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In this report i will present current economic thoughts and principles to our strategic planning committee. It is very important to be familiar with the basic principles of economics and the concepts of the circular flow model. This report will include the following thoughts: how economists are both scientists and policymakers and what principles society uses to allocate its scarce resources, using the circular flow model, explain the flow of money and goods in an economy, how the economy coordinates society’s independent economic actors, a country’s gross domestic product (GDP) and how it is defined and calculated, how the consumer price index (CPI) is constructed and why it is an imperfect measurement of the cost of living. 

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How economists are both scientists and policymakers and what principles society uses to allocate its scarce resources.
Economists are not only the scientist but also policymakers who address issues using
theory methods. Scientists test their ideas using data, economists develop hypotheses and build
models that can be tested using data in the same way scientists would test theirs. In our world we
decide what jobs and positions are needed and who is qualified to get that job. We need to
allocate people to specific tasks and jobs buy using created and provided resources as a help in
deciding who is best for particular position. Economists use scientific methods for creating and
testing theories about how everything works. First they develop theory, then they gather data
which they analyze, next they test the data to verify or reject created theory. Both economists and
scientist address their subjects in the same way. As a policy maker, an economist helps with
development of policies that will assist in improvement of the economy of a given country.  We
all want many things but we also have limited resources to get them. This problem is called
scarcity, it requires people to make economic decisions so they can manage the availability of
resources they require to meet their needs. We all use tradeoffs on a daily basis, deciding what is
more important for us at the moment. 
Using the circular flow model, explain the flow of money and goods in an economy.
The circular flow of income is a neoclassical economic model depicting how money flows through the economy. This model shows connections between different sectors of economy. We all go to work every day to be able to afford things that companies produce for us to buy. We can say that  household and companies are two major players in the economy. Understanding the flow characteristics is very important in determining the price of a product produced or how much person who works in production of that product should be making. 
How the economy coordinates society’s independent economic actors, a country’s gross domestic product (GDP) and how it is defined and calculated.
“Macroeconomy is a branch of the economics field that studies how the economy behaves. In macroeconomics, a variety of economy-wide phenomena is throughly examined such as inflation, price levels, rate of growth, national income, gross domestic product and changes in unemployment.” Society’s independent economic actors that interact in economic markets are households, firms and government. Our household are vital to the economy because they demand goods and services, firms employ people to produce goods and services demanded by households, and government set prices for goods and services that include taxation and incentives. Similar to circular flow model this is how economy coordinates society’s independent economic actors. 

A country’s gross domestic product (GDP) and how it is defined and calculated.

Gross domestic product is the best way to measure a country’s economy. GDP is the total value of everything produced by all the people and companies in the country. GDP includes all private and public consumption, government outlays, investments, private inventories, paid-in construction costs and the foreign balance of trade.  There are three methods by which GDP can be determined: expenditure approach, the output (or production) approach and the income approach. 
There is a formula used to calculate GDP which is:  GDP= C+G+I+NX where C is all private consumption, G is the sum of government spending, I is the sum of all the country’s investment, and NX is the nation’s total net exports (NX = Exports – Imports)
How the consumer price index (CPI) is constructed and why it is an imperfect 
measurement of the cost of living. 
Bureau of Labor and statistics produces Consumer Price Index (CPI) – the most widely
watched and used measure of the inflation or deflation rate. CPI is also used to determine the
GDP.  A consumer price index CPI measures changes in the price level of a market basket
consumer goods and services purchased by  household.  Due to consumer price index being fixed
it does not account for market changes due to introducing a new product, CPI also do not reflect
change in quality. The CPI is used by the president, Congress and Federal Reserve Board to
formulate fiscal policies based on the monthly findings and how inflation or deflation is
presented.

Economy changes every day, it is very important to do research and learn as much as
possible, so we stay of top of what is happening. It will help us succeed and expand our
knowledge.