I have chosen real GNP over GDP as I feel that real GNP gives a more accurate and realistic view of the nations income in comparison to others. This will help in comparing the UK and US as it will take into account the trading that each country does with the rest of the world and will therefore give us a picture of how strong an economy it is.
Unemployment measures the amount of a nation's population that are without jobs. This is a good economic indicator as it allows us to make various assumptions about the state of the economy. For example if there is low unemployment we generally assume that there is high inflation and visa versa. Equally we can assume that high levels of unemployment mean that a nation is inefficient, as it is not using all of its" potential workforce. I feel that unemployment is a good economic indicator as it gives us an idea of the nation's labour force and can be used to look at other areas of the economy, which will be helpful in predicting an outlook of a nation's economy.
Inflation is a rise in the price level . This is where the price of goods and service rises due to various economic factors such as changes in government policy. Inflation is a good economic indicator, as like unemployment it can be used to make assumptions about other areas f the economy. For example, printing money to fill a large deficit is a source of inflation , this could be because a country is trying to get itself out of debt.
So there are three dimensions of macroeconomic performance that I feel would be important in assessing a countries macroeconomic performance. I will now go onto explain how one could use these to assess the likely economic performance of the US and UK between the years 2003-2006 and 2030-2040.
The European Union (EU) is growing in strength year by year and over the next three to four decades it will increase its economic power. The recent introduction of the Euro, and the growing number of countries applying to join (e.