Interest rate is the price the borrower pays for the use of funds (whether loan or deposit) as a percentage rate, of the amount of borrowing, calculated for a certain period of time: year, month, etc. From the standpoint of the theory of money, interest rate is the price of money as a store of value. Interest rates depend on the amount of money in circulation, on demand for borrowed funds, on government policy, on the risk assessing of not returning the loan lender, on the loan period and national currency.
Inflation rate is the average rate of price change of goods and services on a base period, used as an indicator of inflation and expressed in percentage per year.
The opposite process of inflation is deflation characterized by the fall of prices (negative growth). In a modern economy it is a rare and short-term phenomenon, usually is seasonal. For example, grain prices after harvest are usually reduced.
Unemployment rate is the percentage of the total number of unemployed civilian labor force. For each country there are official data on the permissible size for economic growth in unemployment. Unemployment rate changes under the influence of the cyclical nature of economic development. Typically, the rise in unemployment is accompanied by a depreciation of the currency.
Gross domestic product is the total value of all goods and services produced within a year in a country without dividing the resources used in their production, on imports and domestic. For most of the world GDP and GNP differ slightly and are often considered interchangeable.
Most use two methods of calculating GDP:
1. By adding up all incomes in the economy: wages, interest on capital, profits and rents;
2. By summing all expenditures: consumption, investment, government procurement of goods
Theoretically, the results of calculations in both cases must be the same as the cost per participant of economic relations are always income for another.
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