Macroeconomics Assignment: Economic Performance Analysis and Metrics

This assignment analyzes macroeconomic indicators, focusing on the US economy. It begins by defining and examining Gross Domestic Product (GDP), its fluctuations since 2008, and the impact of the global financial crisis. The assignment then explores Real GDP and its trends. National Income (NI) is defined and compared to GDP, highlighting changes since 2008 and the factors driving these changes. Disposable Income (DI) is discussed, detailing its components and changes post-2008. The assignment also evaluates whether GDP accurately measures societal well-being, arguing that it only reflects income. Finally, it examines the Gross State Product (GSP) of New York in 2008, comparing its performance to other states. The assignment uses data from the Bureau of Economic Analysis (BEA) to support its analysis.

Running head: MACRECONOMICS
Macroeconomics
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Answer 1
Gross domestic product (GDP) is the value of total amount of final goods and services
produced in the geographical area of a country in a specified period of time, which in most cases
is one year.
The GDP of the USA has changed a lot after 2008. In 2009, it fell to $14, 448.9 billion
from $14, 712.8 billion in 2008 (Apps.bea.gov., 2020). However, after that GDP of the country
has increased sharply.
The fall in GDP in 2009 is due the global financial crisis that hit the whole world
including the USA in 2008 and stayed through 2009. After that, the growth was occurred due to
continuous investment and macroeconomic policies taken by the government and central bank of
the country.
Real GDP is the inflation adjusted value of nominal GDP. It is derived by dividing the
nominal GDP by GDP deflator. The real GDP of the country in 2008 was $96.343 billion. After
2008, the real GDP of the country has gradually increased except in 2009 when there was a drop
in real GDP due to the global financial crisis.
Answer 2
The national income (NI) of the USA in 2008 was $12, 325.8 billion (Apps.bea.gov.,
2020). National income tells us about the total amount of income earned in money terms by all
the individuals and enterprises of a country during a specified time years which is usually on
year.

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GDP measures the total value of final goods and services produced in the geographical
area of a country, that is the total income generated inside the country even and it includes the
income of individuals (who are not citizens) and enterprises even if it is from foreign countries.
However, in the case of NI only the income of the individuals (citizens) and enterprises that
originated in the country is included.
The national income of the USA has increased over the time since 2008. The only drop in
the national income was during the global financial crisis in 2009. In 2019, the national income
of the country was $18, 155.92 billion and thus it is evident that the value of national income has
increased after 2008(Apps.bea.gov., 2020). The major reasons for continuous increase in national
income of the country are continuous investment, technological progress and economy boosting
policies taken by the government and central bank of the country.
Answer 3
The disposable income (DI) of the USA in 2009 was $ 10, 907.1 billion (Apps.bea.gov.,
2020). Disposable income is the total amount of income after paying personal taxes. Therefore,
disposable income comprises of all the components of personal income except personal taxes.
The components of disposable income are wages and salaries, supplement to wages and salaries,
proprietors’ income with inventory valuation and adjustments of capital consumption, rental
income after adjustments of capital consumption, personal income from assets, personal current
transfer receipts, social benefits received by the government and other receipts of current transfer
from business.
The disposable income has increased in the USA after 2008 and the current value of
disposable income in the country is $16, 420.3 billion in 2019. Each year after 2010 has shown

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rise in disposable income except 2009 since the year was the year of global financial crisis. The
economic growth of the country has improved the working condition of the country along with
that creation of new jobs has increased personal income and thereby increased the amount of
disposable income. The economic growth that boosted the economy of the country it has been
driven by investment, technological progress and government policies.
Answer 4
Gross domestic product (GDP) is the total value of all the final goods and services
produced inside the geographical area of a country. The well-being of society depends on various
factors that includes education, health, job security, accessibility to necessary things, standard of
living, protection against all odds, crime free society and income. The development of all the
components mentioned above increases well-being of the society. On the other hand, from GDP,
only the information about the income of a country can be identified. Income is one of the many
components of well-being of society and thus it is not possible to measure well-being of the
society and just from its income value or its growth. Therefore, it can be said that with help of
value of GDP one cannot measure the social well-being of the society.
Answer 5
The gross domestic product or the gross state product (GSP) of New York in 2008 was $
1, 099.2 billion. New York was at the 8th position based on its GSP value in 2008. New York
contributed 7.5% to the GDP of the GDP of the United States in 2008. The states that were ahead
of New York in 2008 with respect to GSP or percentage contribution to the GDP of the country
were California with 13.5 %, Texas with 8.4 %, Mideast with 17.9 %, Great Lakes with 13.9 %,
Southeast with 21.7 %, Southwest with 11.8 % and Far West with 18.8 %. There were 59 states
in the USA at that time and New York ranked 8th among those states in terms of GSP

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(Apps.bea.gov., 2020). Therefore, it can be said that the performance of New York has been
considerably well but the economy of states like New York should generate more GSP.

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Reference
Apps.bea.gov. (2020). Retrieved from https://apps.bea.gov/itable/iTable.cfm?
ReqID=70&step=1
Apps.bea.gov. (2020). Retrieved from https://apps.bea.gov/iTable/iTable.cfm?
reqid=19&step=2#reqid=19&step=2&isuri=1&1921=survey
Apps.bea.gov. (2020). Retrieved from https://apps.bea.gov/iTable/iTable.cfm?
reqid=19&step=2#
Apps.bea.gov. (2020). Retrieved from https://apps.bea.gov/iTable/iTable.cfm?
reqid=19&step=2#reqid=19&step=2&isuri=1&1921=survey
Apps.bea.gov. (2020). Retrieved from https://apps.bea.gov/iTable/iTable.cfm?
reqid=19&step=2#