ABSTRACT
This chapter examines two characteristics of the middle class predicament: first, the stagnation of real incomes for most members of the middle class, and second, the expansion of easily available consumer credit. It explores the workings of the consumer economy and theories about the relationship between consumer demand and aggregate economic health. The major issues macroeconomics addresses are the relationships between inflation, unemployment, wages, productivity, and employment and growth. Most macroeconomists believe that government actions affect economic performance, though they differ on which government activities produce the effects and whether the effects are good or bad. Enter Macroeconomics Macroeconomics as it is currently understood is a product of the Great Depression, which was precipitated by the stock market crash of October 1929. All macroeconomics assumes that profits motivate investors to invest and that investment returns are a major force driving a prosperous market economy.
