Macroeconomics Essay- “This week, we will focus on how to measure a country’s economy. Describe how a country of your choice’s economy is measured…”
This week, we will focus on how to measure a country’s economy. Describe how a country of your choice’s economy is measured. Explain why it is desirable for a country to have a large GDP. Evaluate the impacts of stimulus checks on each of the components of the U.S. GDP. Identify something that would raise GDP and yet be undesirable? Guidelines and Expectations: Be clear and concise in your writing. Your initial post for your discussion should be at least 250 words. Be sure to answer all questions. Always use materials provided in class to answer your questions. Cite information, but MLA formatting is not required.
Answer
Macroeconomics Discussion Post on GDP
By: Essayicons.com
The United States economy is measured primarily by Gross Domestic Product (GDP). GDP adds up the total market value of goods and services produced in a particular year. In other words, it is the sum of everything produced in the United States for a specific year. Production data is compiled through the Bureau of Labor and used by the Bureau of Economic Analysis to calculate the Gross Domestic Product.
It is desirable to have a large GDP since a large GDP is an indicator of a large (strong) economy (Bolt & Zanden, 2021). A desirable GDP can indicate increased living standards and greater economic opportunities in a country. Further, a desirable GDP attracts investments and enhances a country’s overall global influence and competitiveness. The components of the U.S. GDP are “personal consumption, private domestic investment, government consumption investment, and net exports” (Bolt & Zanden, 2021). Stimulus checks can boost consumers as the funds can be used for immediate purchases, therefore increasing the GDP from personal consumption. Regarding private investment, stimulus checks can encourage investors to invest more (in stocks, real estate, or other assets), potentially increasing private investments. The issuance of stimulus checks increases government expenditure, directly contributing to the GDP. Lastly, the impact of stimulus checks on net exports (exports minus imports) is uncertain and unlikely unless they affect consumer behavior significantly.
One thing that would raise GDP and yet be undesirable is natural disasters such as earthquakes and hurricanes. Rebuilding or recovering from a natural disaster increases economic activity in various fields, such as construction, repairs, and housing. The increase in economic activity would raise the GDP, but the destruction caused by the disaster would reduce overall well-being.
It is desirable to have a large GDP since a large GDP is an indicator of a large (strong) economy (Bolt & Zanden, 2021). A desirable GDP can indicate increased living standards and greater economic opportunities in a country. Further, a desirable GDP attracts investments and enhances a country’s overall global influence and competitiveness. The components of the U.S. GDP are “personal consumption, private domestic investment, government consumption investment, and net exports” (Bolt & Zanden, 2021). Stimulus checks can boost consumers as the funds can be used for immediate purchases, therefore increasing the GDP from personal consumption. Regarding private investment, stimulus checks can encourage investors to invest more (in stocks, real estate, or other assets), potentially increasing private investments. The issuance of stimulus checks increases government expenditure, directly contributing to the GDP. Lastly, the impact of stimulus checks on net exports (exports minus imports) is uncertain and unlikely unless they affect consumer behavior significantly.
One thing that would raise GDP and yet be undesirable is natural disasters such as earthquakes and hurricanes. Rebuilding or recovering from a natural disaster increases economic activity in various fields, such as construction, repairs, and housing. The increase in economic activity would raise the GDP, but the destruction caused by the disaster would reduce overall well-being.