...occur that can affect each other. These events are assembled and will demonstrate the relations between certain things such as government, households, and businesses. Purchasing of groceries Purchasing of groceries affects the households, government, and businesses. The households demand for the groceries is determined by the need and the prices at which the groceries are sold at any given time. Purchasing of groceries satisfies the consumer need for consuming the commodity. In addition, the consumer disposable income is reduced therefore the consumer is constrained in consuming other commodities. On the other hand, businesses are also affected by the purchasing of groceries. For instance, they get high income from the purchases. However, this depends on the demand and supply of the groceries. If the demand for the grocery is high and supply is low than the businesses have more income (Colander, 2010). On the other hand, if the demand is low and supply is high than the purchasing the groceries provides the business with low income because the prices are low. Therefore, purchasing of groceries affects the businesses operations because they are determined by the amount they receive from such purchases. The purchase of groceries also affects the government in many ways. One of them is that the government determines the taxes to be imposed on the groceries, depending on the need. It also affects the government in determining other commodities to be sold and where they ought to be...
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...time period. In the United States, as in most countries, GDP is calculated on an annual basis. GDP measures a nation's productivity. GDP does not necessarily reflect a relative standard of living. Real GDP Real GDP expresses GDP in terms of base-year prices. A base year is the first in a mutually agreed upon series of years. Price level indexes in the base year are assigned an arbitrary value. Price levels in subsequent years in the series are expressed in values relative to the base year. This process provides for a more meaningful comparison of one year to another within the series. Nominal GDP Nominal GDP refers to the raw data produced by annual GDP calculations. These data are not adjusted for inflation. Because of the effects of inflation on economic indexes, nominal GDP does not accurately reflect changes in GDP compared to previous years. Unemployment Rate The unemployment rate reflects the percentage of the population that is able and willing to work and is looking for work, but is unable to find work. Inflation Rate The inflation rate is the rate at which the price of goods and services rises. Increasing inflation decreases the value of currency, which decreases buying power. Interest Rate An interest rate is the charge to a borrower for the use of an asset, usually money, expressed as a percentage of the principal. Interest is charged to compensate for the lender’s loss of use of the asset. A low-risk borrower will usually be charged a lower...
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...the general level of prices for goods and services is rising, and, consequently, purchasing power is falling. * Interest Rate - The amount charged, expressed as a percentage of principal, by a lender to a borrower for the use of assets. Interest rates are typically noted on an annual basis, known as the annual percentage rate (APR). Running head: Fundamentals of Macroeconomics Paper Fundamentals of Macroeconomics Paper – Part 2 Fundamentals of Macroeconomics Paper – Part 2 Purchasing of groceries affects the households, government and businesses. The households demand for the groceries is determined by the need and the prices at which the groceries are sold at any given time. Purchasing of groceries satisfies the consumer need for consuming the commodity. In addition, the consumer disposable income is reduced therefore the consumer is constrained in consuming other commodities. On the other hand, businesses are also...
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...professor finds three quantifiable reasons that may explain why taxes in Sweden are high, yet the incentives to be productive remain. The first is third-party verification of taxable income. There is a lot of that in Scandinavia, but even so Sweden remains an outlier. The second one only seems to apply to Denmark: It has a clean and transparent tax system, without many loopholes and deductions. This keeps people from sheltering their income. It also keeps high-income foreigners from coming to or staying in your country. (Native Danes, in contrast, seem to be quite attached to their homeland.) Third, the Scandinavian countries subsidize a lot of things that are complementary to work – such as education, child care, elder care and transportation – thereby compensating for their high taxes. Here again, they are outliers. Other Organization for Economic Cooperation and Development countries reach very similar participation rates with very low levels of such subsidies. Would those policies work in other countries? Perhaps. But perhaps they are all just manifestations of a highly productive public sector that the people like to put to use to do stuff. Furthermore, the high taxation caused a lot of issue. One of the issues is inadequate income, the total outcome of all of the effects listed below is a large tax burden. And only workers feel the brunt of this burden, because only workers create wealth. When all of these effects are combined, the tax burden on the average worker is currently...
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...year. The Real GDP accounts for changes in price level, giving a more accurate figure for the year. Nominal GDP is gross domestic product that is adjusted for changes in price levels or inflation. The unemployment rate is the percentage of total labor force not employed but is willing to work and seeking employment. Inflation rate is the rate general level of prices of goods and services rise reducing in long-term purchasing power. Interest rates are the amount charged by a lender to borrower, expressed as the percentage of principal. Different economic events have an impact on the government, households, and private businesses, in terms of flow resources between the three. This section will describe how the flow of resources from purchasing groceries, massive layoffs, and a decrease in taxes generates between government, households, and private businesses. Purchasing groceries affects every household because it is a necessity a household cannot do without. When demands for product increases this...
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...Fundamentals of Macroeconomics ECO 372 June 7, 2012 Fundamentals of Macroeconomics This paper will consist of two parts in which will apply and define some fundamentals of macroeconomics. Part one will explain six terms; gross domestic product (GDP), real GDP, nominal GDP, unemployment rate, inflation rate, and finally interest rate. Part two will consist of describing how three economic activities, such as purchasing of groceries, massive layoff of employees, and decrease in taxes affect the three main sectors of the United States economy. The three main sectors are divided into categories, businesses, government, and households. Part two will also describe the flow of resources for each economic activity from one entity to another. Part I: Macroeconomic Terms Gross Domestic Product (GDP) Colander stated that the gross domestic product is, “the total market value of all final goods and services produced in an economy in a one-year period” (p. 183). The GDP is essentially separated into four expenditure categories; the cumulative monetary value of all finished goods from private and public consumption, the sum of government spending, the sum of the country’s spending on capital, and net exports. The net exports are calculated as total worth of exports minus total worth of imports. GDP consists of supplies and services generated...
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...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...
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...whole world operates, affecting everyone’s lives in one way or another. “The U.S. economy can be divided into three sectors: household, businesses, and government” (Colander, 2013, p. 55). Economic activities such as purchasing of groceries, massive layoff of people, and decrease in taxes play a vital role in how the flow of resources interconnects from one entity to another. Purchasing of Groceries The purchasing of groceries has many effects on the economy as well as in households and the government. The purchasing of groceries affects households because it is an element that is needed and one cannot live without, making it impossible to ignore. Thus, households interact with businesses and the government in many forms. First, households supply economic resources such as labor, and other factors of production to gain income to purchase goods (the purchase of groceries) is called the factor market, and services that businesses produce to sell is known as the “factor market” (Colander, 2013, p.55). Furthermore, businesses rely on households to determine what and how much to produce, because if they over produce and households do not purchase the production, then they will have to sell the items at a mark down price in order to meet the demand of product known as the “goods market.” The money that flows from households to businesses transforms into what is known to the economy as consumption. That money then goes into the financial system of the economy rising GDP. However...
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...government activities that affect us every day. The economic activities have a major effect on the economy in any ways. If citizens were educated on them, things might change in their favor. “Economics is the study of how human beings coordinate their wants and desires, given the decision-making mechanisms, social customs, and political realities of the society. One of the key words in the definition of the term “economics” is coordination” (University of Phoenix, 2013, p. 1). Government economic rules and laws are constructed to benefit the government and not the citizens. Many factors play roles in supply and demand. This paper will discuss a few different activities and how they influence the economy such as purchasing of groceries, massive layoff of employees, and decrease in taxes. Purchasing of Goods The purchasing of groceries affects the government, households, and businesses. The government determines the amount of taxed of groceries, which groceries can be sold and when they can be sold. Decreased taxes means less spending money for the government, which also means more debt they will accumulate. Households with low income are affected when taxes are high. Consumers are limited on the amount they can purchase, causing inadequately providing for their families. Families will then lean towards government assistance and other family member and the community for support. By this, many businesses are also affected by the decreased amount of consumers buying their products. Consumers...
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...that will be cover in macroeconomics is Gross Domestic Product (GDP) is the standard living of a country through its goods and services. These goods and services are produced by any given country in any given time. These goods and services are sometimes the primary source of economic stability of any given country. Real GDP is the market prices primarily on a specific year (Colander, 2010). One will focus on the purchasing of groceries, massive layoff of employees, and decrease in taxes affect the government, businesses, and households. It was once said by President Calvin Coolidge that “The business of America is business” (Colander, 2010). For most countries its economy is broken down in to three parts: the government, households, and businesses. We will cover each one briefly and explain how each one has an effect on the other. Household are the target of a business through its goods and services. In other word we are the consumers. Consumers are what make business thrive to success. Businesses are the primary source of goods and services. Their main objective is to sell to households and a government. Finally the government, they are responsible for making business with foreign countries and makes...
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...issues facing the people of this country but also the way economists looked at and measured the economy. Keynesian economists of the 1940s and 50s brought about the birth of Macroeconomics, which according to Colander (2010) is “the study of the economy as a whole and considers the problems of inflation, unemployment, business cycles, and economic growth” (p. 15). Even with this basic definition as well as the amount of information available to households today from the Internet; comprehending the terms, how economic activity affects the economy, and the problems that macroeconomics considers is difficult. This first part of this article simplifies the most widely used terminology; whereas the second part explains the effects of economic activities on households, businesses, and the government while correlating the relationship between these different entities. When students begin learning about economics, students get exposure to terms that they previously may not have used or understood. One of the most confusing terms to understand is the Gross Domestic Product or otherwise known as the GDP, which shows how much a nation has grown by calculating the market value for goods and services made domestically in that nation over a one-year period. The government releases the GDP every three months, and usually has information revised monthly (Griffis, 2012). The “Real” GDP is an inflation-corrected GDP with a more accurate figure because the report accounts for changes in price levels...
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...Economic Activities In America's economy, there are different activities that will affect the government, households, and businesses in our economy. Some of the key activities are purchasing groceries that is a daily activity for most Americans; another example would be a massive layoff and a decrease in taxes. I will start with purchasing groceries; the amount of groceries that are purchased from a retailer will have an effect on businesses. The stores survival is based on getting consumers to spend money so they may stay in business and outperform their competitors. When consumers purchase groceries this affect, the government due to the taxes included in the prices that could impose a limit a person may purchase. Tracking consumers spending habits can help the government determined if the economy is strong or headed toward a recession. The groceries consumers purchase were produced on farms, which means a farmer or a company sold a product for themselves or a business that paid taxes on the revenue received. A company or farmer must pay taxes for equipment and products that are being used to produce their product and for employees. A consumer not only pays for the product they receive but government taxes. Massive layoffs of employees can have negative effects, not only on the company and individuals but also the government. When a company or business must lay off employees, this affects the economy due to the fact individuals will have less household income to spend in...
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...Adult Entertainment: The Effect it has on Local Politics, Taxes, & Society Lindsey M. Chapman BUS 670: Legal Environment Professor Kim Stock-Foster May 21, 2012 While planning the development and growth of any city, most government officials do not keep the idea of adult entertainment type businesses at the top of their list or in the front of their minds; however almost any and every city of any size will have to encounter this type of business at some point in time. Adult entertainment type businesses come with their own type of issues when it comes to tax laws, business permits, and so forth, but in the past these types of businesses have been able to utilize their First Amendment Rights to defend their style of business, but when these types of businesses are utilizing local tax money to protect and defend their businesses when is enough, enough? It is well known that many people will turn to adult entertainment, not only for entertainment but for work for the simple fact of making a significant amount of money in a very short time; however what kind of impact do these types of businesses have on local governments and societies when the majority of the employees do not pay any taxes on their income? The following paper will describe the effects that adult entertainment businesses have on local governments, the tax laws, and the effects these taxes have on the society of the environment the business is in. Throughout history there have been many...
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...Fundamentals of Macroeconomics As one begins to understand how the economic world around him is affected by basic events, one must gain a basic knowledge of the basic design of the economy for maximum effectiveness. To facilitate this learning process, this paper will describe some basic terms that are in most discussions surrounding economics. Once there is an understanding of the terms, the description will change to several scenarios, and how the result of a seemingly innocuous event has a ripple effect throughout the economy, affecting households, businesses, and government. Macroeconomic Terms There are a few very basic terms and concepts that one must understand when embarking on a discussion of macroeconomics. These building blocks will help one to understand why and how the economy works, and what effects of investment decisions, unemployment, and inflation have on the economy. Gross Domestic Product The Gross Domestic Product (GDP) is the value of goods and services produced in a country during a given year. To calculate GDP, it is necessary to add the total of all consumer spending, government spending, investing and net exports. Real GDP The Real Gross Domestic Product is the value of goods and services produced in a country for a given year once inflation has been taken into account. Nominal GDP The Nominal Gross Domestic Product is the value of goods and services produced in a country for a given year using existing prices. Unemployment...
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...globally. Every action that involves goods, services, and money affects the economy of a country or nation. Simple actions such as shopping or buying groceries can have a huge effect on an individual, business and governmental level. Other factors that have a huge effect on global economics are layoffs and unemployment, as well as government actions such as tax increases or decreases. Food is a necessity for the survival and ability for individuals to thrive. Buying groceries is a task that most have come to hate, but realize the need to continue this act. Every time a grocery cart is loaded, paid for and bagged the economy is affected. Households business and even government are affected by the production, distribution and purchasing of groceries. On an individual and house hold level, families have to budget for groceries. Food is dire for survival, but for some people living pay check to pay check obtaining food can become a constant worry over having the necessary funds. According to “USDA” (2015) “the food-at-home (Grocery store or super market food items) CPI was down 0.5 percent in March and is 1.9 percent higher than last march.” As prices of groceries continue to rise families are having to cut back on the amount of groceries being bought, or buy lower grade and less healthy food. Businesses are directly affected by the increase in grocery prices as well. Distribution as well as production prices have increased, which means that mixed with a decrease in groceries...
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