Taylor Garrett

April 18, 2016

Macroeconomics
Research Paper

The United States: How our Economic System and Government Combine to Enhance and
Stabilize our Markets and Influence the World around Us

Introduction

Economics is all about consumption. People either spend money now or they use
financial instruments- like bonds, stocks, and savings accounts- so they can spend more money
later (Adam Davidson). Economics is the branch of knowledge concerned with the production,
consumption, and transfer of wealth (Google). But what many people dont know is that there
are other more complex forms of economics such as Macroeconomics and Microeconomics.
Microeconomics is known as the part of economics that is concerned with the single factors
and the effects of individual decisions. But dont let these two similar terms confuse you,
because although they sound alike, they are different. Macroeconomics is defined as the
branch of economics that studies the actions and performance of an economy as a whole.
Macro focuses mainly on the aggregate fluctuations in an economy. Such changes include the
unemployment rate, the growth rate, gross domestic product, and inflation (Macroeconomics).
We use economics and economic principles in our life every single day. Whether we realize it or
not, economics is a very large part of what keeps the government going. Economics tries to
explain how wealth is created and distributed, and also how people allocate resources that we
find are scarce. In this paper I will demonstrate and explore the history and way that economics
has shaped the way that we live our lives today.

Taylor Garrett
April 18, 2016
Macroeconomics
Research Paper

Macroeconomics and the relationship between social institutions and a society

When comparing the relationship that a social institution has with a society, you must
first know what a social institution and what society is. A social institution is a complex,
integrated set of social norms organized around the preservation of a basic societal value.
There are five primary social institutions that are found among all human groups, they are
family, government, economy, education, and religion (Social Institutions, 2016). Now you
must know what a society is. A society is known as the interaction of individuals with each
other in a group. When the people within the group interact and develop a relationship with
each other, this tends to help create a society (Umar Farooq, 2011). Now that we know what a
social institution and a society are, we must now decide how they relate to each other through
macroeconomics. When looking at the big picture, social institutions help to create a society.
This being said, the process of macroeconomics is related to these things by the fact that by
studying multiple different things such as supply and demand, unemployment rates,
consumption, inflation, savings, investments, international trade and finance, and the national
income and output and how it all affects our society (Macroeconomics). If something was to go
wrong in the economy, suppose a company was to shut down all their factories, it would cause
a change in the social institutions. This would affect the economy, and cause many people to
lose their roles in society.
Macroeconomics and the relationship of social institutions to societal problems

Taylor Garrett
April 18, 2016
Macroeconomics
Research Paper

An example of a social problem that deals with macroeconomics would be the Great
Recession of 2007-2009. This recession is now generally known to be the most devastating
global and economic crisis since the Great Depression. Just like the Great Depression, there has
and will be an extended economic immobility that is likely to alter the American foundations
and society. After a Recession, employment has typically recovered within two or three years
after a recession, but even three years after the depression ended in 2009, the unemployment
still hovered at around about nine percent. Also after the recession ended in 2009, at least
twenty three states had made cuts to their education budgets, which in turn forced districts to
adopt measures to help save money. Some of these measures included having bigger class
sizes, and fewer extracurricular activities within the school system. Another problem that deals
with macroeconomics would have to be the fact that the popular support for government
spending on the social safety net has typically increased during recessions. This being said, over
the course of two years, polls suggest that support for income transfer policies have slightly
decreased (The Social and Economic).
Macroeconomics and the historical evolution of social institutions
The American economy is something that didnt just start yesterday, Ill avoid telling you
where It all started hundreds of years back. Ill start by telling the post-war history of the United
States economic growth. Five years removed from the end of the Great Recession,
economists. Policymakers, investors, business leaders, and everyday Americans from all walks
of life remain concerned about the future of economic growth in the United States. The
brutality of the two-year recession and the uninspiring recovery after, left everyone in fear.

Taylor Garrett
April 18, 2016
Macroeconomics
Research Paper

From the economists to the policy makers, they were all sure that the United States was in for a
long period of new and slow growth. Some of these fears that these people had are still
resurfacing today. The conditions that the economy is having right now could very well be the
result of structural changes in the U.S. economy over the past 40 years. Over the last forty
years, the American economy has undergone many changes in the structure that could either
help or hinder the growth in the long run. The changes that have been made not only affect the
structure of our economy, but also affect our society and social institutions. Some of these
changes include a shift in employment from manufacturing to services, the advent of the
internet, the entrance of women into the paid labor force, the more wide spread participation
of African Americans in all sectors of the economy, a larger openness of the economy to
international trade, and a rapid increase in income equality (Nick Bunker, 2014).
Macroeconomics and social institutions in a global context
Global economy is the economy of the world. It is considered as the international
exchange of goods and services. Global economy is expressed in monetary units of account also
known as money (World Economy). Just like every other economy, a global economy comes
with a few major consequences. The five major ones are the division of labor, increased
number of products, you no longer have control of national governments, there are a small
number of businesses that are operating internationally that can now control a vast share of
the worlds economic activity, and it also raises concerns about the rights and opportunities of
workers. Different countries could operate under a different type of economic system. The two
main types of economic systems include capitalism and socialism. If a country is ran under a

Taylor Garrett
April 18, 2016
Macroeconomics
Research Paper

capitalist economic system, this means that the produced goods and services are privately
owned and that shoppers regulate under a free-market economy. Living under a capitalist
economy means that there will be higher productivity, a better standard of living overall,
greater income inequality, youll have the freedom to act according to self-regard. On the other
hand, a country that is ran under a socialist economy means that the produced goods and
services are owned collectively. It also means that people arent competing to gain wealth, but
instead meet everyones basic needs in an equal manner. Living in under a socialist economy
results in less productivity, an overall lower standard of living, you have led income inequality,
and freedom from the basic want (Umar Farooq, 2015).
Conclusion
After studying macroeconomics this semester, and microeconomics last semester, I now
find it easier to understand the way that our governments economic system works. Ive
learned a lot about how inflation works, paradox thrift, Keynes Law and numerous other things.
Some of the things that Ive had a hard time learning and remembering include monetary and
fiscal policy and who controls each one. Now I have learned that fiscal policy is taken care by
the United States Federal Reserve system, and the United States congress takes care of
monetary policy. Not only have I learned more about the government and how it works, Ive
also learned about the history of our government which is some of what I talked about in this
paper. I never knew this much about the Great Recession and how much of an impact it had on
our country and still has on our country to this day. The fact that the recession ended sevenyears ago and we are still hurting from it and recovering from it to this day really shows the

Taylor Garrett
April 18, 2016
Macroeconomics
Research Paper

affects that the economy has on us and our lives and how hard it is to recuperate from it.
Although we all hope that our economy doesnt slip into another recession, it is bound to
happen at some point because our economy is still somewhat unstable. I hope that in the
future, we learn how to keep our United States economy stable and on track so that we never
have to slip into a recession or housing crisis again.

Taylor Garrett
April 18, 2016
Macroeconomics
Research Paper

Bibliography
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Taylor Garrett
April 18, 2016
Macroeconomics
Research Paper

Social Institutions. (2016, January 1). Retrieved April 18, 2016, from Farooq, U. (2011,
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