Macroeconomics has its six component principles. The six are interest, capital, income, government spending, and employment. The basic concept of the six component principles is that there is an invisible hand in the economy that will push money from one economic sector to another. That is called a demand curve.
The first principle of macroeconomics is supply and demand. The supply of money is the most important factor for economic growth. It determines where the money goes to and how it is spent. The supply of money is also determined by a variety of things including demand. When there is less demand than supply of money then it is said that the money is being oversupplied.
The second part of macroeconomics is government spending. The government spends money on things like infrastructure, education, and so on. A good example of a public expenditure is the money that is spent on a road construction project. The government will always have the money available to spend and it will be used to build roads. The money that is spent on a road construction project is called tax revenue.
The third part of the government is income. Income refers to how much money a person makes from something. Some examples of money making activities are selling a product or service and receiving a commission. Most people will receive income from either one or both of those examples. The income of a person can be divided into two parts. First, the income is divided between the person and the employer. Second, the income is divided between the person and other people.
The fourth part of the government spending is income tax. When a person earns income it is taken away from his assets and taxed by the government. The most common types of taxes include personal income tax, corporate income tax, and payroll tax. All of these taxes are based on income and some of them have different rates.
Macroeconomics helps you to understand the relationships between the six basic components of macroeconomics. If you understand that there is a demand curve and there is a supply curve then you can predict how the economy will grow. As an entrepreneur you will want to know how to make the supply curve run smoothly and how to create an economy that is going to grow at a steady rate.