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GDP is mainly applied in determining the stability of a country’s economy. Calculations of gross domestic product are commonly done using the expenditure method, which adds total consumption, investment, government spending and net exports (Dolan, 2010).
Real gross domestic product refers to gross domestic product evaluated based on the prevailing market prices in a given year. Real GDP can also be regarded as inflation corrected gross domestic product. Real GDP has the capability to indicate changes in the price level with a high accuracy compared to nominal gross domestic product (Dolan, 2010).
This refers to the gross domestic product figure that has not received any adjustments on inflation. It is also the value of services as well as goods produced in a given country after the final stage of production.
Increased purchase of groceries by households is a clear indicator of their improved economic status. This fact enhances growth of existing businesses as well as the emergence of new investments. In such a situation, the government benefits from increased tax collections obtained from value added tax and taxation from investments (Dolan, 2010).
This refers to the reduction of the number of people under employment in a given country. The implications of undertaking such a step include negative impacts on the government, households, and businesses. Massive layoff of employees means that a large number of people within a country will have a reduced purchasing power. In such situations, household living standards will come down; businesses will close down due to low purchases, and government’s revenue collection will go down. Economically stable citizens within a country comprise a key pillar of a country’s economy (Dolan, 2010).
Revenues generated from taxation are the principal financers of the government budget. Therefore, a decrease in taxes implies that the government will strain in meeting its expenditures. On the other
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Industry A has 20 firms and a Concentration Ratio (CR) of 20%. Industry B has 20 firms and a Concentration Ratio of 85%. Addressed in the paper are the names of these industry types, characteristics inherent, potential long run adjustments and implications of the anticipated adjustments.
In fact, many people refer to it as inflation, which bases on the fact that, if inflation increases by a particular percentage, the index will also increase by the same amount, hence the two are directly related.
It is calculated from the summation of all the annual output of the goods and services in a country. With regard to income, GDP is expressed in terms of output producing factors; labor and capital, or the expenditure on the output by the government businesses and individuals (Schnatz, 2000).
Similarly, high unemployment rate does not augur well for the economy as it tends to raise the income disparity among the people. The paper attempts to explore how unemployment and inflation can be tamed through policy matters. The US has experienced high unemployment and high inflation rates in the past.
Economic strengths and weaknesses of a country depend on its macroeconomic performance. Today's society consists of various stake holders such as the government and their policy makers, firms and their managerial staff, individual households and their economic activities, researchers, academicians and students, multilateral bodies, international investors, foreign financial institutions and non-governmental organizations, among others.
The actual or realized expenditure is the amount households, firms and government spend on goods and services, i.e. GDP (Y), while planned expenditure (E) is the amount they would like to spend on the same goods and services. Now the three major determinants
On the other hand South Korea recorded the most impressive growth in its livings standards since 1960 because it posted a growth of 1304.5%, while the United States posted a growth of 166.2% since 1960.
In that context, President Obama needs to look into some aspects of the American economy, which have not only traditionally constituted the essentials of American economy, but a neglect of which has really diluted the American economy. America badly needs to restore its