ValueMags is a magazine distribution and marketing company that also issues magazine subscriptions. They are seeking magazines that will expand their offerings to their business readers and finance savvy readers. The company is especially interested in picking up magazines that are specialized in macroeconomics. ValueMags researchers have recognized a pattern in financial knowledge amongst Americans. ValueMags researchers have found that little to no Americans know what they are doing when they are investing their money and how current macroeconomic situations may influence their money that they have likely invested for their retirement.
Macroeconomics is the large-scale measure of general economic factors (total value of output). To measure total output in dollars, we add up the values of the many different goods and services produced within an economy. The majority of macroeconomic issues are long-run or short-term fluctuations (government policy is relevant for both). Some key macroeconomic factors include national income, total output (nation product), total unemployment, price levels, interest rates, exchange rates, and trade flows.
Many Americans don’t understand the importance of what national product is and what the difference between nominal and real national income is. Nominal and real are reoccurring words that come up in finance and economics but few understand what they mean explains ValueMags researchers. National product is the aggregate market value of all final goods and services produced by the factors of production of a country (land, capital, labour), minus depreciation. The difference between nominal and real income is that nominal income is calculated with current prices whereas real income is calculated with base-period prices.
It is not only important for Americans to understand how to grow their money and investments but also how economic growth can heavy impact their investments. Economic growth is an increase in the value of the amount of goods and services produced per person in a country over a period of time. For the most part, individuals would want there to be economic growth because it pushes their money to grow too.
For more macroeconomic basics and investment basics, stay tuned for magazine issues on the ValueMags official webpage.
- Why is the economy faced with short-term and long-term fluctuations? What do they consist of?
- Shot-term fluctuations occur because businesses are contracting therefore businesses are having ups and downs in their business activities whereas long-term rising trends occur because output, income, and prices are rising. In addition, inflation will be fairly static or rising to match the rising prices and salaries.