Macroeconomics - Understand the GDP, the economic cycle and the balance

As we analyzed the index of consumer prices, inflation and unemployment in the last section of this article we will talk about economic growth, business cycle and macroeconomics equilibrium in an economy.

1. GDP

This all measures of income and production through a series of national accounts. At the end of its fiscal year, cash flow IN and OUT are all added together to determine the GDP. Real GDP is to correct the distortion caused by inflationmeasure the tax on the production of goods and services in a given year, with prices of some base year, while the nominal GDP measures the output using the prices of the year.

2.L 'cycle

Economy moves from one country into a familiar pattern of four cycles
a contraction), the slowdown in growth or recession.
via B): the lower end of the cycle
c) expansion: growth and increased economic recovery.
Peak D): upper limit of the cycle.

The experiences of the normal business cyclefluctuations in the continuous cycle, with a leader - no matter how long - and of another recession is defined as 2 consecutive quarters of declining real GDP growth.

When the economy is growing: it reduces unemployment, inflation begins to grow and the growth of real GDP.

Moreover, when contracts for the economy: unemployment increases, lower inflation and real GDP decreases.

3. The macro-economic

Instead of aiming at any cost orsupply and microeconomics, economist implement measures against the level of prices and production for the whole economy. This is obtained by adding all the totals for the entire period.

a) the aggregate demand (AD)

DC measures the ratio between the total of all the results that consumers are willing to buy and the price level of this product. AD is the sum of what consumers, governments, enterprises and foreigners through exports and imports in the pastthe nation's economy.

b) the aggregate supply curve (AC)

CA correlates the relationship between the total of final goods and services of all manufacturers plan to offer a fixed price.

The two curves are used to predict the evolution of real GDP and price levels and curves to reflect what happens in macroeconomics curves.Where measure of these two curves intersect in the sample of macroeconomic equilibrium.

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