Question

Please define each of the following in your own words and in one Paragraph. Each student is responsible to understand the following 6 variables.

1. Real GDP

2. The Unemployment Rate

3. The Inflation Rate

4. The Interest Rate

5. The Level of the Stock Market

6. The Exchange Rate

Answer 1

Real GDP:-

• It refers to the value of all final goods and services produced in a country with in a given year relative to the base year prices.
• It usually refers to an Economic output that is adjusted for inflation or deflation.

Unemployment rate:-

• Refers to the percentage of people unemployed in the labour force even when they are willing or able to do a job.
• It is usually a state of joblessness as many people remain out of labour force.

The inflation rate:-

• Refers to the rise in the general price level of an Economy.
• It occurs when the money supply increases in an Economy due to expansionary monetary policy by fed.

The interest rate:-

• Refers to the extra amount charged along with the loan amount.
• It is the percentage of loan outstanding that is charged by the lender to the borrower.

Level of the stock market:-

• Refers to the buying and selling of securities or stocks in the market.
• It is the level at which various commodities, stocks and bonds are traded in the stock market.

The exchange market:-

• Refers to the value of one currency in relation to another currency.
• These Exchange rates are set in the foreign exchange markets consisting of various buyers and sellers.