Current Macroeconomics

In: Business and Management

Submitted By susanmarie
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Current Macroeconomic Conditions Evaluating current macroeconomic indicators are essential for managers to monitor on an ongoing economic environmental scan of their organizations. There are many indicators and depending on the industry some are better than others. The primary measure of the economy’s performance is its annual total output of goods and services known as its aggregate output (McConnell, 2009). Gross domestic product (GDP) defines aggregate output as the monetary values of all final goods and services that are produced within the borders of a given country during a specified time frame which is usually a year (McConnell, 2009). To measure this accurately, all of the goods and services produced during the year of measure must be counted only once. This takes into consideration those products that go through a series of production stages before they actually reach the market for sale. One must realize that some of these components are bought and sold many times before becoming a part of the final good(s). GDP includes only the market value of final goods and ignores intermediate goods which are those goods and services that are purchased for resale or for further processing. Final goods references the consumption goods, capital goods, and services that are purchased by their final users. GDP was never meant to be the measure of our well-being but a measure of our production. Literally, the total value of the goods and services produced within the national borders in a given year (McArdle, 2009). GDP can and does record how much money we spend on health care and education; however, it cannot tell us whether the services we are purchasing are of desired quality or any good. Expenditures and income approaches are two different approaches to measuring GDP. We determine GDP value of output by summing all expenditures on that output.…...

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