ECO 100 Economic Principles – Macroeconomics

Economic Principles – Macroeconomics

BoA Macroeconomics






Economic Principles – Macroeconomics


Macroeconomics is the study of the behavior of overall markets and systems. It is what we mostly see on the news or other forms of media. For instance, it studies inflation, unemployment rates, the GDP (gross domestic product), national income among others. It measures how the economy is performing in an attempt to understand what drives it and what areas can be improved. Decision making is improved when economics is carefully studied such that proper planning is implemented to avoid issues of unemployment or to guide the government on tax cuts. Policymakers such as the government have three major goals including reducing unemployment rates, stabilizing prices as well as keeping the economy growing. This final report will, therefore, examine the macroeconomics of the Bank of America especially, the unemployment rate.

Unemployment rate

Every country has an unemployment policy that reduces the rates of unemployment. An unemployment rate gives statistics of all the individuals who are competent to work, are searching for jobs, but there are no opportunities for them. Frictional unemployment refers to the individuals who are temporarily unemployed or those who are between jobs. Structural unemployment refers to individuals who are out of work because there is no demand for their specific skill set. Economists believe that it is impossible to have a 0 unemployment rate even when people are forced to work. Also, some job positions are gradually becoming redundant as machines are replacing them.

Cyclical unemployment refers to unemployment due to circumstances such as a recession. It happens when consumers stop purchasing products or services, therefore some employees have to be laid off because no sales are made. The only time economists say that there is full unemployment is when there is frictional as well as structural unemployment. The GDP and unemployment are closely related since when one is falling the other are rising. For instance, if the GDP of a country is rising then the unemployment rate is falling and vice-versa (Barrington, 2020). During the great depression of the United States in the 1930s, the GDP fell due to drought, redundant policies as well as bank failures, the employment rate then rose to about 25%.

The Bank of America is very consumer-oriented, one of its goals includes having many depositors for them to find efficient ways for them to access their vast financial products and services. However, if there is high unemployment, then it means that there are fewer depositors and more people purchasing loans to keep up with their lifestyles or businesses. According to Forbes, millions of United States citizens will file for unemployment benefits because the coronavirus pandemic has greatly affected the economy. Many cities have been shut down, many employees have had to work remotely, industries such as airlines and hospitality have been affected which means that fewer jobs mean less money (Connolly, 2019). Less revenue in service industries has translated to unemployment rates for many service providers. However, with financial education, then consumers will know where and when to invest as well as the best strategies to cope with recession or depression just like during the COVID-19 pandemic.

The Bank of America collaborates with non-profit organizations to fund early youth unemployment as well as education and training programs to boost their talents. They encourage the youth to join paid programs that allow them to know ways to handle the challenges in the workforce. The bank has products and services that the youth can purchase to encourage their savings culture as well as advise them on businesses they wish to start. The bank has a debit card for the unemployed to get, withdraw, or transfer cash. However, recently, the debit cards were suspended with the bank claiming that there were instances of fraud now that the pandemic has affected the economy.

Their clients are not happy about it since honest employees who need this card are denied the chance to access cash. There were constant complaints of the bank freezing accounts and taking hard-earned money from them. A lot of workers are losing benefits from purchasing these products and services, yet this is the period when they need the money the most to sort their bills (Martín, 2020). Although the Bank of America supports the unemployed, the issues with freezing accounts and cases of fraud may compromise their service delivery. Employees in the travel and hospitality industry have lost their jobs and therefore need unemployment benefits from the Bank of America. If their products and services become less popular them this will be an opportunity for its competitors such as JPMorgan Chase and company to provide these unemployment benefits to them.

In the future, the financial sector will have to conduct aggressive education, especially in low-income households to encourage them to save and look for passive sources of income to avoid issues of debts they can pay (World Bank, 2020). If the bank keeps supporting the youth in their various innovation talents, then they are more likely to be independent. It will create financial services programs that provide packages to the youth to encourage their financial independence. The industry will have to implement ways to maintain employment and manage risks better. It means that economists will have to do continuous research on markets and thus predict what should be done to avoid recession. In conclusion, the Bank of America supports the unemployed by having debit cards and benefits to support them before they are employed. The coronavirus pandemic has affected many industries including, the travel and hospitality industry whose employees need their support.


Barrington, L., & Enayati, H. (2020). Job Change, Earnings, and Recalibration: Reemployment, Unemployment, or Retirement?. Public Policy & Aging Report30(3), 95-100.

Connolly, M. F. (2019). Essays in Empirical Finance and Macroeconomics (Doctoral dissertation, Boston College).

Martín-Artiles, A., Fortunato, V., & Chávez-Molina, E. (2020). Unemployment Benefits: Discursive Convergence, Distant Realities. In Towards a Comparative Analysis of Social Inequalities between Europe and Latin America (pp. 389-417). Springer, Cham.

World Bank. (2020). The COVID-19 Crisis Response: Supporting Tertiary Education for Continuity, Adaptation, and Innovation.

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