Fundamentals of Economics

Fundamentals of Economics

  • Submitted By: kward131
  • Date Submitted: 09/12/2014 12:10 PM
  • Category: Business
  • Words: 769
  • Page: 4


June 4, 2014
Kimberly Hlaing

Fundamentals of macroeconomics are very crucial for the growth of an economy. Various economic activities affect three major sectors of the economy. These sectors are the government, the household and the existing businesses. Purchase of groceries has an effect to the government. The government is responsible for setting the tax rate that the grocery should observe. When the household purchases the groceries, the grocer collects tax from them and gives it to the government. Regulation of the quality and standards of the groceries that are purchased from the suppliers is done by the government. The purchase of the groceries thus increases the government’s revenue through tax collection. If many groceries are purchased it means that the government gets a lot of revenue through tax. The purchase of groceries also has a great impact on the households.
The collective income of a family determines its purchasing power of groceries and other types of foods. The households that earn high income have higher purchasing power and hence contribute more to government’s revenue through taxes. Purchase of groceries helps businesses as the owners get profit from selling the groceries. The purchase of groceries helps to fuel the economy as money is spent in places like market stall and malls.
It is also important to note that suppliers buy equipment which they use in production; people are hired to carry out the production process, and jobs are also created through transport of the products. More jobs are created in other industries where the equipments are purchased. The government also gets taxes from those industries. Each and every person that has also been employed remits taxes to the government. The households keep the businesses growing by purchasing the groceries.
Massive layoff of employees also has a great impact on the three sectors of the...

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