BUSINESS ANALYSIS
SECTION ONE
Bureau of Economic Analysis
1) How does our current real GDP reflect the current state of the macroeconomy?
The current real GDP has a greater implication on the existing state of the micro-economy. What this means is that the real GDP will act as an example of the distinction which exists between the nominal vs. the real values in economics. Since the nominal gross is regarded as the market value of the commodities produced within the region, such a value will thus depend on the amount of goods and services produced as well as the their respective prices. On the other hand the real GDP majorly will be accounting for the changes in prices which might occur due to inflation. Thus for adjustment purposes, the real GDP will have to be computed by using the prices from specified year or the base year. It is this which will enable the real GDP to be measuring the current changes in output which is distinguishable from changes in price.
2) The linkages between spending and income in the economy (is there an increase in personal income that coincides with the change in GDP).
The linkage which exists between spending and income in the economy is that consumer spending will assist in projecting the trends as well as overseeing the extent at which consumers will be affecting not only the US national but also the world economics. The reason for this is because consumers end up dividing their income amongst savings and consumption. Even though income for household will decline to zero consumption rate will not. They draw their future income or savings as a means of supporting household whenever income will be insufficient
3) According to the latest data and your own evaluation of the economy, where would you say we are in the Business Cycle? Explain in detail.
Expansion cycle. The performance of the US keeps on varying depending on the business cycle in which the economy is in. Basically it means that small stocks will have the capacity of growing faster thus enabling one to gain additional income through the use of high yield bonds. Moreover, the up-and-coming marketing will have the opportunity of growing faster in their premature stages of an upturn. Although they will be risky, the risk will be worth it as the global economy will be growing.
SECTION TWO
The Bureau of Labor Statistics
How do you expect income changed with these changes in price level? Explain in detail, including the difference between nominal and real income.
Changes in income have profound impact on the price level. First with increases in income it means that the prices of goods and services will increase because consumers will be having much to spend. On the other hand, decrease in income will result to the decline in the levels of income because of the low expenditure. In the long-run the two will adjust itself until the equilibrium price is obtained.
