StudentShare
Contact Us
Sign In / Sign Up for FREE
Search
Go to advanced search...

Concepts and Problems in Macroeconomics - Essay Example

Cite this document
Summary
In this report the perceptions of the Japanese public were analyzed to determine where they placed their confidence in the economy. It evaluated consumer and employment confidence and measured them against GDP and real unemployment. It was found that the Japanese public's confidence in the economy was a direct reflection of the unemployment rate…
Download full paper File format: .doc, available for editing
GRAB THE BEST PAPER92.5% of users find it useful
Concepts and Problems in Macroeconomics
Read Text Preview

Extract of sample "Concepts and Problems in Macroeconomics"

Download file to see previous pages

Japan is a consumer society where consumer spending fuels the economy. Analyzing the relationship between consumer confidence, GDP, and unemployment can give some insight into how closely perceptions are aligned with reality. Figure 1 indicates the relationship between the GDP and confidence levels. Both employment confidence and consumer confidence are closely related. However, the Figure 1 (Data from Worsley 2007) confidence levels trail the change in GDP by 12 months.

The GDP bottomed out in 2002, but confidence did not hit a minimum until 2003. Likewise, the decline in 2005 did not impact confidence levels until the middle of 2006 when employment confidence fell and consumer confidence flattened out. Figure 2 shows the relationship between relationship between GDP and real unemployment. The steep rise in GDP between 2002- 2004 precipitated a Figure 2 (Data from Japan: Unemployment rate 2007) steady decline in the real unemployment rate beginning in 2003 and continuing through 2006.

The Japanese public is keenly aware of the unemployment rate and is reflected in their spending confidence. The public's real measure of economic health is employment and trails the change in GDP by 12-24 months. Predicting consumer confid. By monitoring the GDP, Japan can expect the unemployment rate to follow the same trend in a period of 12-24 months later. Confidence levels, both consumer and employment, will track the unemployment rate directly. Investors can take advantage of this situation by preparing for an upturn in spending 12-24 months after the GDP begins to move upward.GDP1. 1.

Calculate real GDP for 2005 and 2006 using 2005 prices. By what percent did real GDP grow 2005 GDP = (90*18) + (180*100) = 1620 + 18000 = $19,6202006 GDP @ 2005 prices = (100 *18) + (190*100) = 1800+19000 = $20,800GDP Growth = (20,800 - 19620) / 19620 = .0601 = 6.01%2. Calculate the value of the price index for GDP for 2006 using 2005 as the base year. By what percent did prices increase (90*20) + (180*110) = 1800 + 19800 = $21,600PI = (21600 - 19620) / 19620 = 1980 / 19620 = .1009 = 10.09%3.

Now calculate real GDP for 2005 and 2006 using 2006 prices. By what percent did real GDP growGDP 2005 @ 2006 prices = $21,600GDP 2006 = (100*20)+(190*110) = 2000+20900= 22,900Growth = (22900 - 21600) / 21600 = 1300/21600 = .0601 = 6.01%4. Review the GDP information for the past few years from the Bureau of Economic Analysis's Website. Provide a brief summary of the GDP trends over that timeframe and discuss two or three events which may have caused these trends.GDP has generally steadily risen in recent history.

It stagnated in the early 70s due the oil embargo. Since Q2 in 2001, the GDP has risen every quarter except Q3 in 2001. This was probably a result of 9/11. The GDP had recovered by Q1 of 2002 and has had steady growth through this period of deficit spending.Hong Kong and

...Download file to see next pages Read More
Cite this document
  • APA
  • MLA
  • CHICAGO
(“Concepts and Problems in Macroeconomics Essay Example | Topics and Well Written Essays - 1000 words”, n.d.)
Concepts and Problems in Macroeconomics Essay Example | Topics and Well Written Essays - 1000 words. Retrieved from https://studentshare.org/miscellaneous/1509075-concepts-and-problems-in-macroeconomics
(Concepts and Problems in Macroeconomics Essay Example | Topics and Well Written Essays - 1000 Words)
Concepts and Problems in Macroeconomics Essay Example | Topics and Well Written Essays - 1000 Words. https://studentshare.org/miscellaneous/1509075-concepts-and-problems-in-macroeconomics.
“Concepts and Problems in Macroeconomics Essay Example | Topics and Well Written Essays - 1000 Words”, n.d. https://studentshare.org/miscellaneous/1509075-concepts-and-problems-in-macroeconomics.
  • Cited: 0 times

CHECK THESE SAMPLES OF Concepts and Problems in Macroeconomics

The differences between macroeconomics and microeconomics

Thimmaya (cited in Jain & Khanna, 2010) the core difference between the two fields is that price is the major determinant of problems in microeconomics whereas, income is the major determinant of problems in macroeconomics.... he core difference between the two fields is that price is the major determinant of problems in microeconomics whereas, income is the major determinant of problems in macroeconomics.... In other words, the decisions taken in microeconomics are primarily based on price such as factors of production whereas, the decisions made in macroeconomics are based on income such as total consumption and total investments....
5 Pages (1250 words) Essay

Explain the difference between macroeconomics and microeconomics. How are these two fields related

In it the principles, policies and problems relating to the full employment of the resources and the development of those resources are covered.... In contrast, macroeconomics is concerned with the national economy as a whole and provides a basic understanding of how things work in the economy.... In contrast to microeconomics, macroeconomics is concerned with the conduct, arrangement decision-making performance of the entire economy.... Macroeconomists studies the relationship between the following: National income National Output Total Savings Total Investment Total Consumption Total Unemployment International trade International finance By definition, macroeconomics is very wide in its scope and study as it deals with the problems of unemployment, economic fluctuations, inflation, and deflation....
4 Pages (1000 words) Essay

External Macro Environment in Organization

macroeconomics is the holistic study on the interrelation of all stakeholders of the general economy.... Understanding macroeconomics Economist use long-run growth and short run business-cycle frameworks in understanding its macroeconomy's supply and demand relation.... It relates to the production, distribution and consummation of goods and services in a society including problems relating to recession, unemployment, inflation, productivity, government budget deficits and low gross domestic products....
8 Pages (2000 words) Essay

Role of Current Crisis in Macroeconomics

“The current crisis sheds more light on macroeconomics than vice-versa”.... Overview of the Topic Literally, the topic means that the current crisis reveals more information on macroeconomics than macroeconomics reveals more information on the current crisis.... hellip; Conceptually, the topic wants to put up the argument that the factors in the current economic crisis and the trend of its exposes the weaknesses associated with present day global macroeconomics practice....
13 Pages (3250 words) Essay

Macro Economics Research Paper

Macro Economics Name: Institution: Introduction macroeconomics refers to a subdivision of economics that handles the performance, behavior, structure, and decision-making of the entire economy (Abel, 2010).... hellip; macroeconomics and microeconomics are the two most general areas of economics.... macroeconomics, on the other hand, is a wide field of research.... This paper will discuss the basic concepts of macroeconomics....
4 Pages (1000 words) Research Paper

Macroeconomics vs. microeconomics

The issues related in macroeconomics are unemployment, economic growth, inflation as well as monetary and fiscal policies.... The primary textbooks on economics try to distinguish between macroeconomics with that of microeconomics.... hellip; macroeconomics It deals with the analysis of the entire economy including the issues that have the capability of affecting the economy.... macroeconomics uses the general equilibrium theory to study the economy as a whole....
3 Pages (750 words) Essay

Micro and macro economic on us trade

his paper defines in detail what macroeconomics and Microeconomics are about and what their impacts on the economy of a country are.... Businesses that are well-built may consider monopolizing the market by either controlling all possible ways of production or purchasing industrial resources, therefore forcing the competitors to shut down and leave....
4 Pages (1000 words) Essay

Comparison Between Macroeconomic and Microeconomic

The primary textbooks on economics try to distinguish between macroeconomics with… macroeconomics deals with the analysis of the entire economy which includes issues with capabilities to affect the economy.... macroeconomics uses the general equilibrium theory to study the economy as a whole.... Some of the aggregates used by macroeconomics macroeconomics also analyses some sub aggregates like spending on consumptions and investments and their components....
15 Pages (3750 words) Essay
sponsored ads
We use cookies to create the best experience for you. Keep on browsing if you are OK with that, or find out how to manage cookies.
Contact Us