Running head: Fundamentals of Macroeconomics Paper

Fundamentals of Macroeconomics Paper – Part 1

Fundamentals of Macroeconomics Paper – Part 1 * Gross Domestic Product (GDP) – The monetary value of all the finished goods and services produced within a country's borders in a specific time period, though GDP is usually calculated on an annual basis. It includes all of private and public consumption, government outlays, investments and exports less imports that occur within a defined territory.

* Real GDP - An inflation-adjusted measure that reflects the value of all goods and services produced in a given year, expressed in base-year prices.

* Nominal GDP- A gross domestic product (GDP) figure that has not been adjusted for inflation.

* Unemployment Rate - The percentage of the total labor force that is unemployed but actively seeking employment and willing to work.

* Inflation Rate - The rate at which the general level of prices for goods and services is rising, and, consequently, purchasing power is falling.

* Interest Rate - The amount charged, expressed as a percentage of principal, by a lender to a borrower for the use of assets. Interest rates are typically noted on an annual basis, known as the annual percentage rate (APR).

Running head: Fundamentals of Macroeconomics Paper

Fundamentals of Macroeconomics Paper – Part 2

Fundamentals of Macroeconomics Paper – Part 2
Purchasing of groceries affects the households, government and businesses. The households demand for the groceries is determined by the need and the prices at which the groceries are sold at any given time. Purchasing of groceries satisfies the consumer need for consuming the commodity. In addition, the consumer disposable income is reduced therefore the consumer is constrained in consuming other commodities. On the other hand, businesses are also