Core Macroeconomics

The Gross Domestic Product as explained in chapter five of our Core Macroeconomics book is one of the main gauges used to measure the well-being of a nation's economy. It signifies the total dollar worth of all goods and services produced over a precise time period. After reading many articles and rereading chapter five I found two articles that are very interesting and informational. These articles showed me how the gross domestic product works in the real world. The first article Estimates of US Gross Domestic Product (GDP) Growth or Contraction Show ‘Large and Persistent Errors,’ CNBC Analysis Finds from the International Business Times published on March 3, 2016 proves the estimations can be off because of the strict data deadlines, and

This article shows how gross domestic product influence the economy. GDP growth was originally estimated to rise only point seven percent but had actually increased one point four percent. The upward changes reflected a stronger pace of consumer spending than previously estimated. This rise was mainly because of consumer spending, which accounts for more than two thirds of U.S. economic activity. Due to the fact spending was on the rise the fear of recession weakened. The article shows how quickly the GDP can change depending on the spending habits of households. In the end of the third and the entire fourth quarter profits began to drop. Gasoline prices went up to about two dollars, because of this people had to budget more money monthly for gas and began to get tighter with their extra spending. By the end of 2015 multi-national companies, Gross Domestic Product fell to One hundred and sixty billion dollar after decreasing thirty three billion dollars. This had been the largest drop since 2008, other than the British Petroleum oil spill in the Gulf of Mexico that happened in 2010. Not only did the US profits drop the rest of the world’s profits dropped by twenty three billion dollars. Manufacturing profit also declined by four point one billion. Profits in petroleum and coal sector tumbled one hundred billion dollars after rising seven billion dollars in the third quarter. Not only does this affect the United States it also affects the world. Profits from the rest of the world decreased seven billion dollars in the final three months of 2015 after sliding twenty three billion dollars in the third quarter. This shows how when consumer spending drops it affects the GDP greatly. Chapter five in our book explains business cycles and how they have peaks and troughs. This helped me understand that although this article may make people