Sawyer Dinzler Period 3

Economics Final Paper

1/18/19

Economic indicators are key instruments into understanding how well or poorly the
economy is running, and helps us analyze the economy overall. The indicators that help us
monitor our economy are Gross Domestic Product, Unemployment Rates, Inflation, and the
Federal Reserve Bank.
Gross Domestic Product, or GDP for short is the value of all final goods and services
produced within the country's borders in a given year. This means it takes the overall value of all
goods, whether its measured quarterly or annually, as a measured economic performance rate
so the country can compare it internationally to other countries. GDP is calculated by adding
private consumption + gross investment + government investment + government
spending + (exports – imports) = the overall economic performance for a country. This
will give a value to the economic performance and depending on how high or low the
number it will show if the country is performing better or worse. The difference between
real GDP and nominal GDP is that real GDP is calculated with inflation compensation in
mind, so if you calculate nominal, it could be way different and off due to inflation.
Factors that influence GDP would be the factors used to calculate GDP, which would be
private consumption, gross investment, government investment, government spending
and cost of exports - imports. Current statistics are 3.4% change with a positive
growth.
Unemployment is also a huge economic indicator that helps countries analyze
the economic status of a country. Frictional unemployment is when someone is looking
for a job but takes time to do so , meaning at the time they are unemployed. Seasonal
unemployment is due to seasonal needs, like running a plowing business will be active
in the winter but shut down in the summer. Structural unemployment is when a worker
is skilled in a certain classification of work and thus is unemployed because they don't
fit in a specified job. And Cyclical unemployment occurs when the economy is bad and
when it goes back up jobs will be gained again. Full employment would be reached
when there is no cyclical unemployment present in an economy, the current statistics of
unemployment is a 3.9% growth in amount of people employed compared to previous
years.
Inflation is a huge part in the calculation of economic performance, this is
because inflation is the change in the value of the currency a country uses, if inflation
rises, a certain unit of currency will be worth less. Inflation is caused by a rise in prices,
and can also be caused by a rise in wage, making goods and services go up. Inflation
isn't just an increase of a price of one good or service, but instead priced of a whole
economy. Current stats show an increase of 2.02% meaning we are growing, making
the USD worth slightly more.
 My prediction for the economic growth of the U.S. in following years would he
that we will continue to slowly grow over the years until we hit such a high point that
can't be supported and the economy either declines at a decent rate or crashes. If it
does crash the U.S. will have to depend on upcoming demands of products consumers
need / want to spark economic growth again.