Economics is the study of how people use resources to produce valuable goods and services and how these goods and services are distributed among individuals in a society. Economics is divided into two main branches: microeconomics, which deals with individual consumers and firms, and macroeconomics, which looks at aggregate economic activity.
Economics focus on the production, distribution, and consumption of goods and services. It attempts to explain how economies work and how economic agents interact with each other. The fundamental concepts of economics include scarcity, opportunity cost, supply and demand, productivity, utility, and economic efficiency.
Inflation, unemployment, and economic growth are some of the most important issues in macroeconomics. Economics is a complex subject, but this guide will provide you with a basic understanding of the factors that impact micro and macro financials.
The unemployment rate is the percentage of a country’s labor force that is unemployed but seeking employment. The unemployment rate is published each month by the Bureau of Labor Statistics (BLS) in the nonfarm payrolls report. The numerator of the unemployment rate is the number of unemployed persons, while the denominator is the number of people in the workforce.
How might the unemployment rate overstate the amount of joblessness?
The unemployment rate may overstate the amount of joblessness because someone who is considered unemployed and is not actively trying to find work will be counted. Also, unreported legal employment and unreported illegal employment may be included in the unemployment rate.
Which economic indicator measures inflation?
The consumer price index (CPI) is a standard measure of consumer goods price inflation. CPI measures the average monthly change for a basket of goods and services bought by consumers.
Components of CPI include food, transportation, shelter, utilities, clothing, medical care, and entertainment. As the cost of the basket of goods in the index increases, CPI increases. Inflation is the percentage change in the CPI from one period to the next.