Essay on A Look Into The Principles Of Macroeconomics

1417 Words Apr 20th, 2016 6 Pages
Hannah Overly
Professor Hale
April 22, 2016
Final Paper
A Look into the Principles of Macroeconomics: Project Paper

Q: What is the gross domestic product?
A: Gross domestic product (GDP) is the total market value of all final goods and services produced within an economy in a given year. This is also commonly referred to as total output (O 'Sullivan, 100).
Q: Do increases in gross domestic product necessarily translate into improvements in the welfare of citizens? Explain your answer.
A: Increases in gross domestic product do not always translate into improvements in the welfare of citizens. Despite GDP being the best measure of output value within an economy it has so many moving parts that can cause slips in solid correlations between that of GDP measurements and general welfare of citizens. For example, the textbook discusses how exchanges such as housework and childcare, leisure, pollution, and the underground economy do in fact effect the market, yet they are not considered in the calculation of gross domestic product. So even though a factory may be producing tons of profitable product, an increase in GDP, the pollution from the production may be causing health issues among nearby citizens.
Q: What is unemployment? Why can 't it be driven down to zero?
A: Unemployment is defined as the individuals who are not currently holding a position in the work force. Unemployment is divided into three separate categories including cyclical, frictional, and…

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