Fundamentals of Macroeconomics

There are many terms that are important to understand when it comes to the fundamentals of Macroeconomics. Gross domestic product, (GDP) refers to the values of all goods and services produced within a country, including all of the countries exports, during a given period of time, usually annually. Real GDP or gross domestic product is 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 is a gross domestic product figure that has not been adjusted to reflect inflation. The unemployment rates are the percentage of people actively seeking and willing to work, but are unemployed among the labor force. Inflation rate refers to the rate at which the prices for goods and services rise, while purchases decline. Interest rate is the amount that is charged, usually annually, by a lender to the borrower in exchange for the money or asset to be used, in addition to the principle amount.
Economic Activities
In the United States, there are many economic activities that affect the government, households, and businesses. For example, activities such as purchasing groceries directly affect households by providing the supply for the aggregate demand of food that is needed for people and families. This has an affect on households because the consumer needs to eat, therefore buy groceries. Purchasing of groceries also has an affect on the business that the groceries are purchased from, as well as the business that the grocer purchases the food from initially, weather it be factory or a farm. While most food is exempt from being taxed, there are items that are taxed, like candy, soda, and ice in the state of Texas (Texas Comptroller of Public Accounts, 2007), which affects the government because the money earned from the taxable items goes to the