services that are made in the United States.
What does real gross domestic product GDP mean? The market value of final goods and services produced in an economy stated in the prices of a given year, also nominal GDP adjusted for inflation. (Colander, 2008). Unlike nominal GDP, real GDP can account for changes in the price level, and provide a more accurate figure.
Inflation is a continual rise in the price level. Often referred to as a “constant-price”, inflation-corrected GDP or constant dollar GDP. (Colander, 2008) Inflation is the change of price levels over time. There are many cause for inflation, one example is when the government prints a large amount of money to help deal with a crisis. When this happens prices are raised to keep up with the amount of surplus spending.
Unemployment occurs when people do not have jobs and have been actively looking for work for the past 4 weeks. Unemployment rate is defined as a percentage of those in the labor force that is unemployed. (Colander, 2008)
Interest rate is the rate at which...

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