Case Study

This week the focus changes from the microeconomic factors that affect management decisions, i.e., market structures, costs, and pricing strategies to the larger events found in macroeconomics such as level of income, employment, and output.

The framework utilized to provide an overall measurement of economic activity is called the Gross Domestic Product (GDP).

1 – Review the most current GDP measurement for the U.S. and one other country. Identify any differences between the two measurements and explain why the differences exist, i.e., the components of the measurements are different.

Part of macroeconomics is the spending behavior of individuals and what factors influence this behavior. One factor that significantly influences individual spending is consumer credit.  Following the subprime market debacle financial institutions have increased their requirements for credit: referred to as tightening credit. Based on what has happened with consumer credit in the past few years complete the following task

2 – How has the tightening of consumer credited effected individual spending and in turn the U.S. economy? Has this strategy by the financial institutions helped our economic recovery?

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