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Fundamentals

In: Business and Management

Submitted By AntDollars73
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Macroeconomics

Fundamentals of Macroeconomics Paper
Lisa Goodman
ECO/372
8/20/2015
Laurie Klosk-Gazzale

Fundamentals of Macroeconomics Paper
Massive layoff of employees is huge problem skyrocketing the unemployment rate because companies are globalization which increase their profits and save the consumer money by giving jobs international instead of locally where minimum wage is higher. Calabresi (2015) “In an unhealthy economy, a single lost job becomes infectious, combining with others and spreading through family, neighborhood and community. Widespread cutbacks in spending by families mean lower demand for businesses and lower tax revenues for the government. This belt-tightening means fewer car sales and thus fewer jobs for car-part makers. It means less government spending on infrastructure and other public services, including economic development” (para, five).
Decrease in taxes can be seen if we measure the nation’s wealth. We would look at the GNP (Gross national product. This look at how taxes affect output. We then would look at the aggregate demand equation. * C = consumption spending by individuals * I = investment spending (business spending on machinery, etc.), * G = government purchases * NX = net exports
Cloutier (2015), “Consumer spending typically equals two-thirds of GNP. As you would expect, lowering taxes raises disposable income, allowing the consumer to spend additional sums, thereby, increasing GNP. Reducing taxes, therefore, pushes out the aggregate demand curve as consumers demand more goods and services with their higher disposable incomes. Supply side tax cuts are aimed to stimulate capital formation. If successful, the cuts will shift both aggregate demand and aggregate supply because the price level for a supply of goods will be reduced, which often leads to an increase in demand for those goods” (Gross

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