Principles of Macroeconomics
Individual: Fundamentals of Macroeconomics Paper
Gross Domestic Product (GDP): Market value of all goods that are produced in a given time period.
Real GDP: The measurement of GDP at constant prices.
Nominal GDP: The measurement of GDP at current prices.
Unemployment Rate: The measurement of knowing how many people are unemployed in the country versus employed people.
Inflation Rate: The measurement of increase in prices over a period of time.
Interest Rate: The dollar amount that is paid yearly on a loan by the borrower.
The three activities affect each entity different, looking at how purchasing groceries would affect the government only if there was some sort of inflation going on. Then the government would raise taxes on goods in which will raise the prices of goods. As for households it can affect them in a negative way or a ...view middle of the document...
Massive layoff of employees will affect a household in a tremendous way; it would put the household in a very bad situation. If the people in the household does not have a means of steady income coming in it will affect them in a very negative way. Massive layoff of employees affecting the government would actually be low and not cause that much damage. Majority of the time it is the government that is doing something that causes for the layoffs. The government usually implements some kind of regulations or policies that raises taxes on business and small business. Which in turn causes the business to lay off workers, in the state of Illinois the tax on businesses are so high majority of people are moving their home offices to other states so they can get a tax cut. If they are paying out too much money in taxes and not having enough to pay employees which causes the massive layoff of employees.
Decrease in taxes is good for everyone, but it affects all three entities differently. Decrease in taxes as far for purchasing of groceries, it makes a lot easier and affordable because the cost of the goods will not cost as much thus leaving more money for the household. Massive layoff of employees would not be an issue because the government is giving out tax cuts to business and in turn leaving them with more money. This helps the business because they will not have to find ways to cut spending that will lead to lose of jobs. The economy has to be in a great position to make sure everything is running smoothly so a family can purchase groceries without breaking the bank and business not having to do massive layoffs.
These layoffs come because the business is spending too much on taxes and because there is no money to stimulate the economy the goods the business offer is being bought. In this year’s election Obama is constantly talking about providing tax cuts to the middle, he is doing this because the tax payers that are actually making enough to pay income tax is paying out way too much money. The less money that is being paid out versus being taken in keeps people being able to purchase groceries and eliminates layoff.