Inflation, the steady increase in the general price level of goods and services over time, is a persistent concern in economics. While moderate inflation is considered a sign of a healthy economy, excessive and uncontrollable inflation can have detrimental effects on economic stability. This economics essay delves into supply and demand, macroeconomics, money, and unemployment.
Supply and Demand:
Supply and demand are two very important economic concepts. Regardless of the kind of market, it is argued that factors affecting the two lead to the determination of the price. Supply is the quantity of a product or service available within the market in question while demand refers to the quantity of the good or service that is demanded within an existing market.
Macroeconomics is a sub-field of economics. This sub-field concerns itself with aggregates within the economy. There are many macroeconomic indicators. Among the most notable are: gross domestic product (GDP), the rate or level of unemployment, inflation, national income, retail volumes, consumer credit, and the consumer price index.
Unlike microeconomics which concentrates itself on operations of single entities within different industries macroeconomics concerns itself with the total performance of the entire economy.
Money is generally defined as anything that is generally accepted for payment of goods and services. The main forms of money are bank notes and coins. The main functions are as a unit of account, a store of value, and a medium of exchange. It is also used globally at occasional times as a means of deferred payment.
Most forms of money exist as fiat money. The main characteristic of fiat money is that it is valueless when it exists in its natural or physical condition.
The unemployment rate is defined as the number of registered people above the age of 18 who are unemployed as compared to the total labor force. Thus a huge unemployment rate means that few people are in productive activities, which results in lower GDP thus leading to lower consumption.
There are many forms of unemployment. The main differences are as a result of the factors that cause the unemployment. Among the forms of unemployment are seasonal, frictional natural as well as industrial unemployment.