Answer to Question #93825 in Macroeconomics for Nothando

Question

Provide a detailed explanation on how macroeconomic variables can be measured

Answer 1

When determining macroeconomic variables, one should focus on these three variables, gross domestic product (GDP), the unemployment rate, and the inflation rate.

Gross Domestic Product=private consumption +gross investment +government investments + government spending + (export - imports).

Unemployment rate = The number of unemployed individuals ÷ labor force which includes both employed and unemployed. Then multiply the outcome by 100 to get the percentage rate of unemployment.

Inflation rate =the percentage change in price index from one year to another. That is the difference between last year's price index and this years price index divided by last year's price index multiplied by 100. For example if the current last year's price index was 100 and this yearthe price index rises to 110, then the annual inflation rate will be (110-100)÷100 then multiply the outcome by 100. Thus the inflation rate will be 10%.