Title of Assignment: Take any one macroeconomic variable and explain its effect on the
GDP or of any three different countries (preferably, 1 developed, 1 developing and 1 under-
developed country) and compare the same with respect to the economy’s performance.
Submitted by : HIMANSHU SHANGARI
Registration Number : 2224113
Submitted To : Mrs . SAVITHA N
(MA, MPHIL)
(ASSISTANT PROFESSOR)
Class : 2BBA(H)-A
Subject Name : Macroeconomics
Subject Code : BBA233
Date of Submission : 1 st February 2023
Department Name : School of Business and Management
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CONTENTS
1) INTRODUCTION
2) VARIOUS MACROECONOMIC VARIABLES
3) TYPES OF COUNTRIES
4)
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INTRODUCTION
Macroeconomics is the branch of economics that studies an economy's overall behaviour and
performance. It is concerned with the aggregate changes in the economy, such as
unemployment, growth rate, GDP, and inflation. Furthermore, macroeconomists create
models that explain the relationships between these variables.
GDP : Gross domestic product (GDP) is a standard measure of the value added created by a
country's production of goods and services over a given time period.
INFLATION : Inflation is the rate at which prices rise over a given time period.
CPI : Consumer price index (CPI) is a weighted average of the prices of a representative
market basket of goods and services that represents consumption patterns over a specified
time period.
NOMINAL GDP : Nominal GDP is the market value of the final production of goods and
services within a country in a given period using current year's prices.
REAL GDP : Real GDP is an inflation-adjusted calculation that examines the rate of
production of all commodities and services in a country over a given year.
GDP DEFLATOR : The GDP deflator, also known as the implicit price deflator, is used to
calculate inflation. It is used to calculate the prices of new domestically produced final goods
and services in a country over the course of a year.
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VARIOUS MACROECONOMIC VARIABLES
1. GDP:
GDP = C + I + G + (X-M)
C= Consumption Expenditure by Households
I= Investment Expenditure
G= Government Expenditure on goods and services
X= Exports
M= Imports
2. NATIONAL INCOME :
NATIONAL INCOME = Total Rent + Total Wages + Total Interest + Total
Profit + NFIA
3. GDP DEFLATOR :
GDP DEFLATOR = Nominal GDP/Real GDP x 100
4. CONSUMER PRICE INDEX :
Consumer price index (CPI) = [Cost of the basket in the current year/Cost of the
basket in the base year] x 100
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TYPES OF COUNTRIES
According the WORLD BANK the countries are classified under 3 categories :
1. Developed
2. Developing
3. Under developed
1. Developed country, also known as an industrialised country, has a mature and
advanced economic system, as measured by GDP and/or average income per
resident. Advanced technological infrastructure and a diverse industrial and
service sector characterise developed countries.
2. Developing country, also known as a less developed country or emerging
market, has a lower GDP than developed countries and a less grown and
advanced economy.
3. Under developed country , a country that is financially less developed than
the others, with little industry and little money spent on education, health care.
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