A common macroeconomic argument that makes use of the fallacy of composition is to treat the economy as if it were a household or a profit-minded business. An offshoot of this argument is to operate the Federal government (the "caretaker" of the aggregate economy) as a household or a profit-minded business. Some folks are prone to argue that economic ailments would vanish if only government operated like a business.

For example, during economic bad times (recession), the appropriate action of a profit-minded business is to lay off workers and reduce production. The reasonable action by a household is to reduce spending and set aside, or save, some income for the turbulence to come. Both of these actions, if undertaken by the macroeconomy, or promoted by government policies, would likely turn a modest recession into a devastating depression.

The macroeconomy is a complex system comprised of smaller components. An analogy is the human body. Individuals and firms make up the macroeconomy like cells and molecules make up the human body. Rules that apply to cells do not apply to the entire body. Rules that apply to firms do not apply to the entire macroeconomy.