What Are The Fundamentals Of Macroeconomics

Fundamentals of Macroeconomics Paper
Alyssa Chun
ECO/372
February 12, 2015
Dr. Christian Teeter

Fundamentals of Macroeconomics Paper There are many economic activities that have an apparent affect on businesses, households, and the government. Some of these various financial affairs include tax reductions, vast employee layoffs, and purchasing groceries. For each activity there is a flow of resources that go from one entity to another. Although it may seem as if these activities are not directly related, in many ways they can have an affect on each other as well as on each entity. Acknowledging the influence an economic activity can have on a community can be beneficial for an individual, family, business, or political authority,
Abrupt unemployment for any individual is, as one can imagine, very hard on a household. It can cause a household to be behind on bills, cut their resources for medical needs, and cause on overall impact on their standard way of living (Simpson, n.d.). High unemployment also affects the household of those still employed because they will have to pay more payroll taxes to help fund the unemployment benefits for those who qualify. Therefore, the government is affected because they have to raise payroll taxes in order to compensate. Though as stated before if the country falls into a recession, another tactic would be to then lower the taxes once again. Prolonged unemployment can lead to a loss in skill and motivation, which can affect a business when they rehire a person who has been previously laid off. There is a higher risk of employee pessimism or skepticism in the value of investing time and effort in training to gain a long-term position (Simpson, nd.) once a person experiences being laid
The purchasing of groceries is something that all people in a household need to sustain a healthy and affordable diet. Eating out all the time can be costly and often unhealthy, so the price and convenience of groceries from the local market, greatly affects any household. Businesses then need to have prime locations and provide consumers with quality food for affordable prices. Many people are turning to stores like Trader Joe’s to find cheaper and healthier options. The government determines the cost of taxes on food, as well as approves whether or not a product is eligible to be sold on the market. There are food and health regulations that have become stricter over the years that try to keep unhealthy products off the shelves. Currently the government is considering a new higher tax on soda, the Obesity Action Coalition (Friedman, n.d.). The idea is to decline soda purchases that in turn can help our country’s issues with obesity, which directly affects both households and businesses. Economic activities such as buying groceries, decreases in taxes, and immense employee layoffs, on some level have an impact on the government, businesses, and households in positive and negative ways. Each entity also has affects that intertwine with one another. All economic activities large or small can make a difference to the individual, to society, or to