Fundamentals of Macroeconomicsis the study of how decisions are made by consumers and suppliers, how these decisions determine the allocation of scarce resources in the marketplace, and how public policy can influence market outcomes for better or worse. A basic understanding of microeconomics is essential to the study of macroeconomics because “micro” provides the foundations upon which “macro” is built. It is pointless to try to explain, for example, the demand for money and how it affects interest rates in the economy without a grasp of how suppliers and buyers interact in a market.
DefinitionsGross domestic product (GDP) is a key pointer used to measure a country’s economy. GDP represents the total dollar value over a certain time period. When the GDP is positive is reflects the country has grown over that period compared to the previous. Real GDP represents the nation output of goods and services, minus the price changes from a base year. Nominal GDP gives an estimate of the figure before taking into account inflation. Unemployment is calculated by the total of unemployed workers that are actively seeking to gain employment. Inflation rate is the increase of price of goods in relation to a dollar. Interest Rate is the amount charged to an asset by a lender. A lender typically determines the rate on the risk of the consumer
The GDP of a country is a measure of the government’s ability to perform its duties to manage and stimulate the economy. A country’s GDP of 1.6 percent is not considered to be overvalued because of a weakness in currency or a lack of confidence in its ability to deal with inflation. A nation’s GDP will move in the direction of 1.5 percent of GDP’ a level that makes economic activity very unlikely.
The GDP of a country is a measure of its ability to fulfill its duties to the government. A country’s GDP is estimated from an assessment of demand, rather than actual activity, in the areas of production and consumption. A country’s GDP generally represents what the government uses to provide services. GDP may include the government’s budget, revenues, spending, expenses, tax payments, and interest and withholding. Government revenues and expenditures are usually a measure of real expenditure of the government rather than real purchases of the same country’s assets. An indirect fiscal system used to distribute government resources to governments such that they have the capacity to pay more taxes.
The GDP of a country is an indicator of the government’s ability to pay income taxes. GDP is the same kind of government measure that the National Economic Institute uses (the International Finance Agency) to quantify gross domestic product (GDP).
A country’s GDP typically represents what the government uses to provide services.
If the government is not paying its obligations, the US government will call a credit crunch to see if revenues are adequate.
Some countries that have a GDP lower than this can be said to have a “budget crisis” because of its lack of an ability to pay its obligations. Countries that have budget crises should be able to cover their debts. The IMF estimates that a country with a budget crisis might have a GDP above 1 percent. The US government has been able to cover its debts because of its lack of credit and because of its inability to pay their official budget debts.
As I’ve touched on before in the past, it is important not to confuse that a lack of credit can lead to budget problems (such as deficits). Instead the following chart summarizes the problem:
http://www.huffingtonpost.com/2017/11/12/world-bank-revenue-of-a-japan-has-a-budget-crash-forking-in.html
The United States has a budget crisis over the last six months that was the result of two factors. The first was the Federal Reserve’s new stimulus package that went into effect on Aug. 1 of this year (Gross Domestic Product), an adjustment of the Fed’s monetary policy against the dollar and the imposition of an additional mortgage-backed securities restriction. The third was the Federal Deposit Insurance Corporation’s mortgage policy settlement in 1999 with the mortgage insurers and the bank of New York against losses that the banks had incurred during that same term. The Federal Reserve issued a bond for the banks, which means
Our economy is important to us all who live in the United States; so for some being aware of not only the current events but those from the past as well. There are resources available to give us this important information.
ResourcesGlobal Macro Forecast Database this covers 49 countries that is 93% the world’s GDP, with baseline forecast and alternative scenarios; these forecasts out 10 years with a quarterly that is updated monthly. Under the baseline view it reports a monthly analysis forecasting assumptions