Fundamentals of Macroeconomics
Macroeconomics is the study of the economy as whole (Colander, 2013, p. 5). It considers the problems of inflation; unemployment, business cycles, and growth (Colander, 2013, p. 5). Inflation is a general increase in prices and fall in the purchasing value of money. Unemployment rate refers to the number of people actively looking for a job but unable to find one (Colander, 2013, p. 5). Business cycle is a cycle or series of cycles of economic expansion and contraction (Colander, 2013, p. 5). Economist analyzes each of these factors to determine the state of the economy. We live in an environment that is constantly changing. There are a number of factors, behaviors and trends that affect the economy. One event can caused a domino effect. This paper will outline how scenarios such as purchasing groceries, massive layoffs, and a decrease in taxes affects government, households, and businesses.
PURCHASING GROCERIES
As simple as it seems, the task of buying groceries can be very difficult during harsh economic times. During these times, families must decide what foods are needed and what items can they do without. Consumers may opt to purchase foods that can make multiple meals such as rice or chicken. When the economy is struggling, consumers become more cost conscience and are more likely to monitor their spending habits.
This can also have a negative effect on the government, and business. A large percentage of food sold in the United States is imported from other countries. For examples, bananas are widely produced in countries such as Columbia, Costa Rica, and Ecuador. If the sales of bananas are reduced significantly, it could spark changes in the entire global economic system and trade agreements. The purchase of grocery effect government is other ways as well. Sales tax is attached to sale or groceries. When consumers make