The Role Of Macroeconomics

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Macroeconomics is the level and branch of economics that helps find studies of how a country performs, detailing the structure and it also gives insight to indicators that reflect how the economy is functioning overall. Macroeconomics was created in the idea of being able to measure the health of the whole economy and be used as a guide to the government policies to implement and fix those problems. The United States and other countries governments use models that help them analyze and determine the outlook of strategies and policies they will use to implement within that government. The objective of polices that are made in macroeconomics is the idea of increasing or to maximize the nations income, stabilizing economic growth, developing…show more content…
The best and the most important measure of growth in a country is using the Gross Domestic Product or the GDP. When we look at the GDP it is the dollar value of all the final goods and services that are produced within a country’s borders in one year. There is also the use of the Gross Domestic Product Per Capital which is the GDP that is divided by the population and it identifies on average how many products each person makes. We have to be careful and must understand that is included and not included in the GDP. Intermediate goods, non-production transactions (nothing that is produced), non-market and illegal activities are not included in the GDP. There are ways the GDP can be calculated such as using expenditures approach which adds up all the spending on the final goods and services that are produced in that given year. The equation that is used is GDP=C+I+G+(X-M) and in the United States the (X-M) is negative because we import more that we export. Another way is the Income Approach that will add up all the income that is resulted from selling all the final goods and services in a given year. When using this approach this total is referred to factor payments which are the payments that are made from scarce resources or the factors of production for in return for services. When thinking about which…show more content…
When you think about unemployment it is more than just not having a job. The definition of unemployment is that individuals that are able to work and are currently actively looking for a job but are not working. To determine who is unemployment there needs to be a clear indication of who is in the labor force and who is working or not working. When determining the labor force in the United States you need to be 16 years old or older, able and willing to work, currently not institutionalized, not in the military, in school or a person who is currently retired. There are three types of unemployment that contribute to unemployment and how we identify each type of unemployment because not each unemployment types are the same. In frictional unemployment, this situation is considered temporarily unemployed or you are in-between jobs at the moment. These individuals are qualified and able to work that have a highly transferable skill set. A good example would be seasonal unemployment because the employment time is due to the time of year and the nature of the job. In the second type of unemployment there is structural unemployment. It changes in the labor force that makes some skills very obsolete. these workers do not have transferable skills that lead to those jobs never coming back and those set of workers would need to learn a new skill for a job. An example is
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