ECO/372
Principles of Macroeconomics
Individual: Fundamentals of Macroeconomics Paper

Part 1
Gross Domestic Product (GDP): Market value of all goods that are produced in a given time period.
Real GDP: The measurement of GDP at constant prices.
Nominal GDP: The measurement of GDP at current prices.
Unemployment Rate: The measurement of knowing how many people are unemployed in the country versus employed people.
Inflation Rate: The measurement of increase in prices over a period of time.
Interest Rate: The dollar amount that is paid yearly on a loan by the borrower.
Part 2 The three activities affect each entity different, looking at how purchasing groceries would affect the government only if there was some sort of inflation going on. Then the government would raise taxes on goods in which will raise the prices of goods. As for households it can affect them in a negative way or a positive way. If we look at buying groceries in today’s economy it rather difficult because the price of goods are going up, but wages are staying the same. So, when it comes to a household of maybe 6 or 7 it would difficult to feed them because the take home pay is so low. The business aspect of buying groceries, the business will always succeed because people need and have to eat. So, if the economy is bad the grocery industry will not see a decline because people have to eat. Even when wages are low and the prices of goods are high people still have to buy groceries to survive. Massive layoff of employees will affect a household in a tremendous way; it would put the household in a very bad situation. If the people in the household does not have a means of steady income coming in it will affect them in a very negative way. Massive layoff of employees affecting the government would actually be low and not cause that much damage. Majority of the time it is the government