Essay on Inflation, Unemployment And The Fed

1467 Words Dec 18th, 2015 null Page
Inflation, Unemployment and the Fed

The real GDP is short for real gross domestic product, and the GDP is the toal value of all final goods and or services produced within a certain year/timeframe. It is important to undertsand that the GDP only counts the final product or service being used one time to have an accurate count or rate for that certain time period. For example, to get an accurate rate on on how much soda was consumed in 2015 you would not count all the soda that was manufactured in 2015 only how much was purchased in 2015. The amount consumed verius the amount produced is going to be different. This is also the case for detremining how much soda was produced in 2015, you would not count the amount consumed and produced because that would be considered double dipping and your facts would be inaccurrate. The purpose of the GDP is to determine whether the ecnonmy is growing successfully or failing. In other words, the GDP also measures the economy to determine if we are expanding or contracting. At any time the GDP measures an expansion this is also referred to as a reccession. A recession is the peak of a business cycle. Whenever measures a recession to become a expansion this is call a trough. A trough it the low area of a business cycle. Every year the United States (US) expereinces products and or services inflating or deflating in price. Inflation in the increase of an average price, and deflation is the decrease of an average price. Even…

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