The Impact of Increasing Import Prices With Respect to Economic Research Paper

The Impact of Increasing Import Prices With Respect to Economic Variables - Research Paper Example At current market prices, the GDP is at its highest during the year 2004 whereas it is at its lowest during the year 2001. During 2004, the US economy experienced consistent growth with almost over 4%, on average, growth rates during each quarter. This was mainly due to the strong demand created through business spending, the sector which witnessed almost double-digit growth during the period whereas consumer spending was increasing too i.e. it showed an improvement of more than 4% during the year. Similarly, new jobs were created and the employment level fell sharply which not only stimulated spending but also increased the income level of individuals. Similarly, an increase in consumer spending resultantly caused an increase in the business sector when the business expansion was witnessed as it has been discussed earlier. However, what is also important to discuss, here is the fact that inflation during this period was at high level i.e. the current price level was high therefore t he GDP at current market prices was at its highest? Similarly, in the year 2001, GDP at current market prices was lowest because the US was hit by the terrorist attacks on 9/11 which significantly damaged its economy as most of its stock exchanges closed down for a substantial period of time. Secondly, the price level was relatively at a lower level as compared to the base year i.e. 2001 was just one year after the base year of 2000 therefore it was at the lowest level since at the base price GDP growth rate was around 6 – 7% whereas it showed negative growth from 2000 to 2001 at current market price level.