Macroeconomic Variables: Key Indicators, Aggregate Demand and Supply

Macroeconomic
Variables

Contents
INTRODUCTION...........................................................................................................................3
MAIN BODY..................................................................................................................................3
Key Economics Variables............................................................................................................3
The Aggregate Demand...............................................................................................................4
The Aggregate Supply:................................................................................................................4
The key Economic Indicators......................................................................................................5
CONCLUSION................................................................................................................................5
REFERENCES................................................................................................................................6

INTRODUCTION
In Macroeconomic we study the behaviour of aggregate economy but Macroeconomic
variables are those variables which are associated with the aggregate economy and that can be a
region, a country, population of the country (de Mendonça and da Silva, 2018). Macroeconomics
variable ate the main indicators of current trends in the economy.
MAIN BODY
Key Economics Variables
By Analysing the key economic variables, we can easily get a better understanding of pulse
of economic activities.
 Real GDP: Real GDP measures the value of goods and services produced by an
economy in given period. Basically it measures the total economic output of a country,
and then adjusted changes in prices. Real GDP compares year to year GDP from different
years for more useful because it highlights the comparison between both the quantity and
value of product and services. Real GDP is calculated by dividing the nominal GDP with
the deflator GDP.
 Inflation Rate: Inflation is the rate at which the general level prices of goods and
services is rising. It refers to decline in the purchasing power of currency over a period
of time. Inflation may be seen as positively or negatively depends on the rate of change
and an individual viewpoint. Inflation index which are mostly used are the Consumer
Price Index and Wholesale Price Index (Fassas, Papadamou and Kenourgios, 2021).
 Unemployment Rate: Unemployment rate is the percentage of the people without a job
or actively seeking for a job. Unemployment rate is excepted to rise when jobs are scarce,
or economy is in bad stage or unemployment rate falls when the economy grows at a
healthy rate.
 Interest Rate: Interest rate refers to the cost of credit, borrowing cost. Investments are
high when the rate of interest are low this is because business generate the cash flow still
in the low profitable investments for the payment of interest.