April 7, 2014
ECO / 372
Fundamentals of Macroeconomics
Fundamentals of Macroeconomics
Gross domestic product (GDP)
Is the value of the market where all official goods and services are produced inside of a country for a year or a given time period. This is also a rating for a country’s standard of living. There are three ways to figure out this measure production approach, income approach, or expenditure approach.
This is a measure of value for an economic output which is adjusted for price changes. This measure also gives us an index for quantity of total output. Real GDP will also account to changes in price ...view middle of the document...
Each and every household, government entity, and business will be able to see the importance of macroeconomics. Our daily lives and our daily routines play a role in macroeconomics even if we do not think it does. Learning how things work and educating ourselves around economics will help to better our lives and see how things really work and operate. Our United States Economy can also be divided into these three groups of business, households, and the government. Similarly, these groups are all interconnected. Businesses supply the goods and services, households supply the labor to produce these goods and services, and while the government is in the middle as a tax collector and sets rules for the business to also build a stable and safe environment.
Purchasing groceries will in the end affect every household along with it being a priority and is done usually weekly or monthly. This grocery shopping will have an effect on the government because depending on our economy and if things are stable will help to determine how much a family would be able to spend at their grocery stores. When there is a chance of inflation some prices could be higher for the average consumer which could cause them to spend less while they are out shopping. Households are affected by supply that stores carry and having enough for everyone. The government could be affected if some households could not afford and then needs government assistance. Businesses are directed by family member’s spending money and keeping competitive prices against their competitors. The purchasing of groceries allows for families to have food and necessities in their households and is a necessity; families will always budget to survive. Business will then have a constant flow of goods and services being sold and can adjust prices by the supply and demand needed and competitors. The governments can also higher or lower taxes on these products to get people to buy more or be more conservative with their funds.
Massive layoffs of employment in our economy would affect the government, households, and businesses in many ways but one being the ability to produce and buy goods and services. When there is a business that is laying off people it usually means there is cut in the demand for their goods or services that they offer. This also means that the families that are affected will have less income to spend on luxury items and will have to be on a budget. After being with a company for so long this could be very hard for someone to look and find another job. The government is affected by this because this means there will be less tax income and not only from the business but also from the...