Why Is Economics So Vital For Any Sovereign Nation?

Course Description Principles of Macroeconomics deals with consumers as a whole, producers as a whole, the effects of government spending and taxation policies, and the effects of the monetary policy carried out by the Federal Reserve Bank. Macroeconomics is concerned with unemployment, inflation, and the business cycle. Text Required: Macroeconomics, Roger A. Arnold, 7th Edition, 2005 Recommended: Macroeconomics Study Guide, Roger A. Arnold, 7th

There are many of us out there that constantly ask ourselves, “how exactly does the U.S. economy work?” During an inflation we might conclude that we have an Economic problem, on the other hand, if we have a huge increase of jobs; we might then conclude that as an economy we are doing a good job. There are many factors that one needs to consider in order to come to a conclusion on whether we are doing a good or bad job in the economy. I will be touching base on some of the various microeconomics tools that we can use to describe the changes in supply or demand. I will also be discussing the history behind this material and the governments involvement behind this process. We all use the laws of supply

The study and application of macroeconomics influences the well-being of a nation by achieving high rates of material production and by keeping track of how much of something is being consumed. The United States is one of the wealthiest countries in the globe, making the government powerful. Government intervention in the Untied States is an important factor that keeps the economy running. Enough power to control the business cycle keeps money circulating the nation. The business cycle includes economic downturns, classified as recessions, expansions, business-cycle peaks and troughs. A good government is essential for the economy to run smoothly. There are three main macroeconomic variables in the nation that the government focuses on, Gross Domestic Product (GDP), unemployment rate, and inflation rate.

Is economy important? Believe it or not, economy is a significant and vital piece that makes our world function today. Importing, deporting, distribution, and trade are all parts of economy. Countries, towns, cities, and people all contribute to their economy, in different ways, at one point of their life, more or less. In fact, even something as simple as buying fruit from a local food market is helping their countries’ or civilizations wealth prosper, develop, and thrive.

Macroeconomics is the field of economics that studies the behavior of the economy as a whole not certain parts. Gross National Product (GDP) the economy’s total output; how it is affected by changes in unemployment, national income, rate of growth, and price levels. Macroeconomics encompasses an increase or a decrease in net exports would affect a nation 's capital account. Government’s role in macroeconomics is to keep the economy in equilibrium; taxes and government spending augment the balance to achieve equilibrium in the economy

The economy goes in business cycles where it has recurring period of economy-wide expansion (growth) and periods of contraction (shrinking). These cycles are often measured by the increase or decrease in the gross domestic product (GDP). The economy produces not just goods and services to satisfy its members but also jobs, because more people participate in the market economy by trading their labor, and most rely on

A recession is full-proof sign of declined activity within the economic environment. Many economists generally define the attributes of a recession are two consecutive quarters with declining GDP. Many factors contribute to an economy's fall into a recession, but the major cause argued is inflation. As individuals or even businesses try to cut costs and spending this causes GDP to decline, unemployment rate can rise due to less spending which can be one of the combined factors when an economy falls into a recession. Inflation is the general rise in prices of goods and services over a period of time. Inflation can happen for reasons such as higher energy and production costs and that includes governmental debt.

In order to understand the Macroeconomic equilibrium, you must understand the aggregate supply which is the output total of good and services generated by the economy during a certain time. Macroeconomic equilibrium occurs when both the aggregate supply and demand balances at the same level. For example; If the government generously gives $500 to taxpayers then we will see an increase in the aggregate demand because people will use the money to purchase more items in the economy. In addition, the price level will start to increase due to consumers are buying more. Therefore if the consumers are buying more of the goods then the real wealth will increase and cause the suppliers to create more

When an economy is healthy, there generally are low unemployment rates and wage increases, as businesses demand labor to meet the growing economy. As mentioned above, more Americans are returning to the workforce, as there is a demand for labor in the economy. In a struggling economy, it brings about lower profits for companies, resulting in lower stock prices. On the other hand, the GDP can have the direct opposite effects. If the GDP growth rate increases to fast, it may cause the Federal Reserve to raise interest rates to diminish inflation, thus making goods and services more expensive. Also, if the GDP slows down too much, it can lead to a recession, and once again effect businesses by decreasing their revenues, hiring rate, and consumer spending. Indisputably, a lower unemployment rate can boost the economy in different ways. A lower unemployment rate results in more jobs created and an increase in goods and services produced. For this reason, lower unemployment rates directly correspond with furthering the GDP and the

Many people think that economics is about money. Well, to some extent this is true. Economics has a lot to do with money: with how much money people are paid; how much they spend: what it costs to buy various items; how much money firms earn; how much money there is in total in the economy. But despite the large number of areas in which our lives are concerned with money, economics is more than just the study of money.

Economics is vital for development of any country. I took up the study of economics to understand the workings of different economic units to bring about development. It has been common knowledge that economics is what determines development of any country. Having an interest in development of a country from a young age, I soon developed interest in economics and economic units that would lead to development.

Timing of the business cycle is not predictable, but its phases seem to be. Many economists site four phases—prosperity, liquidation, depression, and recovery. During a period of prosperity, a rise in production leads to increases in employment, wages, and profits. Obstacles then begin to obstruct further expansion. Production costs can increase, helping create a rise in prices, and

Economics play a role in social issues. This role is more significant than most people who are not economists can understand. To the lay person, it would seem that economics and social issues are two separate things entirely. After all, economics deals with money and social issues deal with people. But money and people are inexorably intertwined, both in government policy and in real life. Just as a person can not get by in the world without money of some kind (or some kind of capital with which to barter), government can not make economic policy or social policy in a vacuum that does not take the other side of the coin into consideration.

Macroeconomics concerned with the large scale of economic factors and the high level of national productivity. Employment is also the big issue of macroeconomics. Due to the increase in population and also increase in technological improvement people nowadays facing a high chance of unemployment rate in the world. Many and more new product is develop in the world by the help of the technology and its robotic process.

Discuss the role of government policy in reducing unemployment and inflation. In your discussion make use of the diagrammatic representation of the macroeconomy developed in lectures in Term 2