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Government spending (G) may include stimulus packages, investments in infrastructure, or defense spending. The taxpayer funds such spending, but also benefits from such spending. By giving people jobs and hiring private contractors, the government generates more wealth. The newly-employed purchase more goods and services, which has an overall positive effect on the economy. For example, even if a citizen is employed at a grocery store, if workers on a government project have more money to spend and buy more food, the grocery store and its employees can become more financially secure, and escape the grip of the recession.
Net exports (X-M) are the fourth and final component of GDP. Net exports constitute "the amount by which foreign spending on a home country's goods and services exceeds the home country's spending on foreign goods and services. For example, if foreigners buy $200 billion worth of U.S. exports and Americans buy $150 billion worth of foreign imports in a given year, net...
Net exports take into consideration the goods and services produced within the nation, minus the net imports. An employed worker in America may produce goods that are shipped abroad. His or her output is tallied as a part of GDP -- but so is a consumer's fondness for Italian chocolates over American chocolates. The attractiveness of consumption of domestic goods vs. imports is affected by the weakness or strength of the dollar relative to other currencies, as well as favorable trade agreements, tariffs, and other pro-free trade or protectionist policies.
Reference
Kaplan, Jay. (1999, January). Principles of macroeconomics. University of Colorado.
Retrieved October 31, 2009 at http://www.colorado.edu/Economics/courses/econ2020/section6/GDP-components.html
Net exports. (2009). Investopedia. Retrieved October 31, 2009 at http://www.investopedia.com/terms/n/netexports.asp
Reference
Kaplan, Jay. (1999, January). Principles of macroeconomics. University of Colorado.
Retrieved October 31, 2009 at http://www.colorado.edu/Economics/courses/econ2020/section6/GDP-components.html
Net exports. (2009). Investopedia. Retrieved October 31, 2009 at http://www.investopedia.com/terms/n/netexports.asp
Summary Economic forecasting refers to the process of trying to predict the future state of the economy through a series of different indicators. This process helps to understand the probable future of a nation’s economy and for policymaking to help promote economic growth. When developing an economic forecast, various macroeconomic factors/conditions are taken into consideration. This paper provides an economic forecast of the U.S. economy based on recent economic indicators in
As such, the amount repaid to the lender does not accurately reflect adjustments in its purchasing power. To compensate, nominal interest rates float; they change with inflation rates. Real interest rates, on the other hand, do factor in inflation rates. With this type of return rate, the borrower experiences an increase in purchasing power. 9. Cyclical unemployment arises out of a nation's reduction in productivity; it occurs when an economy
This also implies inadequacies in fiscal sustainability, which influences investments in private sectors. The second channel happens through the level, composition and quality involved within the public investment, which shows the level at which the public investment replaces the private investments (Schmidt- Hebbel, Serven, & Solimano, 1996). The final channel regards the level of taxation on the corporate earnings and the rules applicable in depreciations. There have been arguments that fiscal policy
cell phone market is global in scope, with manufacturers and distributors in most of the developed world. However, there are five top-tier firms that clearly dominate the market: Nokia, Samsung, LG, Motorola and Sony Ericcson. These five firms account for about 70% of the global business. Nokia is in Finland, Motorola in the United States, the rest are Asian. Second tear firms are Apple, Research in Motion, and HTC.
Social, Cultural, And Political Influence in Healthcare Delivery Social, cultural, and political inequalities are detrimental to the health and healthcare system of the U.S. This is because the U.S. is one of the most multicultural, overpopulated, diverse and undergoing rapid economic growth. The federal government has embarked on efforts geared at addressing unsustainable costs of health care in the U.S. With the leadership of the current president, Barrack Obama, initiatives of
Although the research tools provided by the ISO 14001 framework are both qualitative and quantitative, this approach is consistent with the guidance provided by Neuman (2003) who points out that, "Both qualitative and quantitative research use several specific research techniques (e.g., survey, interview, and historical analysis), yet there is much overlap between the type of data and the style of research. Most qualitative-style researchers examine qualitative data and vice