Main Principles of Macroeconomics - Assignment Example

Macroeconomist analysts use gross domestic product figures to derive business cycles and investigate their causes.    Macroeconomic analysts measure unemployment using rates that show the number of people available in the labor force who do not find work. These analysts observe that unemployment rates fall with progressive growth in the economy (Mankiw 26). Progressive economic growth manifests in the growth rate of a country’s gross domestic product. The rising gross domestic product indicates an increase in national output, hence, the need for many laborers to sustain the increased level of production. Employment reports impact trends in different sectors of the economy including the currency and bond markets (Rittenberg 530).    Inflation is the rate at which prices of goods and services in a country rise. Macroeconomic analysts measure inflation using the consumer price index and the gross domestic product deflator. The consumer price index captures the prices of a given number of goods at a given time (Mankiw 13). The gross domestic product deflator is a fraction of the nominal gross domestic product and the real gross domestic product. A rise in the prices of services and goods results from an instance where the nominal gross domestic product is bigger than the real gross domestic product. A change in the consumer price index corresponds to a change in the gross domestic product deflator with a difference of less than one percent (Rittenberg 505).  Read More