Fundamentals of Macroeconomics Paper
Eric R Drayton
ECO/372
June 9, 2014
Mr. Robert Freitaas, Jr.

Fundamentals of Macroeconomics Paper
Macroeconomics is a field developed to measure the economic health of the government, by using the Gross Domestic Product, and the unemployment rate along with the rise and fall of inflation. Such things as the purchasing of food for the household too Massive layoff of employees, and the Decrease in taxes all play a major role in the overall health of the country,
Purchasing of Food is a necessity need for us as humans and by purchasing food it is something that will affect every household, and is something that cannot be ignored. Purchasing of food will affect the government in that depending on the state of inflection will make the different in how much grocery a family can buy pre week are month from the local store .Inflation also may affect the over-all amount of money that the average family will purchase and may cost them to cut back on their spending because of the prices of the goods. The purchasing of grocery is also affected by Massive lay-offs and the decrease in taxes affect the way families spend on grocery do the coast of the month would normal spend on groceries.
Every household is affected by the amount of groceries that are purchased because there has to be enough for everyone to eat within the time frame of grocery shopping, Which means some household may have to turn to the government assistance programs to purchase food if they are not able to provide for their families and make ends meet. Businesses are affected by purchasing groceries because they have to stay competitive if they want to flourish in business. Consumers would be likely to travel to other businesses outside of their vicinity to purchase items at a sale price; therefore businesses will have to compete to keep residents patronizing their establishments.
Massive layoff is another thing that affects the household, government and also businesses. One of the major affects to the household is that it reduces the family income which in return lowers the buying power of the family. Which in return the economy of a country suffers since the laid-off employees cannot put money back to the economy.
Which, on the other hand these layoffs affects the local business community in that, there is a rise in cost to the local organization with the increase of recruiting and developing along with training of new employees. The government is also affected by the layoff of employees because it leads to increased spending for the government since the government is forced to use the taxpayer money to pay for unemployment insurance benefits extensions as well as providing food for those that are in need.
. Federal, state, and local governments have the power to tax which gives them the power to control whether to rise are lower tax to suit their needs. Which by rising are lowering taxes they affect the income of every household in the community which leads to lower are higher interest rates for the consumer.
Tax increase will decrease disposable income, because it takes money out of households. A tax decrease will increase disposable income, because it leaves households with more money. Disposable income is the main factor driving consumer demand, which accounts for two-thirds of total demand. The federal government can finance budget deficits by borrowing in the financial markets. Investors consider U.S. government bonds to be risk free, because they are backed by the taxing power of the government. States and cities also issue bonds to finance deficits. These bonds, however, are considered riskier because the tax base of the state or city could erode. The federal government and only the federal government can print more money. Like raising taxes, this has potential economic consequences which may lead to higher inflation, as well as political consequences. Nevertheless, the federal government does have that option, which is certainly not open to households and businesses.