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 gross domestic product are commonly done using the expenditure method, which adds total consumption, investment, government spending and send away exports (Dolan, 2010). substantive gross domestic product refers to gross domestic product evaluated based on the prevailing market tolls in a given year. Real 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 nominal gross domestic product (Dolan, 2010).This refers to the gross domestic product figure that has not received some(prenominal) 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.increase purchase of groceries by households is a clear indicator of their improved economic status. This fact enhances growth of existing businesses as well as the emergence of sore investments. In such a situation, the government benefits from increased tax collections obtained from value added tax and taxation from investments (Dolan, 2010).This refers to the reduction of the number of heap 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 pat(p) businesses will close down due to low 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 moderate in taxes implies that the government will strain i n meeting its expenditures. On the other