Fundamentals of Macroeconomics Paper
ECO /372

Sam Pirnazar
July 6, 2015

Now a days we know that there are numerous issues that actually affect our economy, things such as gross domestic product (GDP), nominal GDP, real GDP, inflation rate, unemployment rates, and as well as interest rates. Now as we all know all of these area actually can have massive influences over how we purchase groceries, weather there will be a large amounts of layoffs to employees, and even decrease in taxes that year.
What is Gross Domestic Products basically it’s the market value of services and goods that are produced in the country at any given time. Which this is usually considered an indication of the normal living situation within a country. However real GDP measures of the value of economic output that adjust for price changes. While Nominal GDP is a gross domestic product figure that has not been adjusted for inflation. In many way the unemployment rate are usually the measure of the frequency of unemployment and it’s calculated by dividing the number of people that are unemployed by the percentage of individuals that are actually working. While inflation rate is the percentage rate of change in price levels of over time, usually from one year to the next. Now let us also focus on the interest rate and the rate which interest is paid by a borrower for the use of money that they borrow from a lender.
All of these factors are related to our everyday lives and how we manage our money, what we spend our money on, and when we spend our money from simple things like buying groceries, but when you are on a very tight budget as some of us have experienced it can be pretty stressful and of whelming when just last week you were able to buy strawberries and this month they price have went high and it’s just beyond your budget. You began to see how the cost of groceries affects the government because this is a good way that products are produced and sold within our country; which affects GDP, real GDP, and nominal GDP. Even though we know that this is directly related to consumers spending and in times of a recession consumers pull back on their spending and go into savings mode. When consumers go into savings mode this affect every type of business because production is down and this could cause layoffs. Even though buying groceries can affects households, because thousands of people struggle every day to provide for their families and when the cost of goods constantly goes up but wages don't this makes it really difficult to live and to provide for families.
As we know massive layoffs affect people's standard of living and that is what the GDP is centered around; having to many layoffs can have a dramatic effect on the unemployment status which causes the economy to have a higher unemployment rate which causes salaries to go down so what their spending is down. Layoffs has a vicious cycle and globally in 2012, 200 million people were without employment and this shows the slowdown in employment growth. Companies were not hiring and people were not spending like they once was Layoffs affected the economy dramatically because it had a huge impact on consumer spending thing about it if no one is buying then production is down and that's how layoffs happen, and this affects households, businesses, and the government itself, personally it’s like a domino effect when one falls they all fall.
Think about it tax decreases can stimulate economic growth because if people are paying less in taxes, and at the end they have more money to spend. It has been proven over the year after year that when taxes decreases it can generate economic growth and federal. If you think about it we all spend more during tax season, because we usually get a good return; since I file as a parent and full-time student with a disable child, qualify for various tax breaks. In so many ways tax decreases can help a business if their taxes are decreased the organization will payout less and have more income. As we compare GDP, nominal GDP, real GDP, unemployment rates, inflation, and interest rates, it