Fundamentals of Macroeconomics
By Stephanie Casillas
June 12, 2015
Macroeconomics is the study of the economy as a whole. In this summary we will discuss how a few economic activities, such as purchasing groceries, massive layoffs, and decreases in taxes affects each activity and how it relates to each other, and the economy as a whole.
The food industry is one of the largest industries that are involved in our economy today. When consumers buy groceries, it helps with maintaining jobs in the economy, as well as tax revenue for some states, and the government. The better the prices that are on food, the better off the households can afford to buy more, which in turn provides more money for labor, and taxation.
Massive layoffs can affect many people in many different areas. If a household experiences a layoff, than they will have a decrease in wages, and thus in turn has less money to buy groceries. This means that a family might have to purchase fewer ...view middle of the document...
When a household cannot purchase items, which have gotten more expensive to buy for a business or a corporation, due to other elements that are affecting the economy, then the business losses profits. When the business than loses profits, the next issue is less tax revenue for states, and government.
The next issue to discuss is the decrease in tax revenue. This is a biggie for the community you live in. This is how your community sustains itself. If a business is struggling to maintain and is not making huge profits, than city, state, and federal government can be affected by low tax revenue. This means that your city might not have enough revenue to create local jobs, or take care of things that the city might need. The state itself might suffer as a whole; the states infrastructure might suffer, such as jobs, roads, and state programs such as Medicaid. I know Medicaid is federally funded, but the state also plays a major role in how it is run. The federal government can also be affected, because they rely on taxes from households and the state. The less each household makes, than the less money that is in the state, thus in turn the less tax revenue, the federal government gets from each state.
So as you can see, all of the activities listed above, correlate with one another in a manner that they all rely on each other to be fair, and successful. For example, as a corporation, you want to ensure that you make a profit, and enough to cover all your taxes. This being said, you also want to ensure that your make enough to cover all your labor expenses, because without jobs people do not have money to spend at your business. This in turn means that if they have no job or no money, than you have no customers. This affects everything in your community that taxes help with. If you community is not receiving taxes this makes it even harder, because there is less money in education, and job creation. One issue I see today, is that there is no money in education and job creation, and the jobs today that pay, are hard to get and few and far between. The economy is in the shape it is today, because of corporation greed. We are in this together, and if things do not get back on track then, there really is no hope for the future of our economy.