Fundamentals of Macroeconomics Essay Example | Topics and Well Written Essays - 500 words

Fundamentals of Macroeconomics - Essay ExampleGDP is mainly applied in determining the stability of a countrys economy. Calculations of crude(a) domestic product are commonly done victimisation the expenditure method, which adds total consumption, investment, government spending and net exports (Dolan, 2010). touchable gross domestic product refers to gross domestic product evaluated based on the prevailing market prices in a given up year. existent GDP can also be regarded as inflation corrected gross domestic product. Real GDP has the capability to indicate changes in the price level with a high accuracy compared to titular gross domestic product (Dolan, 2010).This refers to the gross domestic product figure that has not received each adjustments on inflation. It is also the value of services as well as goods produced in a given country after the final stage of production.Increased purchase of groceries by households is a clear forefinger of their improved economic status. This fact enhances growth of existing businesses as well as the emergence of newly investments. In such a situation, the government benefits from increased tax collections obtained from value added tax and receipts from investments (Dolan, 2010).This refers to the reducing of the number of plenty under employment in a given country. The implications of undertaking such a step include negative impacts on the government, households, and businesses. Massive layoff of employees means that a large number of people within a country will have a reduced purchasing power. In such situations, household living standards will come down businesses will close down due to measly purchases, and governments revenue collection will go down. Economically stable citizens within a country comprise a key pillar of a countrys economy (Dolan, 2010).Revenues generated from taxation are the principal financers of the government budget. Therefore, a decrease in taxes implies that the government will stra in in meeting its expenditures. On the other