We use cookies to give you the best experience possible. By continuing we’ll assume you’re on board with our cookie policy

Fundamentals of Macroeconomics Essay Sample

The whole doc is available only for registered users OPEN DOC

Get Full Essay

Get access to this section to get all the help you need with your essay and educational goals.

Get Access

Fundamentals of Macroeconomics Essay Sample

The following paper is a description of how three different activities affect the government, personal households, and businesses. The desire of logic in this spectacular economy is always participating in the following systemization throughout those three sectors. Below is a diagram showing the way the economic system flows from one sector to another. Generally the flow goes through the three sectors and redistributes income repeatedly. As seen, the government is in the middle of the entire process acting as a sort of mediator and overseer with both businesses and households contributing to the process. We cannot say necessarily that the government is completely “in charge” because in turn, the households decide who governs them because the United States is a democracy.

Purchasing of groceries
The first of three economic activities that are taken into consideration is the purchasing of groceries. When purchasing groceries households are the main “spender.” The reality of consumption opens a space to display the construction of the nation. The household consumes what the businesses produce, increase a businesses income and also increases the need for a higher income in the households. Both the households and the businesses pay taxes the government on the purchases and ends the simple model of how purchasing of groceries affects the three economical actives. Massive layoff of employees

On to a more complicated matter: layoffs. As a little girl I remember wondering why my father had to be laid off and I did not think it fair at all. However, as I matured I understood that businesses function much like households in that they have a budget just like my family did. Because of America’s current unhealthy economy even few layoffs have a negative ripple affect on businesses and our government. For example, families will no longer be buying that new car, or going out to dinner every weekend, and so forth. On the bright side layoffs teach families the need to save and help households pull together in hard times. In turn layoffs bring down business sales and lower the need for production because there is not as much consumption. With business sales down and some businesses closing (even some major retailers) the government in turn does not receive their tax revenue. In the case of layoffs, the circle is quite the vicious one. Decrease in taxes

A decrease in taxes improves the economy by giving individuals additional buying power and higher shopper confidence (which is great for us woman). More shoppers mean that businesses have financial gain that result in additional jobs, additional business investment in additional economical technologies, and ultimately higher gross domestic product growth. Lower taxes, have the alternative result of what the majority would assume because the tax cut encourages individuals to shop for additional merchandise and services, stimulating the economy, and making additional jobs. Less taxes going out to the government’s proverbial wallet and additional money staying within the pockets of average taxpayers as a matter of course features a positive result on the general economy and permits a spirited free democracy to blossom and grow. Lower tax rates are a classic case of “less is more” and any well-groomed government should discover ways to scale back taxes. In the end it is our “cash.” In conclusion

As seen in the figure above our economy goes in a circle. Sometimes this circle is a happy circle comparable to the sun that gives warmth and life. At other time (such as our economy is now) it is a brutal circle; when one sector is not doing well the other two sectors begin to fail as well.


Colander, D. C. (2010). Macroeconomics (8th ed.). Boston, MA: McGraw-Hill/Irwin.

We can write a custom essay

According to Your Specific Requirements

Order an essay

You May Also Find These Documents Helpful

Unemployment in a Macroeconomic Context

Unemployment is a macroeconomic phenomenon that directly affects an economy, its people and the society as a whole. The rise of unemployment in many developed countries has kept it in the limelight of macroeconomic research, and the underlying causes behind the existence of unemployment remain contentious. Given this divergence, the solutions presented by scholars and experts vary widely in scope and prescribed remedies. However, there...

Macroeconomics in England

Introduction England has been experiencing a period of growth for the last thirty years.  Since the country put in place a framework to deal with the escalating rate of inflation and interest rates through the inflation targeting regime in the 1990, there has been improved performance of the economy and a great control of the rate of inflation. With the wave of globalization, there have...

Macroeconomics Case Study

Classical economists and Keynesian revolution             Classical economists were regarded as the first to bring modern economic into action, the classical economists were a number and included economists like Adam Smith, and John Stuart among others, they believed in economic growth and development and it was at a time when the industrial revolution was bringing changes to the society that they came up with their...

Keynes and Hayek

John Maynard Keynes was an economist whose ideas have greatly affected the theory and practice of modern macroeconomics, and informed the economic policies of governments. He built on and greatly advanced earlier work on the causes of business cycles, and is widely considered to be one of the founders of modern macroeconomics and the most influential economist of the 20th century. His ideas are the...

Frictional Unemployment

Frictional unemployment also known as search unemployment distinguishes the time period between jobs when a worker is searching for or transitioning from one occupation to the next. Unemployment that exits in a fast growing economy with an expanding mobile, elastic and adaptable labor force of having many different options. With this type of structure can be beneficial to workers because it allows them to seek...

Get Access To The Full Essay
Materials Daily
100,000+ Subjects
2000+ Topics
Free Plagiarism
All Materials
are Cataloged Well

Sorry, but copying text is forbidden on this website. If you need this or any other sample, we can send it to you via email.

By clicking "SEND", you agree to our terms of service and privacy policy. We'll occasionally send you account related and promo emails.
Sorry, but only registered users have full access

How about getting this access

Become a member

Your Answer Is Very Helpful For Us
Thank You A Lot!


Emma Taylor


Hi there!
Would you like to get such a paper?
How about getting a customized one?

Can't find What you were Looking for?

Get access to our huge, continuously updated knowledge base

The next update will be in:
14 : 59 : 59
Become a Member