Macro4 - Essay Example

Policies are the set of rules and regulations which are adopt for systemizing the whole organization, company or any other place. It is need for proper guidance to run any business smoothly and successfully as well. Policies are revised after certain period, or if any of the policy fails and creative negative impact is also change according to specific need. Otherwise policies are made and followed for long time period (Pirayoff, 2004). The nominal GDP is calculated after considering the current situation and prices of goods.

It only gives a picture of current calculation. Real GDP is calculated after considering the records of previous year as well. It is more practical to consider Real GDP before making any policy for future and for present situation as well (Pirayoff, 2004). Consider the company is making 100 MP5 players. The price of each player is 100$. The total selling amount will be 10000$ a year. The nominal and read both GDP remain same. The change in price of laptop from 100$ to 150$ occur in next six months.

Now the nominal GDP is 15000$ and real remain the same which is 10000$ because real is calculated for whole year and nominal for present situation. When the nominal GDP is increased and company is making more profit than the expected value, the real GDP remains the same. This situation can be in reverse order. The price of MP5 player reduces and company bear loss for the production of certain product (Pirayoff, 2004). Policy makers must consider the data of at least 10 to 5 years before making any policy.

In any case the loss of future can give a little push back but not the major one. The risk management strategies are also consider while making any policy. The market value of company is also a major factor to drive the company from different ups and downs (Pirayoff, 2004). At the top of the next column are national income accounting figures for the United States. a. Compute the following: 1. Compensation of employees: $ 1,772 Calculation Compensation of employees billions of $ Wage and Salary + Wage and Salary Supplements $ 1,442 280 Compensation of employees $ 1,722 2.

Net exports: Net Export = Export – Import Net Export = 367 - 338 = $ 29 3. Net Private domestic investment: Net Private Domestic Investment = Gross Private Domestic Investment – Consumption of Fixed Capital = $ 437 - $ 307 = $ 130 b. Use these figures and any of your computations in (a) above to prepare in the table below an income statement of the economy: c. In this economy: 1.

Net Domestic product Net Domestic Product = GDP – Depreciation = 2,853 – 307 = $ 2,546 2. National Income is $ National Income = NDP – Net Foreign Income earned in US – indirect business Taxes = 2,546 – 0 – 255 = $ 2,291 3. Personal Income Personal Income = NI – undistributed corporate profit-corporate income taxes-social security contribution +transfer payment = 2,291 – 55 -88 – 148 + 320 = $ 2,320 4. Disposable Income Disposable income = personal Income – Personal taxes = 2,320 – 372 = $ 1,950 References: Pirayoff, R. (2004) Economics Micro & Macro.

Cliff Notes.