Gross Domestic Products Essay Example | Topics and Well Written Essays - 1500 words

Gross Domestic Products - Essay ExampleWhen wage increases it would yield to higher production costs, thereby producing higher footings of goods and services and also increases the flash rate. To brand an equilibrium, unemployment rate must be consistent with the full employment rate. The interaction of supply and make is a vital part of macroeconomics, consumers ability to oblige bell changes and employers increasing the prices of the commodity may substantiate several implications triggering the either inflation or stagflation. If consumers are cannot keep pace on the increasing price commodities, inflation may occur, however if employers are passing their labor cost index on consumers aiming to generate profit through price increase on commodities yet consumer can still cope up with the changes, stagflation occurs, where business did not gain anything and yet did not beget any single loss. To illustrate further, we have to examine the countrys GDP of two of the worlds most prosperous nation, Australia, and United States. For over the past years, Australia economy has displayed worthily, however in 2006, it began to decline yielding only 2.5 % in real GDP. Drought, inflation, high oil prices, and economic deceleration attributed to the decreased in real GDP. (Economic and Social Survey of Asia and the pacific 2007). Domestic demand brought for the countrys thrust. Domestic demand comprises of business investment. High capacity utilization and high corporate profits served as a catalyst for the growing business investment in Australia.... When wage increases it would yield to higher production costs, thereby producing higher prices of goods and services and also increases in the inflation rate. To station an equilibrium, unemployment rate must be consistent with the full employment rate. The interaction of supply and demand is a vital part of macroeconomics, consumers ability to adapt price changes and employers increasing the prices of commodity may have several implications triggering the either inflation or stagflation. If consumers are cannot keep pace on the increasing price commodities, inflation may occur, however if employers are passing their labor cost index on consumers aiming to generate profit through price increase on commodities yet consumer can still cope up with the changes, stagflation occurs, where business did not gain anything and yet did not have any single loss. To illustrate further, we have to examine the countrys GDP of two of the worlds most prosperous nation, Australia and United States. For over the past years, Australia economy has displayed worthily, however in 2006, it began to decline yielding only 2.5 % in real GDP. Drought, inflation, high oil prices and economic deceleration attributed to the decreased in real GDP. (Economic and Social Survey of Asia and the Pacific 2007). Domestic demand brought for the countrys thrust. Domestic demand comprises of business investment. High capacity utilizati on and high corporate profits served as a catalyst in the growing business investment in Australia. Capacity utilization refers to the amount pf physical capital available to firms that is in use. Firms are given ample stock of capital equipment such as machinery, property spaces, factories, computers and telecommunications as