Objectives of Macroeconomics

Income inequality describes the extent to which income is distributed unevenly among residents of an area. High levels of inequality indicate that a small number of people receive most of the total income, and that most people receive only a small share of the total. There are many advantages and disadvantages associated with the inequitable distribution of income.

Prices of the different products and services of the organization should be market specific. The economic capability and disposable income of clients should be put into consideration in setting prices for the products and services offered by the organization. By matching prices with the economic capability of a people, it would be much easier to for customers to access the products and services without straining or having to compromise and going for other products of lower quality (Donna, 2012).

c. quantity demanded of a taxed good in response to a change in the tax rate

1. If an economy produces final output worth $5 trillion, then the amount of gross

Income inequality is one of the greatest problems facing the United States today. It is important for everyone to understand what this means and why this is a problem.

I agree with the second article. The article is called “Three Cheers for Income Inequality” and is written by Richard A. Epstein. “Three Cheers for Income Inequality” is about reducing income inequality through tax policies. In order to do so, Richard Epstein discussed giving wealth to the lower class citizens. Richard Epstein says that taking from the wealthy would help and be more beneficial to those who do not have as much. This would make the income line more equal. The money would come through the taxes. (260).

Macroeconomic principles come into play when the whole market or more outside factors are involved. Examples of this in the video game industry, which I work in, would be when the rating system for games are under scrutiny, or when a new console is put on the market as competition. These outside factors affect not only the company I work for, but every other company in the industry, from the hardware manufacturers such as Microsoft and Sony, but also the game studios such as Activision, EA and Rockstar Games. Microeconomic principles are caused by and effect only my company in particular, such

In our textbook, “Principles of Macroeconomics,” the relationship between debt and deficit is described. A deficit is a shortfall in revenue for a particular year’s budget. Whereas, a debt is the total of all accumulated and unpaid deficits. An outlay is an amount of money spent on something. The federal government outlays are divided into government outlays and mandatory outlays. Government outlays are the part of the government budget that includes both spending and transfer payments. Mandatory outlays constitute government spending that is determined by ongoing long term obligations. Of the two, mandatory outlays is the largest portion of the federal budget. Lastly, Discretionary outlays compromise government spending that can be altered when the government is setting its annual budget. A budget surplus occurs when revenue exceeds outlays. A budget deficit occurs when government outlays exceed revenue.

Have you ever wondered how the goods and services you purchase become available to you, and have you ever wondered how the prices are determined? Even though economics involves many concepts, supply and demand, as well as trade, are among the most important forces in an economy because of their effect on prices, consumer behavior and economic growth.

The current widening income inequality is due to the substantial income disparity between the top and bottom workers in the U.S. economy. General decline in wage endangered the standard of living for low income family as they struggle with a tightened budget. In order to battle income inequality, policy makers must raise the income of the working poor by expanding tax credit program and increase its effectiveness through major modification.

In doing so it helps them figure out prices of goods and services just by looking at the supply and demand.

(What is REDISTRIBUTION OF WEALTH?). Redistribution of wealth policies in the United States take a greater share of income from those families belonging to the top 20th percentile than those families in the bottom percentiles (Prante and Hodge). Families in the top 20th percentile earn on average 50 percent of our nation’s income (Prante and Hodge). As a result the nation’s middle to upper class earners would appear to have stopped achieving as much success due to the redistribution of their money, this causing a tremendous drop in the nation’s income averaging around 39.6 percent. When comparing the top 20th percentile to the bottom 20th percentile, those within the lowest quintile of our population makeup only 3.1 percent of the nation’s income, according to statistics from 2012 (Prante and Hodge). By the process of redistribution, it increased those of the lower quintile incomes by almost $1.1

Income inequality has affected American citizens ever since the American Dream came to existence. The American Dream is centered around the concept of working hard and earning enough money to support a family, own a home, send children to college, and invest for retirement. Economic gains in income are one of the only possible ways to achieve enough wealth to fulfill the dream. Unfortunately, many people cannot achieve this dream due to low income. Income inequality refers to the uneven distribution of income and wealth between the social classes of American citizens. The United States has often experienced a rise in inequality as the rich become richer and the poor become poorer, increasing the unstable gap between the two classes. The

Income redistribution refers to the concept of transferring income from the wealthy individuals to the less wealthy individuals through social mechanisms such as monetary policies, charity, welfare, land reforms, and taxation among others. Income redistribution affects the entire economy rather than selected groups of individuals. The concept of income redistribution emanates from the existence of income inequalities within an economy. Income inequality depicts a gap between the highest and the lowest income earners in an economy (Tullock 13). Income inequality is sometimes considered appropriate in societies since it acts as an incentive in free market economies, whereby in the absence of inequality, elements of economic stagnation and lack of enterprise would emerge. Conversely, income inequality is criticized on the basis of introducing contributing towards the development of key problems in the society, including progression of poverty levels. This paper seeks to explore the concept of income redistribution and its key pros and cons.

It is often suggested that the large current account deficit poses a serious financing problem for the United States. Each year, the lament goes, the United States must attract net inflows of capital sufficient to "cover" the huge current shortfall. But this proposition gets the logic backward: the U.S. deficit is "financed" by net capital inflows only in an ex post accounting sense. In economic terms it is more nearly correct to say that net capital inflows cause the current account deficit. (p. 218)