Explain The Fundamentals Of Macroeconomics

Fundamentals of Macroeconomics
ECO/372
November 10, 2014
Kathleen Byrne
Fundamentals of Macroeconomics
Macroeconomics is a term that is widely known but can be very intimidating when trying to become versed in this subject. There are several terms and concepts that need to be learned in order to begin to grasp the complexity of this topic. Massive layoffs of employees, decreases in taxes and the purchasing of groceries have many effects on the economy. In fact these economic activities contribute to the fluctuations in the economy. These economic activities cause fluctuations in the economy which affect government, households, and businesses.
Macroeconomics and GDP
In order to understand what macroeconomics is it is important to first
Households are hit very hard by a massive layoff. The household loses that income that they were depending on to provide food and shelter. They may have unemployment but that is only a percentage of what their income was. As a way to compensate for the decrease in income the household spends less by buying only necessities. Businesses suffer from a massive layoff because households cannot buy as much as they were so sales tend to go down, potentially causing these businesses to lay off employees as
When the cost of groceries is high due to things like inflation households are not able to purchase as many goods as before because their money does not go as far. When prices of groceries is down households are able to purchase more because their money goes farther. From experience the cost of groceries has significantly increased from when I was a child. I used to go to the store with my mother and we would get a cart full of groceries for about $300.00. When I go to the store we spend about that much and get about half a cart full of