Macroeconomics – Economic Activities Effects On Government, Households, and Businesses

This paper discusses the manner in which purchasing of gases, massive layoff of employees, and increase in taxes affects government, households, and businesses. There are three significant sectors: government, household, and business, which constitute the microeconomic circular flow model. Besides, there are three significant markets: financial factor, and product, which illustrate the constant flow regarding the payments for the various goods and services among producers, suppliers and consumers (Mankiw, 2014). These continuous payments, also, reflect certain emphasis on government purchases and taxes.

In regard to the effect of purchasing of gas on the government, it is significant to note that gas drilling is one of the most vital sectors under the consideration of the U.S. economy. In the recent decades; however, there has been need for close scrutiny with respect to environmental issues like water and air pollution, chemical management, and offshore regulation. Although national gas companies are lacking in the U.S., there are several businesses and large corporations that operate within the gas sector. Purchasing of gas demands the government to address three critical issues: factors that influence the prices of gas to increase; the manner in which these increased gas prices affect consumers; and the roles, which agencies of the federal government should play to ensure that the prices of gas are determined in a marketplace that is informed and competitive (U.S. Environmental Protection Agency, 2014). In regard to the effects on households, some consumers have been hit hard by the increased prices of natural gas. Such consumers include lower income households as well as companies like fertilizer manufacturers that rely heavily on natural gas. It is worth noting that purchasing of gas at high prices impacts on several businesses on various levels. For instance, the increase in diesel prices that farm equipment use for planting, harvesting and transportation of horse feed has led to increased prices of such feeds.

Massive layoff of employees influences dramatic effects on the unemployment status in the nation’s economy. The government experiences massive layoff of employees in terms reduced taxes from taxes. Having too many people laid off from their employment has negative effects on the national economy in the sense there will be lost opportunity for the government to earn income through taxation on their salaries (Barnes, 2012). In regard to the households, massive layoff of employees leads to poor standards of living. In this respect, housed holds will have low purchasing power, and therefore, will have limited capacity to satisfy the required needs. Massive layoffs lead to reduced amount of money in circulation whereby most people will become unable to afford basic items. For such individuals and households, luxury and discretionary items become be sacrificed. These, also, means that many businesses especially those that depend on luxurious spending from employed citizens will suffer. Their sales will go down and, therefore, result in low profits and even losses. Massive layoff of employees; therefore, influences the occurrence of massive economic depression. Although the 2015 oil out bust has made it cheaper for people to acquire the product at the gas stations, it has decimating effects on the gas workforce because most companies have opted to slash spending on order to survive the downtown. For instance, two hundred workers have been laid off at Talisman Energy and four hundred workers at Nexen Energy.

An increase in taxes is significant for helping the government increase its income. This implies that it will have adequate capacity to finance most of its programs without relying on donor funding. In regard to households, an increase in taxes leads to reduced incomes. This, in turn, influences the rate of poverty to go up. Many poor individuals from poor households become unable to find jobs following the government’s over taxation of the economy (Bankman, 2014). Therefore, there will be an increase in crime to in order to obtain the money required for sustaining households. With respect to businesses, an increase in taxes may lead to shoddy products. High taxes take away the money, which businesses need in order to improve the quality of products. Besides, some businesses close down and flee the country whenever taxes do not match their income.

In conclusion, this paper discussed the manner in which purchasing of gases, massive layoff of employees, and increase in taxes affects government, households, and businesses. Purchasing of gas demands the government to address three critical issues: factors that influence the prices of gas to increase, the manner in which these increased gas prices affect consumers, and the roles, which the agencies of the federal government should play to ensure that the prices of gas are determined in a marketplace that is informed and competitive. Massive layoff of employees; therefore, influences the occurrence of massive economic depression. In increase in taxes leads to an increased government income; but low reduced household and business income.

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