International Paper - Essay Example

In economic terms the GDP is defined as the, "total market value of all the goods and services produced in a country in a given year, equal to total consumer, investment and government spending, plus the value of exports, minus the value of imports." In a layman's terms the GDP is the sum total of all the goods and services produced in a country in a given year. It's relevance to the business planning of the Big Auto Drive is that, it will give the company an idea on how it faired in comparison to the other similar companies and what kind of a role did it play in contributing to the GDP of the country.

Another significance of the GDP is that it shows the position of the sellers and their products. Inflation is the, "persistent increase in the level of consumer prices or a persistent decline in the purchasing power of money, caused by an increase in available currency and credit beyond the proportion of available goods and services." (Robinson K., April 2007) In simple terms inflation is the rise in the value of commodity and fall in the value of money. The selection of Inflation as one of the macroeconomic measure of output and prices for the planning of the Big Auto Drive can be justified in many ways.

Inflation has a direct impact on variables like consumption, savings and investment. Inflation affects the economic growth of the country and is the cause of higher levels of inequity in income.Relationship between macroeconomic variables and Big Auto DriveThe sales data of the different commodities of Big Drive Auto shows a kind of uniform trend. The margin of disparity in sales from 98' to 07' is pretty much on an average level. For instance, table one illustrating the vehicle sales unit, shows that in the year 1998 the company sold 139 units followed by 160 in 99' then 145 in 00' and 133 in 01'.

The highest number of unit sales achieved by the company was in the year 2003, the number of sold units accounting to 167. 2001 was the year the company sold the lowest number of units, 133. This shows that the difference between the maximum and the minimum number of sales in the span of 8 years from 98' to 07' is not very much. But one thing to be noted here is that from the year 03' on the sales have been on the higher side, in the 160's line. So the relevance of this data to the U.S GDP is that, the highest contribution made by the company to the country's economy in terms of vehicles' sale was in the year 2003.

The data of an organization also helps to map the growth rate of the GDP of a country.The fact that inflation leads to the rise in prices of goods and commodities is known to everyone. But the core knowledge of the effect of inflation on