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Category: Business and Industry
Date Submitted: 11/14/2010 08:53 PM
Measuring Economic Health Memo
Focusing on the significance of gross domestic products (GDP) in determining the business cycle, roles of government bodies that make up national fiscal bodies, and the effects of fiscal policies on the economy’s production and employment and how government spending and taxes affect in a positive or negative way. These policies are illustrated as measures of economic health. Throughout this essay are detailed information on the three subjects that play a major factor in regard to adjustment within government expenses and taxes that either affects the economy’s production and employment rate in a positive or negative manner.
GDP is used to gauge the health of a country's economy. Never the less produced by individuals as well as companies in the U.S. The dollars worth represents GDP to all goods and services produced over a period of time. Typically, GDP reflects a similarity to the prior quarter or year based on calculated statistics. GDP is calculated by the total income of each individual in the economy based on their earnings as well as how much they are spending on the output of goods and services. GDP measures the economy’s expenditures based on four components that entail consumption, investment, government purchases, and net exports, GDP is a core source in the economy’s business cycle.
Business cycle is the recurring yet unbalanced inconsistent movements in economic activity. There are five phases of the business cycle identified as growth, peak, recession, recovery, and troughs which are affected by the levels of business investments, availability of money and credit, public expectations about the future, and changes in the world’s economy or political climate. The indicators of the business cycle reflect the employment rate, personal income for individuals, and industrial production. Shifting of the GDP and business cycle reflects how the government and alteration to the inflation rate are overly spending currency....