“Recap” on terms from International Economy in English

You have had IØ and have learned some things about the overall economy of a country and how the
economy works within a circuit. You have learned something about GDP (BNP). GDP shows the growth or
decline of the economy, and you can use terms such as boom and recession - some even talk about
depression. You have also learned something about microeconomics (income, consumer behavior, budget
etc.) and in IØ you have included supply and demand in a market.

All of this was used in your resent exam 😊

This is a new class, and you all must come to terms with what you have learned in IØ so fare.

The assignment today is reading the following article from CNBC October 25, 2023: “The economy probably
showed gangbuster growth in the third quarter. But will it last?”, an article that uses IØ-terms in analyzing
the US economy. https://www.cnbc.com/2023/10/25/the-economy-probably-showed-gangbuster-growth-
in-the-third-quarter-but-will-it-last.html

Some important figures (samfundsøkonomiske mål) to have in mind when measuring the economy of a
country are:

 GDP growth rate (BNP vækst)

 Unemployment (arbejdsløshed)
 Balance of Payment (betalingsbalance)
 Inflation rate (inflation)
 State budget or public debt (statsbudgettet eller statsgæld)
 Inequality (ulighed)
 Environmental factors (miljø).

Read the article and work in your study groups whit the following questions:

1. Why are we (in Denmark) interested in the US economy? Denmark is interested in the US economy
due to its global economic significance, trade relations, and the impact of US economic trends on
the international financial markets and the Danish economy. And they buy a lot of medicine supply
from us which improves our GDP.
2. What is the “goal” for the GDP when measuring growth? USA and Denmark both measure GDP
growth to boost their economies, create jobs, and enhance living standards.
3. A 4.7% growth - why is this a “gangbuster growth”? A 4.7% GDP growth is considered "gangbuster
growth" because it signifies a strong and substantial economic expansion, leading to more jobs,
increased incomes, and improved living standards.
4. Why are the economists more focused on looking forward than looking at the actual result of the
GDP growth? Economists focus on the future more than past GDP growth because they aim to
guide proactive policies and manage economic risks for long-term stability and growth.
5. Consumer spending is important in the US, why does consumer spending influence GDP? Consumer
spending is vital for the US economy and influences GDP because it drives demand, creates jobs,
boosts business confidence, and generates tax revenue, all of which contribute to economic
growth.
6. Why is the interest rate an issue when looking at the consumers? Interest rates matter to
consumers because they influence the affordability of loans, impacting their ability to make major
purchases like homes and cars.
7. Explain why employment and consumer spendings are correlated. Employment and consumer
spending are correlated because when more people are employed and have steady incomes, they
have the financial means to spend on goods and services, which, in turn, drives economic growth.
8. Explain why the inflation rate is a problem for the US economy. Because the GDP is too high which
is bad for the country’s economy
9. How is FEDs (Central Bank) fighting inflation – and why are they talking about an “energizer
bunny”? They want the inflation interest rates to increase.
10. What is the dilemma of the market? The market dilemma is the challenge of balancing supply and
demand to determine prices and allocate resources efficiently.