Analayze Excel Spreadsheet on Italian Goverment Term Paper

Analayze Excel Spreadsheet on Italian Goverment - Term Paper casingIncreased production of goods and services in an economy does benefit the standards of living and well be of the citizens in nigh ways but not always. This is because gross domestic product does not give a clear answer of indwelling questions such as whether the battalion are utilization much on the wrong things, or whether people have better quality consumption or whether the savings are too little (Miles and Andrew,56). Additionally, the gross domestic product does not measure constituents of wellbeing that are not related to presidency consumption and financial income bulkyevity, unemployed time, social equality, capabilities, quality of education and many others. This paper tries to analyze the correlation coefficient relationship that exists between GDP and organization consumption, and between GDP and government bond yield. The GDP and government consumption relationship appears to be in the sense th at even though Gross Domestic Product is calculated using legion(predicate) measures, government consumption on its part is the single most vital comp acent. In most countries the government consumption exceeds 50% of the GDP while in some this could go beyond 70%. In Italy for instance, government consumption is considered to be the main statistic on which it relies while calculating the GDP. Several studies reveal that the most important relationship between GDP and government consumption is that an increase in the level of consumption results to an increase in the level of the GDP (Miles and Scott, 13). Government consumption is a broad Macro scotch element hence it is necessary to divide into several components in order to get the real picture of its correlation relationship with the GDP. The consumption of durable goods refers to nonperishable goods and goods that last for a period of more than three years, while on the other hand nondurable goods are the goods consumed for pe rishable goods or other goods that world(a)ly last for less than one year. A countrys treasure is the most impacted area within the economy when pickings about the bond commercialise (Schaefer, 65). Most economists argue that the most appropriate way in trying to understand the relationship between the bonds and the economy is to think about bet judge as being the cost of money (Taylor, 21). A stronger economy is characterized by high demand of money because greater natural process means that there is more of need for cash that can help in financing projects. Theoretically, stronger economic growth makes inflation likely. The Italy Federal reserve is more likely to fight inflation through boosting the interest rates (Miles and Andrew, 77). A projected increase in the interest rates could mean long-term rates could be expected to follow and the vice versa (Schaefer, 112). While all section within the bond market takes their cue for treasure in an ultimate way, government bonds a re seen as being the safest investment globally. The long term relationship between bond yields and macroeconomic fundamentals can break down in the short run, particularly during financial stress periods. For instance, after the 2007-08 global crises and despite the pilling up of general government debt in the USA, the United States bonds yields have been trending downwards (Schaefer, 90). On the other hand, borrowing costs in some European countries such as Spain, despite a relatively lower initial level of general debt, have continuously exceeded those of more highly indebted nations such as the UK