Factors Used to Measure the Economy - Essay Example

Comments (0) Cite this document
This essay talks about the factors that are used nowadays to measure our economy (such as the GDP, employment levels, inflation levels and the interest rates). The paper also analyzes which of the factors is the best to for measuring the performance of an economic system…
Download full paperFile format: .doc, available for editing
GRAB THE BEST PAPER91.9% of users find it useful
Factors Used to Measure the Economy
Read TextPreview

Extract of sample "Factors Used to Measure the Economy"

Factors Used to Measure the Economy The economic system of an entire country is often vast as well as complex. Despite its complexities, economists, political scientists, social workers as well as individuals at large are often concerned with a few factors which are used to measure the performance of a given economy. Of course there may be a bit of debate surrounding which factor or which measure is the best for measuring the performance of an economic system (BEA, 2007). However, by and large figures such as the GDP, employment levels, inflation levels and the interest rates can be used to measure the performance of an economy.
The GDP of a country is taken to be the value of all goods and services that are provided within the economic system. It can also be the total value which is added to a product at every stage of production whether the final product is a good or a service. It is measured on a period to period basis therefore it allows for easy comparisons to show how the economy has grown or shrunk over time (BEA. 2007). For example, if the GDP of the United States grows from 10 trillion dollars to 11 trillion dollars in real terms over a one year period then it can be said that the American economy itself has grown by a trillion dollars in one year.
Employment levels in a country show what percentages of people are gainfully employed from the population set which is eligible for employment. Essentially, the employment figures refer to the condition and the range of joblessness in an economic system. A high level of employment often shows that an economy is undergoing a booming period where the demand for labor is high and individual wages as well as living standards could be on the rise. On the other hand, a situation of low employment could mean decreasing returns for labor which in turn could lower the living standards for a lot of people. This statistic is often mentioned in news reports to give a rough estimate about the state of the economy even though it is often raft with small errors (BEA, 2007).
The last two measures, i.e. inflation level and interest rates are often connected with each other since both deal with the level of money which is being supplied to the economy. They are also popular in the media since they connect deeply with people’s abilities to borrow money (interest rates) and their money purchasing more goods and services (inflation). Interest rates refer to the cost of borrowing money which can be controlled by the government to slow down the economy if it appears to be overhearing or to increase economic output if the economy seems to be slowing down. Increasing inflation often means that prices are rising and unless wages keep up with rising prices, the standard of life for individuals is bound to go down. This is a measure of inflation with reference to the (CPI) Consumer Price Index which is most relevant for the public but econometricians may use other measures such as the GDP deflator to come up with other values of inflation (BEA, 2007).
Works Cited
Bureau of Economic Analysis. (BEA). 2007, ‘Glossary’ [Online] Available at: Read More
Cite this document
  • APA
  • MLA
(“Factors Used to Measure the Economy Essay Example | Topics and Well Written Essays - 500 words”, n.d.)
Factors Used to Measure the Economy Essay Example | Topics and Well Written Essays - 500 words. Retrieved from
(Factors Used to Measure the Economy Essay Example | Topics and Well Written Essays - 500 Words)
Factors Used to Measure the Economy Essay Example | Topics and Well Written Essays - 500 Words.
“Factors Used to Measure the Economy Essay Example | Topics and Well Written Essays - 500 Words”, n.d.
  • Cited: 0 times
Comments (0)
Click to create a comment or rate a document

CHECK THESE SAMPLES OF Factors Used to Measure the Economy

Measure for measure

...Inserts His/her Inserts Inserts Grade Inserts Here (Day, Month, Year) Measure for Measure The play measure for measure is about a man Claudio who is sentenced for having an illegal sexual relation with a woman Juliet. The play begins when the duke of Vienna, vincento, leaves the town leaving his friend Angelo as his deputy. The duke doesn’t actually leave the town; he just disguises himself as Friar. Angelo then decides to enforce the laws regarding the illegal sexual actions. According to the law, he decides to slay Claudio for illegally having sex with Juliet. Juliet and Claudio were already married but due to some problems they didn’t have a registered marriage....
2 Pages(500 words)Essay

The Global Economy: an Austerity Measure

...complained publicly that it is not possible to justify all the austerity measures simply because of the requirements of the integration of Europe (Andor, 2000, p. 140). The austerity measures may have the potential to become successful in the short run but will weaken the support of the public for the integration of Europe considerably. More spending on public works is likely to enhance the income as well as savings of the participants and so the liquidity of the economy will increase. If people have more money in their hands they will defer away from the lending of the banks. The level of investment will take the upward rising curve as the participants will divert the savings into...
6 Pages(1500 words)Coursework

Measure and Light

...not actually create physical things, climb ladders or use building tools. That was the task of skilled craftspeople. Boethius is mentioned, with his idea that mere carrying out rules to create a work of art if akin to slavery , whereas knowledge of the science from which a work is created is like being a great ruler. The architects are seen as not having a mason’s axe in hand, but were essentially geometrists with compasses and measuring rods. This idea was carried to its ultimate in Chartres, where God was seen as the perfect architect, using what is essentially mathematical science to create without any effort or toil. In the latter years of the 12th century Alan of Lille described God...
6 Pages(1500 words)Essay

Self-report measure

...of the test. The researcher employed the use of parallel forms reliability as the type of reliability used to assess the reliability of the test that was constructed. In this type of reliability, different versions of tests are carried out. The different tests are made to contain different test items but with the aim of collecting a relatively similar construct (Icove, Karl and Vonstorch, 2005). What may be acceptable reliability with parallel forms reliability is for there to be consistency with responses of candidates when a correlation assessment is performed. Once a correlation assessment shows vast variations in the variables that are measured, the reliability of the test will be...
5 Pages(1250 words)Assignment

Measure the warehouse efftiency

...Measure of Warehouse Efficiency The components of a warehouse are the ones which need a better understanding to manage it well. It primarily should cater to the objectives of an organization namely resource optimization and efficient services. Inventory and stock represent a large portion of the business investment and must be well managed to maximize profits. The most common problems with inventory are: Uncontrolled Inefficient Costly Unreliable The solution is an enterprise wide system to manage all resources and give better profits and service to its customers. Materials Requirement Planning (MRP) is one such system procedure which calculates and maintains an optimum manufacturing plan based on master production...
5 Pages(1250 words)Essay

Descriptions of methods used to measure

...This paper contains s of methods, equipment and instruments used to measure: pupillary distance (PD), monocular PD's, strabismus (squints)and near point of convergence. I. The distance between the pupils is measured to align the optical centres of the spectacle lenses with the centre of the patient's pupils. Firstly, the doctor is to distance total PD. 1. Using a penlight or transilluminator in his of her left hand, the doctor shines the light towards the patient. 2. With his or her other hand, the doctor holds a PD ruled against the bridge of the patient's nose. 3. The doctor closes his or her right eye and directs the patient to look at the centre of his or her left eye. 4. The doctor aligns the zero of the PD Ruler (Fig 1... ) with the...
4 Pages(1000 words)Essay

Shakespeare's Measure for Measure

...Running Head: "MEASURE FOR MEASURE" Justice In "Measure For Measure" By ______________ Shakespeare's measure for measure is no doubt aplay highlighting the principles of justice and injustice and at the same time the play provides several reasons to go through vengeance and justice. Every character in a play is presented as a symbol of justice, who is always willing to perform just as to gain justice. No one has ever read or seen 'Measure for Measure' without experiencing some bewilderment especially when it comes to fairness. Even on first acquaintance, the variety of impressions gives a disquieting effect on the reader or on the audience; and it is for sure that one feels graver displeasure on the part of such issues of the play... , which...
8 Pages(2000 words)Book Report/Review

Global economy/factors affecting global economy of Harley Davidson

...Factors Affecting Global Economy of Harley Davidson This study will focus on globalization strategy of Harley Davidson. This company is American motorcycle giant. It has already established their brand name in Europe but now this organization wants to expand their dealership network across Asia. Harley Davidson is known for manufacturing heavyweight motorcycles but now they want to manufacture all types of motorcycles. Later part of the study will explain about internet business model. This study also focuses on application of internet in terms of digital marketing. Harley can use different components of digital marketing to expand their business. Finally this study will focus on...
7 Pages(1750 words)Essay


... on fuel economy (MPG), model of vehicle, weight of vehicle, engine of vehicle, seating capacity of vehicle, size of vehicle, speed, size of engine, road condition, fuel price, and driver training. Because of time constraints and resource limitation on the side of the researcher, the sample size will be 200. The researcher will be sure to include vehicles of different models. References Gautam, S. (2010). What Factors Affect Average Fuel Economy of US Passenger Vehicles? Retrieved from Haworth, N. & Symmons, M. (2001). The Relationship between Fuel Economy and Safety Outcomes. Retrieved from ... Factors Affecting Vehicle Fuel Economy By Introduction A greater percentage of the total petroleum products in...
2 Pages(500 words)Essay

Measure Assessment

...Measure Assessment Measure Assessment  I am aware of the life factors that may affect the way I pursue my education, such as financial or cultural issues. Also, learning styles enable me to develop different ways to approach education and various subjects. My individual attributes that include: personality or social orientation play a significant role in how I interact with my colleagues. Technical competency entails the ability to understand technical subjects or topics. This entail having the right knowledge required to decipher technical factors. Technical knowledge describes an individual proven to be informed about technical subjects. Someone with technical...
1 Pages(250 words)Essay
sponsored ads
We use cookies to create the best experience for you. Keep on browsing if you are OK with that, or find out how to manage cookies.

Let us find you another Essay on topic Factors Used to Measure the Economy for FREE!

Contact Us