ECO 372 Week 2 Individual Fundamentals of Macroeconomics Paper

Resource: Figure 3-1 in Ch. 3 of Macroeconomics.

Part 1

Describe the following terms in your word.

·         Gross domestic product (GDP)

·         Real GDP

·         Nominal GDP

·         Unemployment rate

·         Inflation rate

·         Interest rate

Part 2

Consider the following examples of economic activities:

·         Purchasing of groceries

·         Massive layoff of employees

·         Decrease in taxes

Describe how each of these activities affects government, households, and businesses. Describe the flow of resources from one entity to another for each of the three activities.

Write a 700 to 1,400 word paper summarizing the results.