Macroeconomic. South Korea and United States Macroeconomics (Essay Sample)
It discusses DISTINCT ECONOMIC FACTORS between the United States and South Korea that may affect AutoEdge’s long-term financial performance. macroeconomic factors taken into consideration include the gross domestic product (GDP), unemployment, interest rates, and inflation for both the United States and South Koreasource..
South Korea and United States Macroeconomics
Due to increased competition, high cost of labor, and American regulations, the AutoEdge decided in 2005 to operate with a well-known South Korea factory by outsourcing its manufacturing. The outsourcing aimed to maintain a competitive advantage against the growing auto part supply industry. For the next five years, this decision would prove advantageous to AutoEdge. The company is now facing the decision to either relocate back to the US or maintain its operations in South Korea. With AutoEdge contemplating the future location of their manufacturing, it is necessary to consider and compare several factors in South Korea and the US before making the decision. The four influential indicators include interest rate, unemployment rate, inflation rate and GDP.
Gross Domestic Product (GDP)
GDP alludes to the market value or total monetary of all final products of a given country at a given time (GDP, 2020). When discussing GDP, several measurements are included in determining the GDP of a country. Nominal and Real GDP are calculated and are measured by the GDP growth rate and GDP per capita. Nominal GDP is determined by measuring the raw data. In contrast, Real GDP factors in the inflation impact and compares the output of a country from year to year, providing comparisons over periods.
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