Eco 372 Week 2 Individual Paper

727 Words Jan 18th, 2013 3 Pages
Week 2 Fundamental Macroeconomics
October 22, 2012
ECO/372

There are several factors that affect our economy, gross domestic product (GDP), real GDP, nominal GDP, unemployment rate, inflation rate, and interest rates. All of these factors have influences over how we purchase groceries, weather there will be massive layoffs of employees, and decrease in taxes.
Gross domestic product is the market value of final goods and services produced within a country in a given period. Which this is commonly considered an indicator of the standard of living within a country. Real GDP on the other hand is measure of the value of economic output that adjust for price changes. Nominal GDP is a gross domestic product figure that has not been
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Massive layoffs will definitely affect the unemployment rate and a higher unemployment affects the economy because this means more people are on unemployment so there salaries are down so what they are spending is down. Massive layoffs has a vicious cycle and globally in 2012, 200 million people are without employment and this shows the slowdown in employment growth, which means companies aren't hiring and people aren't spending like the where. Massive layoffs affect the economy dramatically because it has a huge impact on consumer spending which in my opinion makes the world go around. If no one is buying then production is down and that's how layoffs happen, and this affects households, businesses, and the government.
Tax decreases can stimulate economic growth because if people are paying less in taxes, they have more money to spend. It has been proven over the years that tax decreases generate economic growth and federal revenue will always rise. From a personal standpoint I always spend more during tax season because I usually get a good return; since I am a single parent and full-time student, therefore, I qualify for various tax breaks. These obviously affect my household because I am more disposable income. Tax decreases can help a business if their taxes are decreased the organization will payout less and have more income.
As we…