Fundamentals of Macroeconomics Essay Example | Topics and Well Written Essays - 500 words

Fundamentals of Macroeconomics - Essay Example GDP is mainly applied in determining the stability of a country’s economy. Calculations of gross domestic product are commonly done using the expenditure method, which adds total consumption, investment, government spending and net exports (Dolan, 2010). Real gross domestic product refers to gross domestic product evaluated based on the prevailing market prices in a given year. Real GDP can also be regarded as inflation corrected gross domestic product. Real GDP has the capability to indicate changes in the price level with a high accuracy compared to nominal gross domestic product (Dolan, 2010). This refers to the gross domestic product figure that has not received any adjustments on inflation. It is also the value of services as well as goods produced in a given country after the final stage of production. Increased purchase of groceries by households is a clear indicator of their improved economic status. This fact enhances growth of existing businesses as well as the emergence of new investments. In such a situation, the government benefits from increased tax collections obtained from value added tax and taxation from investments (Dolan, 2010). This refers to the reduction of the number of people under employment in a given country. The implications of undertaking such a step include negative impacts on the government, households, and businesses. Massive layoff of employees means that a large number of people within a country will have a reduced purchasing power. In such situations, household living standards will come down; businesses will close down due to low purchases, and government’s revenue collection will go down. Economically stable citizens within a country comprise a key pillar of a country’s economy (Dolan, 2010). Revenues generated from taxation are the principal financers of the government budget. Therefore, a decrease in taxes implies that the government will strain in meeting its expenditures. On the other

What is the purpose of government in the United States Essay

What is the purpose of government in the United States - Essay Example Seeking to explore the purpose of the US government with respect to the roles that it plays in the modern 21st century, the following will argue that there are many roles for the government of the United States. These include the promotion and continuation of democratic governance, economic development, the provision of social services, promoting justice and securing the nation from outside threat. All of the functions are inherent to the purpose of the United States. We now turn to an exploration of the government of the United States of America and its role as the torchbearer of democracy (Almond et al, 101-102). . One of the most important functions of the government of the United States is the promotion of liberal democracy. In a liberal democratic society, power rests with the people. Liberal democracy can be characterized by free and fair elections, universal suffrage and a plural society in which power is transferred through peaceful political means. Accordingly, stability in much of the world is defined as the establishment of both democracy and democratic rules of governance. By giving everyone a voice at the ballot, the argument follows that the political regime which gains power will be perceived as being legitimate and the result will be political stability. Accordingly, the role of the United States government is to ensure that political power is transferred through peaceful means and that political contiguity is maintained through the democratic system. As an entrenched cultural value of the United States, the promotion of liberal democracy is an important task for the government o f the United States. The promotion of economic development is another responsibility for the government of the United States. As a society with a capitalist economic system, the government of the United manages the economic system while understanding the importance of free