Eco 372 Week 2 Paper
Fundamentals of Macroeconomics Paper
Kimberly Lincoln
ECO/372
June 29, 2015
Dr. Bob Larkin
Fundamentals of Macroeconomics Paper
In this paper we will discuss the following common macroeconomic activities: purchasing of groceries, massive layoff of employees, and decrease in taxes. We will look closely at how each of these activities affects government, households, and businesses. Then take a look at the flow of resources from one entity to another according to this week’s reading, Figure 3-1 from Colander.
Purchasing of Groceries
Purchasing groceries affects the government, our households, and businesses. Everyone has to eat and most of us are lucky enough to be able to shop at our local grocery store to bring food home for our family. Grocery stores stock their shelves with food that was farmed and produced from all of the country and world. Some lands are better for farming different fruits and vegetables due to climate and environment which make it cheaper for that state to produce at a larger quantity. For this reason grocery stores place orders for food in various places where they can get the best deal and quality. Supplies and prices would not be as efficient if the United States was the source for all of our groceries. American consumers control the demand for a product and the most successful countries with a high comparative advantage rank above in the free global market. The government is affected in purchasing groceries because they have to set regulations and follow regulations that have been set by other countries. Taxes, restrictions, and bans on products are all regulated by governments. Some governments for example will ban their country from importing and exporting goods from other countries, preventing trade in the free market.
Massive Layoff of Employees
Another common macroeconomic scenario that we see often is the massive layoff of employees. Massive layoffs in a tough economy can create recessions. When the going gets tough
Kimberly Lincoln
ECO/372
June 29, 2015
Dr. Bob Larkin
Fundamentals of Macroeconomics Paper
In this paper we will discuss the following common macroeconomic activities: purchasing of groceries, massive layoff of employees, and decrease in taxes. We will look closely at how each of these activities affects government, households, and businesses. Then take a look at the flow of resources from one entity to another according to this week’s reading, Figure 3-1 from Colander.
Purchasing of Groceries
Purchasing groceries affects the government, our households, and businesses. Everyone has to eat and most of us are lucky enough to be able to shop at our local grocery store to bring food home for our family. Grocery stores stock their shelves with food that was farmed and produced from all of the country and world. Some lands are better for farming different fruits and vegetables due to climate and environment which make it cheaper for that state to produce at a larger quantity. For this reason grocery stores place orders for food in various places where they can get the best deal and quality. Supplies and prices would not be as efficient if the United States was the source for all of our groceries. American consumers control the demand for a product and the most successful countries with a high comparative advantage rank above in the free global market. The government is affected in purchasing groceries because they have to set regulations and follow regulations that have been set by other countries. Taxes, restrictions, and bans on products are all regulated by governments. Some governments for example will ban their country from importing and exporting goods from other countries, preventing trade in the free market.
Massive Layoff of Employees
Another common macroeconomic scenario that we see often is the massive layoff of employees. Massive layoffs in a tough economy can create recessions. When the going gets tough