Macroeconomics Authored by Paul Krugman and Robin Wells - Essay Example

One of the concerns of macroeconomics is the changing face of the economy of the nation and how it affects businesses and individuals. In this section, the chapter talks about the recessionary face of the economy when businesses are suffering losses, and as a result of these losses, they decrease their labor force which results in an increase in the rate of unemployment (Krugman 144). Another subject that has been discussed in the chapter is inflation which is a term used to denote the continuous increase in the prices of goods and services (Krugman 151). An increase in the inflation rate at one point in time leads to a decrease in the ability of consumers to purchase goods and services. Due to this, they are able to purchase fewer goods and services in a given time period as compared to the previous time period when the rate of inflation was low. The chapter states that the government has to intervene to solve the counter inflation and increase the living standards of its citizens. Read More