Microgrid (MG) concept has been emerged to enable integration of renewable energy sources and storage devices using power electronic converters. An MG can be grid connected to exchange power with the main grid, isolated that is completely separated from the grid, or islanded that is temporarily separated from the grid. The P and Q-V drooping approach is commonly used to control and achieve power sharing among the generators.\\ This study presents an approach for systematically modeling a class of microgrid (MG) systems. The derived model 1) accommodates grid-connected and islanded operation of the MG simultaneously, and 2) allows modeling of converter-based as well as directly-interfaced resources. The originally nonlinear model is then converted to a linear model whose eigenvalues determine local stability of the MG. \\The model is used to analyze the impacts of adding cross-coupling droop terms (P-V and Q) on an MG's performance. Various performance aspects such as stability, stability robustness, transmission power loss, voltage profile, and power sharing are considered. The conclusions are as follows. (1) Addition of a small portion of cross-coupling will reduce the losses without compromising other aspects in a grid-connected MG. Larger cross-coupling terms will compromise the system stability. (2) Large cross-coupling terms can be added to reduce the power loss and to improve the system stability in an isolated MG. Simulation and experimental results are presented to verify the derivations.