Economics: Production Output Performance, Unemployment, and Price Level Analysis

Running head: ECONOMICS
Economics
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ECONOMICS1
Table of Contents
Introduction................................................................................................................................2
Production output performance..................................................................................................3
Real GDP...............................................................................................................................3
Real GDP growth rate............................................................................................................4
Real GDP per capita...............................................................................................................5
Government measure to achieve production output performance.........................................6
Unemployment...........................................................................................................................6
Unemployment rate and type of unemployment....................................................................6
Types of Unemployment in Japan..........................................................................................7
Trend in unemployment rate..................................................................................................8
Government measure to overcome employment....................................................................8
Price level analysis.....................................................................................................................9
Inflation..................................................................................................................................9
Causes of inflation..................................................................................................................9
Trend in inflation rate...........................................................................................................10
Government measure to achieve stable price.......................................................................11
Conclusion................................................................................................................................12
References................................................................................................................................13

ECONOMICS2
Introduction
Economy of Japan is characterized as a highly developed economy following the
principles of market economy. In terms of nominal GDP Japan is the third largest economy of
the world. Three major sectors of the economy are agriculture, industry and service.
Agricultural sector accounts nearly 1.4 percent of total GDP of Japan. The main reason
behind a relatively lower contribution of agriculture in aggregate output is limited availability
of arable land. Rice is the main cereal crops produced in the nation. Japan is considered as
one of the biggest importers of agricultural product in the world. Japan has a highly
diversifying industrial and manufacturing sector with industry accounting 24 percent share of
GDP. Important subsectors in the industrial sector include automobile manufacturing,
consumer electronics, optical fibers, semiconductor manufacturing, copy and facsimile
machines and optical media. The most important sector of the economy is service sector
accounting 75 percent of economic activity of the nation. Major services industries of Japan
include banking, real estate, insurance, retail, transportation, tourism and telecommunication
(Allen, 2013). Besides domestic production, Japan export goods in which it enjoys a
comparative advantage in goods such as engineering-oriented product and research and
development led products to different countries of the world. The top five export markets of
Japan are China, United State, South Korea, Taiwan and Hong Kong. The highly developed
technology and associated economic development has attracted many companies to operate in
Japan. Top five companies of Japan are Toyota Motor, Mitsubishi UFJ Financial, Sumitomo
Mitsui Financial, Nippon Telegraph & Tel and Honda Motor.

ECONOMICS3
Production output performance
Real GDP
Gross Domestic Product of a nation indicates value of produced goods and services in
a nation in monetary terms. GDP is computed by estimating aggregate value of the output
either using current year prices or using fixed base year price. If GDP is computed using
respective market price of current year then it is called nominal GDP. Computed GDP using
market price of a fixed base year is termed as real GDP (Heijdra, 2017). Real GDP by
estimating GDP in terms of a fixed base year price gives an inflation-adjusted measure of
output.
Trend in Real GDP
Figure 1: Real GDP in Japan (2008 – 2018)
(Source: Tradingeconomics.com, 2019)
As shown in the figure above, real GDP in Japan declined between 2008 and 2009.
The decline in real GDP during this time was followed by economic recession occurred in the
third quarter of GDP. During this time, there was a considerable decline in business spending.