Paper Topic:

growth and GDP

In 2002 , Heaka articulated that Macroeconomics relates to the study of the aggregate behavior of the economy and several factors influence it Consequently , the overall health of the economy is assessed through analysis of various economic indicators . The focus of Macroeconomics revolves around three things : national output , unemployment and inflation

National output is regarded with utmost relevance in the field of macroeconomics . Moreover , it is regarded as the a country produces or the gross domestic product (GDP . Thus , it provides a glimpse of the economic scenario at a specific time (Foner and

Garraty , 1991

In economics , Economic growth ' is a growth of potential output (Erber and Hagemann , 2002 . According to the discussion in Britannica Concise Encyclopedia (2006 , the real GDP , wherein inflation is considered is extensively utilized to measure an economy 's growth rate . In addition , the factors affecting GDP were also stated , these are capital , natural and human resources technological advancements status of governing institutions and trade policies (Britannica Concise Encyclopedia , 2006

From the posted article , which cited the ESBR (Economics Statistics Briefing Room ) reports , the current Economic scenario in the US is characterized by a positive GDP of 3 .3 . Specifically , 1 .1 increase in GDP from that of previous year , which takes account a 4 decrease in the corporate profits and the decline of disposable personal income (percentage ) rate to -0 .4

There is no other indicator in economics which is as universal as the GDP , as emphasized by Erber and Hagemann (2002 , but problems in using GDP growth to measure general well being is also recognized (i .e . no provision of information on income distribution , does not take account externalities and underground economy . In spite of the limitations of GDP as a growth rate measurement , an increase is generally considered as a positive change in the living standards ' of the population

Accordingly , a 3 .3 GDP growth rate in the US reflects a positive scenario in their economy , as analyzed through the national output (among other indicators : i .e , inflation , employment . In the posted article it was concluded that Americans are spending more today than they actually have resulting to worsening effects to the economy . That is , despite a positive GDP , a relatively low level increase of 1 .1 from that of the previous year fails to meet the expectations of many

The recent 3rd quarter report released by New America Foundation was also cited in the posted article , which supports the ESBR statements on the economic performance of US . The report emphasized that the US could have performed better , specifically , achieving much higher potential output and growth rate if not hampered by several factors . Accordingly further explanations suggest that US underperformed its economic potentials . This was attributed to the wrong policies and wrong growth agenda pursued by the government . The US growth had become dependent on the personal consumption resulting to inflation and trade deficit . In addition , the ability to promote sustainable economic growth rate is undermined by unsustainable level of consumer debt and inadequacies...

3 pages

32.0 KB

Free sing-up