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Given the topics this week, I have chosen the United States as my country. The health of the United States economy is ever changing by the day it seems. Inflation rates are on the rise while interest rates are right behind it. All the while, unemployment is at a staggering low of 3.7%. When you look at the U.S.'s nominal and real GDP, we can see that taking the nominal GDP will produce a more true figure because it takes on the actual price of products, however, it doesn't adjust for inflation. If there is a decrease in taxes, this will ultimately make the GDP grow to great heights simply because there would be more disposable income. If there is more disposable income, this will increase the circulation of "moneys" into the market and inflation will continue to run. To mitigate this rise, the Federal Reserve would then increase interest rates in hopes of locking disposable income up for a while until the rate of spending cools down.

When inflation begins to run away from us, retail sales begin to go through the roof. This is great for business owners but really scary for the average consumer. For those who don't get raises on a regular basis, a rise in prices may stop consumers from purchasing the necessities to their everyday life. Markets like the Standard and Poor's 500, (S&P 500) begin to actually benefit from the inflation rate due to the raise in products. Therefore the raise in the stock of these products begin to do well also.