Week 13 HW

Throughout the week, we learned of the big indicators of the economy. GDP (Gross Domestic Product. It means how much stuff we make, but only takes into account final goods, or goods that have theoretically reached their final buyer. It's not always a good indicator as things like the black market, though still considered products that reach their final buyers, don't fit the bill. We always want to be above 0%) is always accompanied by CPI (Consumer Price Index. It is the government looking at the average cost of prices throughout the country every month during the year. The goal of this is 0-3%  increase). Neither of those measure a key factor, though. We learned about unemployment (One must meet the following factors to be able to be considered a part of unemployment: Must be unable to find work, must be looking for work, must be physically able to work, must be willing to accept a wage consistent with your training and ability. There are four main types -- frictional, structural, seasonal, and cyclical. To be doing good, we want to reach full employment, which means unemplayment must be below 6%) on Finance Friday.

If our GDP is 4%, and our CPI is 2%, then our economy is doing great.
If our GDP is -1% and our CPI is 4%, then our economy is not doing very well.
When CPI is negative, that is called deflation.

(Based off what I've heard from other classes, this is what I understand about a huge national debt...) A huge national debt is a bad thing because that means that we are spending more money than we have. Sometimes, like in our case, a country (China) could buy us out of debt, but then, in a sense, we are owned by that country, and we owe our debt to that country.