ECO 372 Week 2 Individual - Fundamentals of Macroeconomics Paper

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Resource: Figure 3-1 in Ch. 3 of Macroeconomics.

Part 1

Describe the following terms in your words. Use the textbook as your guide, not sites like Investopedia, etc. Read my announcement regarding proper resources.

• Gross domestic product (GDP)
• Real GDP
• Nominal GDP
• Unemployment rate
• Inflation rate
• Interest rate

Part 2

Consider the following examples of economic activities:

• Purchasing of groceries
• Massive layoff of employees
• Decrease in taxes

Describe how each of these activities affects government, households, and businesses. Describe the flow of resources from one entity to another for each activity.

Write a 700- to 1,500-word paper summarizing the results.

Fundamentals of Macroeconomics
Macroeconomics is a relatively new concept considering the lack of interest there was in actually studying the economy prior to the 1930’s. It took a team of economists to develop specific terminology that deals with the problems the economy faces each and every day to better understand the differences between micro and macroeconomics. Today, macroeconomics deals with aggregate economic factors, such as the gross domestic product of nations, employment, money supply, level of government debt, the balance of trade, economic trends and inflation solely in entire nations or large economic sectors.
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