The Principles of Economics Applied in Real Life Essay

The Principles of Economics Applied in Real Life - Essay Example One of the latest major layoffs occurred at GM which let go of over 20,000 employees as the company filed bankruptcy. The severe job loss has implication at the micro and macro economic level. Since less people are working in America it means that the amount of money in circulation in the economy is lower. When there is less money moving around there are many symptoms that occurred as consequence of such an economic environment. Business activity lowers because the demand for goods from consumer diminishes due to their ability to afford the goods and services they used to purchase when they were employed. Auto manufacturers such as GM, Chrysler, and Ford are impacted as their overall levels of production supply goes down since there are not as many potential customers in the marketplace that can afford to purchase a new vehicle. The government is affected by the rising unemployment. Suddenly the demand for governmental programs and assistance goes up as more people become unemployment. The amount of participants of programs such as unemployment benefits, welfare, and student scholarship programs goes up. Many unemployed persons choose to back to school in order to keep these occupied and achieve professional development while they wait for the economy to begin producing once again so they can become a part of the workforce once again. During these harsh economic times some industries actually benefit and the demand for there products and services goes up. An example is the fast food industry and other cheap food establishments. People can not afford to eat at luxury restaurants, thus they meet their needs to go out and take family out to eat by going to neighborhood food stands and other lower price establishments. The recession which according to economic experts started in December of 2007 has costs the United States a total of 6 million jobs. If we assume that on the average these jobs