Economic Growth Essay

Consider the following examples of economic activities Purchasing of groceries grand layoff of employees Decrease in taxesDescribe how each of these activities affects organisation, households, and businesses. Describe the flow of resources from virtuoso entity to another for each activity. Relate at least nonpareil circulating(prenominal) event to the activities. Inflation rateIt is based on the rising impairment of good and services and falling purchasing power. This measurement shows how fast m unrivalledy loses value. This is calculated by how fast termss for goods and services rise over time, or how much(prenominal) less one unit of exchange buys now equated to one unit of exchange at a given time in the past. Real GDPReal variable, such as the real enkindle rate, is one where the effects of inflation switch been factored in. Real Gross national Product measures the worth of all the goods and services produced sound outd in the prices of approximately base year. N ominal GDPA nominal variable is one where the effects of inflation have not been accounted for. The Nominal Gross domestic Product measures the worth of all the goods and services produced stated in real prices.Macroeconomics is perceived as a relatively new concept considering the omit of sideline in studying the economy before the 1930s. However, a special(prenominal) terminology was created that dealt with the problems that is faced by the economy daily. That has aided in a better understanding the differences between macro and microeconomics. Macroeconomics speaks of the aggregate economic facotors and entails employment, interest rates and gross domestic product of nations. Purchasing of GroceriesThe amount of currency spent in each household differ based on the size andspecific needs of the family. A larger family will have a higher grocery bill in most cases. The government palys a major role because grocery items are taxed and will dtermine how much groceries families may be able to purchase. Businesses are in addition affected by consumerswhen sales decrease due to their inability to shop due to price increase. This will bring in less revenue for the business. Massive Layoff of EmployeesA massive layoff is an unpleasant occurrence for all involved. This is an indication of the economic state of the company as it implies downsizing of the company. In this situation, the company will inspect more responsibility on the few workers that they do have. They would not be able to operate sufficiently. This would impact households this represents a decease or cope (cut) in income. The standard of living of affected households will drop as a result of being laid off. The government will also be affected by massive layoff of employees due to the them having to pay unemployment to these individuals.