Learning Team Deliverable Essay

Measuring Domestic Output and National Income – Ch. 24 Topics comfortable Kris is comfortable with the concept of gross domestic product (GDP) as it is the dollar value of goods and services in a country during a set period. Walter is comfortable with the GDP concept and understands that is the economic thermometer of the country’s current financial status. Topics Struggle Kris still has to wrap his head around nominal GDP and real GDP when it comes to the GDP Price Index. So calculating real GDP is dividing nominal GDP by the price index. What is the difference between real GDP and nominal GDP? Walter also struggles with the concept of nominal GDP, and how it interacts with inflation. If GDP goes up and inflation goes down†¦it seems to be my understanding of the formula for calculating the nominal GDP that is holding me back. Application of topic GDP is fluctuates with whatever final good or service is bought by a customer. Living through life affects the GDP. If the GDP declines for too long, economists normally label the economy as being in a recession. Business Cycles, Unemployment and Inflation – Ch. 26 Topics comfortable Kris is comfortable with the different business cycles and measurement of unemployment. These items also affect the GDP. Walter is comfortable with the different symptoms of a recession, a period of decline lasting more than six months in total output. Of which high unemployment rates is another tell of a recession. Topics struggle Kris struggles with the concept of inflation and how it affects money today compared to money values in the past. Walter is struggling with defining a recession’s severity. Two examples given were the Great Depression and the recent recession in the last few years, Is the intensity or length of time that the recession lasts that makes one more severe than the other? Application of topic The business cycle is very familiar in Kris’ organization as the company goes through yearly contractions and expansions based on the demand from consumers in the market. The business cycle is also something Walter is familiar with in the hotel industry. The hotel industry goes up and done depending the current state of the economy. The Aggregate Expenditure Model – Ch. 28 Topics comfortable Kris is comfortable with the concepts of equilibrium GDP and disequilibrium GDP. Equilibrium is the point where goods produced equals goods purchased. Disequilibrium is any situation where goods produced are greater than goods purchased and vice versa. Walter is comfortable with the concept of GDP equilibrium, The basic premise of this equilibrium being that supply meets demand. Topics struggle Kris did not struggle with any concepts in the chapter, as they were all straightforward and easy to understand. Walter struggled with the concept of disequilibrium and how often, or what circumstances causes this to happen. I assume it is the opposite of the equilibrium and that demand supply exceeds demand but do not feel comfortable enough with the concept to say for sure. Application of topic As such, Kris cannot think of a time where there was equilibrium GDP. In reality, consumer tastes vary and it would be difficult to reach equilibrium Walter thinks that when the economy is doing well the equilibrium can be met because consumers are finically settled to continue purchasing products and business continue to produce according to demand. Aggregate Demand and Aggregate Supply – Ch. 29 Topics comfortable Kris is comfortable with aggregate demand in which it shows the real GDP that consumers desire to purchase at different price levels. Aggregate supply shows the relationship between the price level and the output of producers. Walter is comfortable with the concept of aggregate demand, and how consumer spending and government investments play into that calculation. As prices increases, consumer demand decreases and vice versa. Topics struggle Kris did not struggle with any concepts in this chapter. Walter struggled with understanding why aggregate supply is not affected by price levels. Application of topic Supply and demand is central to the market and economics in general. Consumer tastes always affect supply and demand. When the economy is bad and underemployment is high the demand for hig priced products decreases. Fiscal Policy, Deficits, and Debt – Ch. 30 Topics comfortable Kris is comfortable with fiscal policy, deficits, and debt as it affects his organization. Market rates are affected by the fiscal policy of the government. More or less spending affects the company’s contraction or expansion. Walter is comfortable with the concept that the fiscal debt and deficit show the governments current financial state. Topics struggle Kris struggles with the concept of automatic or built-in stabilizers. As the text states that a built-in stabilizer is something that increases the government’s budget, what kind of items constitute as a built-in stabilizer? Walter did not struggle with any of the general concepts in chapter 30. Application of topic The budget deficit affects all citizens as the government does not wisely use the tax payer’s funds properly. There is a lot of waste that keep the  government in debt. Walter notes that when the fiscal debt is higher so are taxes and fines. The misspending of the government is then the burden of the people.