The French Economy (graphic not included)The macroeconomics of any country will be complicated, and France is no exception. There are various factors that will give the analyst an idea of ​​how healthy a country's economy is. The first, and probably most important, factor is GDP. GDP, also known as gross domestic product, refers to a country's total output at a given time. Below is a time series of France's GDP from 1970 to 2008. As you can see French GDP never seems to be in the same place twice or, at least, has not maintained a constant course over the past 38 years. This is common when examining the GDP time series of different economies. It is clear that the economic cycles of the last four decades show that France has experienced many economic “booms” and has also gone through many recessions. Booms can be explained by looking at some macroeconomic models. Above you will see a copy of the aggregate supply and demand model. I'm using this as an example to show how GDP can be affected. You will notice that the AD1 line has moved right to AD2. This is an example of demand-pull inflation. Demand-pull inflation is caused by increased spending in the economy. Expenditure is made up of consumer spending on domestic products, investments, government spending and exports. When spending increases, the demand for products also increases, shifting the aggregate demand line to the right. When spending decreases the line shifts to the left. This is closely linked to inflation. Below is a time series of inflation in France between 1970 and 2008. In addition to demand-driven inflation, there is cost-push inflation. It works when costs increase. Instead of the demand curve shifting, this causes the supply curve to shift to the left. Companies respond to this situation by increasing prices and in doing so pass the costs on to the consumer. Obviously this has not been such a serious problem in France in recent years. Inflation fell significantly between 1982 and 1987 and has remained low since then. The last important factor to consider is the unemployment rate. Below is the time series for unemployment in France between 1970 and 2008. From the time series below you can see that unemployment levels increased in France from 1970 to 1996, apart from a collapse between 1988 and 1996. 1990.