Fundamentals of Macroeconomics

This paper has two parts. In the first part which is part one, This paper will define Gross Domestic Product, Real GDP, Nominal GDP, Inflation rates and Interest rates. In the second part of the paper this paper looks and three scenarios, buying groceries, massive layoffs of employees and decreasing taxes. This paper is tells how in these scenarios will the employee, government and households will be effected.

Part 1

Gross Domestic Product

Gross Domestic Product is the monetary value of goods and services rendered from within the country annually.

Real GDP

Real GDP is the monetary value or services and goods rendered from within the country annually with inflation.

Nominal GDP

Nominal GDP is the monetary value or services and goods rendered from within the country annually without taking inflation into consideration.

Unemployment Rate

Unemployment rate is the percentage of people in the country that are not working but are looking for work.

Inflation Rate

Inflation rate is the percentage of which prices in the country are rising.

Interest rate is the percentage that charged to a borrower for a loan or asset.

Part 2

Purchasing of groceries

In order to purchase groceries there has to be groceries to purchase. It begins with farms and factories. There are all kinds for businesses that produce groceries. Farms produce meats, vegetables, fruits, wheat, rice etc. They sale these products to stores and other businesses like Kellogg’s who make cereal and Pillsbury