Fundamentals of Macroeconomics
September 17, 14
Money is what makes the world go around and money is what controls our society and government. Economists do numerous researches to understand how our economy works and how they play an active role in our government. Certain activities that us consumers deem normal play an active role with the government and businesses. And the activities government and businesses do, affect us consumers as well. It’s an economic cycle that affects everyone.
Purchasing groceries, for example, affects the household, the government, and the businesses. Purchasing groceries depends on the income and the size of the household. If the household is more than five people, the grocery purchase may be big to ensure that everyone in the house will be well fed. The businesses benefit from the sale that they are retrieving. The larger the household, the more income the business attains. However, it also reflects on the prices. If the prices of the market go up, the household may cut back on purchasing several goods from the business due to the economic pike. This is where the government comes in. If the purchases slow down, the economic growth will go down.
The massive layoff on employees hurt many businesses, households, as well as the government. The businesses tend to hurt because they are short staffed and can often not meet the requirement of the supply and demand for the consumers. With that, they do not have the funds to hire more employees to help with the demand and it can hurt the businesses. The government will have to start paying for unemployment to those who were laid off and are unable to find a job. For the past several years, there have been many layoffs in our country, and our economy began to go downward. Many people were left without jobs and were given severance pay for a number of months. However, some who were laid off were unable to find another job and it...