2%. Okun's Law posits that unemployment can only improve so much given sluggish GDP growth (Burgen, Meyer & Tasci, 2012)
However, because of the breadth of product offerings the company offers across the healthcare spectrum, they have been able to maintain profitability to a degree that few companies have. Since profit margins in the healthcare industry remain high (especially for pharmaceuticals (Angell, 2012)) Abbott primarily uses this type of information to plan the launch of new goods and services
For this report, gross domestic product (GDP), the consumer confidence index (CCI), and the personal consumption report (PCR) will be used as indicators to explore the Abbott Laboratories. GDP is the indicator that is most often used to determine "the market value of all goods and services produced by the economy during the period measured" (Barnes, 2012)
These transformations are supporting key industries (such as: defense) which helps to boost assistance to a variety of sectors. (Amadeo, 2012) However, over the long-term, these levels can become problematic as this will lead to higher interests rates and taxes
When this happens, there will be changes in the overall amounts of economic activity that are occurring. (Masters, 2012) For example, after the end of World War II, America's debt levels were at 122% of GDP spending
It takes money out of my current cash flow because it is being saved for some other purpose than my daily activities. Savings occur when "workers receive more income than they spend on the purchases of goods and services" and represent "the portion of a person's income that is retained or invested for us in the future," (Buck, 2008)
Macro Economy Macroeconomics: Circular Open and Closed Systems "The behavior of a macroeconomic system is determined by the interactions of a great many actors and institutions," and the subject is an incredibly complex one to study (Hannes, 2012, p 1)
In this, a short time perspective is highlighted in a Keynesian perspective (Hannes, 2012). Here, the research suggests that "elements cannot be easily determined nor predicted as there are uncertainties prevailing in the external environment," (Morgan, 2012)
This is the case with macroeconomics. The behavior of macroeconomics is affected by the behavior of the politicians that control and drive it (Mankiw 2009)
An economist would see macroeconomics for what it is, the structure and performance of an entire system, not just the small parts that make it up (Mankiw 2009). Politicians get stuck on only getting their personal ideas through, or the collective ideas of their specific political party, that in the end, nothing happens (Zeleny & Parker 2011)
Once this takes place, it will provide the greatest insights, as to the underlying challenges that all governments are wrestling with in dealing with this issue. (Weitzman) In the article titled Judge Blocks State's Union Rights Law, Weitzman (2011), discusses the current situation that is taking place
A recent CNNMoney article, for example, reported that "Gross domestic product -- the broadest measure of economic output -- rose at a 2.5% annual pace in the first three months of the year, driven largely by a pick-up in consumer spending" (Kurtz, 2013), before engaging in the customary round of conjecture as to the underlying reasons for this encouraging economic activity
The concept of resource allocation is introduced by observing that a society's collective want for goods and services (demand) is unlimited, while the resources needed to satisfy these wants (supply) is based on finite amounts of raw material, human capital, and other resources. A decided scarcity of bluefin tuna within global fish stocks, for example, results in a lack of this resource for all of its available uses, from sushi in Japan or tuna salad sandwiches in America, creating a production possibilities curve which has become increasingly flat, in terms of output, as time progresses (Monbiot, 2010)
The reason being that the GDP doesn't include what is going on in the secondary market for example exchange of goods and services or if someone is growing their own food or if someone is buying something second hand, so we can say that GDP does not accurately reflect the nation's welfare. (Brue, Flynn, & McConnell, Macroeconomics, 2011) There are several ways in which a country's GDP can be manipulated
The difference between the nominal GDP and the real GDP is that the nominal GDP is not accounted for inflation whereas the real GDP is. (Mankiw, 2002) GDP does not very accurately measure the welfare of the nation
Macroeconomics Why is economics considered as a social science? What role does economics play in your personal and professional lives? Economics is considered as a social science because it deals with human behavior as to how individuals try to satisfy unlimited wants with the limited or scarce resources. (Sowell, 2010) Economics has a very important role in our lives, we may not realize it but any decision we take, anything we do, economics is involved
Governments with flexible exchange rates in place cannot set exchange rates at levels other than equilibrium. This can make them benefit certain sectors of economy at the expense of other sectors (Reagle & Salvatore, 2000)
Fixed exchange rates impose some element of price discipline on a nation that may not be practicable under flexible exchange rate systems. This makes nations with higher rates of inflations to be entangled in never ending deficits in balance of payment and loss of reserves (Salvatore, 1996)
Macroeconomics is also concerned with the interest rates, wage rates, general price level, inflation levels and the exchange rates. (Barro, 1997) Macroeconomics can play a major role in the economic success of a nation because it helps in the understanding and regulation of the various factors that play a major part in a country's economic performance
The capability of an economy to produce increases with time when it is accompanied by technological change and capital accumulation, which in turn improves labor productivity and increases labor supply. (Diulio, 1997) Macroeconomics is closely linked to governmental policies and politics which in turn can affect the economic success of a nation