Question

Have you ever wondered how the health of the economy is determined without a thermometer? In this activity, you will select a country and explore the concepts of nominal and real GDP to measure the economic health of your country. As part of your research, you will also explore these key economic factors.

Key Economic Factors

• Gross domestic product (GDP)
• Unemployment
• Poverty rates
• Housing Starts

Key Economic Factors

• GDP per capita
• Inflation
• Human development index
• Standard & Poor's 500

Key Economic Factors

• Population
• Interest rates
• Retail sales

Locate a recent article (published within the last year) that includes values for the key economic factors. You can use the Hunt Library, newspapers, new stations, or other credible sources to locate an article. Analyze your selected country's economic well-being. Include the following in your discussion.

• Discuss how nominal and real GDP for your selected country are affected if there is a decrease in taxes and an increase in interest rates.
• Identify and discuss at least six economic indicators for your selected country.
• State the relationship between GDP, net domestic product (NDP), national income (NI), personal income (PI), and disposable income (DI).

Summarize your findings using at least 250 words and provide a minimum of one reference. Use current APA formatting to document your sources.

Answer 1

Since oil prices go negative, the US wTi crude oil prices remain unattractive as storage costs get higher and supply remains higher because oil plants cannot be closed and thus US economy receives almost zero prices on selling in short run and economic growth deepdives as unemployment toonrises because of low revenues and low forex reserves.

Coronavirus has had huge impact on economic growth due to lockdown and shutdowns and social welfare losses amongst US population of 330 million.

The economic growth remains subdued as Aggregate demand and consumption both fall simultaneously also leading to fall in prices and inflation.

Investment is pumped out due to falling interest rate regime and lower economic outlook of companies.

Government spending is ramped up due to an expansionary fiscal policy by reducing taxes and spending. Also net exports go negative as imports surge due to supply shocks.

Negative growth in GDP per capita causes high unemployment and lower inflation based on Philips curve movement.

Thus in short run, aggregate supply is high but aggregate demand is low and real GDP falls. However in long run the economy stabilises.

The US has been great in fiscal stimulus of 484 billion dollars and US Fed unlimited bonds buying programmes worth 2 trillion dollars with rate cuts, CRR and SLR and liquidity coverage ratio cuts. Triggering automotic stabilizers and combined above policy will help alleviates financial distress and grow economic growth or real GDP and Inflation throufh higher consumption and disposable incomes.

The supplyvof credit availability rises causing its demand to go down considerably.

Sijce the interest rates are cut, the banks shall transmit easier loans availability at lower rates and thus loan markets will grow enormously.

However the cases has risen to 1 million approximately and states have been relaxed and thus caused havoc.

To avert this crisis, US must impose lockdown and gradually open economy using partial lockdown only after 2 months of complete lockdown. Major boost towards creating vaccination and healthcare for curing patients is required.

NDP= GDP - Depreciation

National income = household consumption + government spending + investment + net exports.

Personal income = National income + income earned but not recived+ income received but not earned

Disposable income= personal income - taxes

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