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Fundamentals of Macroeconomics Paper

Essay by   •  December 19, 2012  •  Research Paper  •  740 Words (3 Pages)  •  1,871 Views

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Desires and wants help represents a part of what economics stands for and the way people governors themselves in society. In today's society the way a person lives helps the economy decides on the product of things that are produced for consumer's way of living.

To help understand some of the fundamentals of macroeconomics these definition will give a clearer example of what macroeconomics stands for.

Gross domestic product (GDP) let you know the about the total market value of all products of good that have been produced in a year's time. The real (GDP) will state the price of all the total goods that have been produced in that given year. Nominal (GDP) things that are not adjusted for inflation but a price will be figured. Unemployment rate shows the total work force that is not working at any given time. Inflation rate describes how prices are easily calculated and in changed in a matter of time. Interest rate is experience by all folk it is the given amount calculated on the price for the use of using someone else money.

Purchasing of groceries, massive layoff of employees and decrease in taxes are economic activities that go on daily in the world. As stated "The quantity of goods, services, and usable resources depends on technology and human action (Colander, 2010, p. 5)." Without the purchasing of different products or spending, there will be no employees of taxes to increase or decrease.

The purchasing of groceries is a major part of the economic and three parts are affected. Government needs to know the type of products that families are using in order to produce. The government needs to know the demand of goods that are needed, because the higher of demands of goods the government is affected by higher prices which makes for more tax revenues. When products are produced that families are not in need of can cause for selling those goods at a minimum price and this puts a higher demand on products that are needed and not produced as fast. Government interacts in a larger part of what, for whom, and how decisions are made in the economy.

The Massive layoff of employees affect the government, households, and business because when a person loss his or her employment this cause for a drop in the economy. The purchase of goods is put at a minimum on what that person would purchase on a regular base, this cause for a drop in tax revenue because spending has been reduced. When there is a massive layoff the government has to put more into unemployment by paying out more unemployment claims. Massive layoffs of workers causes for no taxes being collected on goods that would have been purchased.

Decrease in taxes affects the government, households and business; with the decrease in taxes it gives consumer more money for the household. With the decrease in taxes it increases the consumer disposable income. The decrease in taxes increase

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