Access over 20 million homework & study documents

search

ECO 212 Week 4 IA Measuring Economic Health Memo

Content type
User Generated
Type
Study Guide
Rating
Showing Page:
1/3
Measuring Economic Health 1
Running Head: MEASURING ECONOMIC HEALTH MEMO
Measuring Economic Health Memo
Name
University of Phoenix
Measuring Economic Health Memo
As an economy runs and functions business cycles are made and these business cycles are
measured in the gross domestic product figures. Plainly stated, gross domestic product, is a
figure that signifies the total value of products that have been produced in a country on a given
year. The percentage increase or decrease in the gross domestic product figure is a way of
measuring and gauging the level of business cycle. Once the growth of the gross domestic
product figure shows an increase from the last period, we can say that many of the businesses in
the country has expanded or increases it operations or production and this is known to be an
upward trend for the business activities in the economy. When the opposite happens and there is
a decrease in the gross domestic product figure, then, it is considered to be a business recession
and business activities have gone south or slowed down (Cady, 2010).
Government agencies that are in-charge of coming up with the national fiscal policies are
given the power to decide how money is spent and control the supply of money circulating in the

Sign up to view the full document!

lock_open Sign Up
Showing Page:
2/3
Measuring Economic Health 2
country. Once the money supply is at a high level considering the current economy of the
country, it will experience inflation. This means that prices will rise and these agencies should
regulate it with a higher tax rate and an imposition of new taxes. When we look at the flip side, if
a country’s money supply is low and the economic activities happening in its markets have
slowed down, then, the business activities are experiencing a recession. The solution for this is to
use up the money of the government more by constructing roads and buildings that aid in easing
up the economical activities, thus, also, increasing the money supply. This will eventually lead to
a high GDP value for the country. It also explains that government agencies that control national
fiscal policies have a important part to play in the balancing act of preventing inflation and
recession at the same time through the making of national fiscal policies that promote growth.
National fiscal policies greatly affect every economic activity in the country such as
production and labor. These fiscal policies can control the increase or decrease in producing
goods and the condition of the employment of the population. Once the government decides to
spend more money, disposable income will be given to its population, which gives them the
leverage to exercise productive activities which can lead to employment as well. Once they
decide to do the opposite and decrease government spending, people will not have disposable
income, and they will be less productive and chances are employment will be lowered. On a
quite similar scenario, when the taxes rise up because of the government’s policy, its citizens will
have less disposable income leading to a decreased number of productive activities and lowered
employment level. If you take a look at it on the contrasting scenario, as the government lowers
taxes, people will have more money, can do more productive activities, and the employment will
also rise up (Cady, 2010).

Sign up to view the full document!

lock_open Sign Up
Showing Page:
3/3

Sign up to view the full document!

lock_open Sign Up
Unformatted Attachment Preview
Running Head: MEASURING ECONOMIC HEALTH MEMO Measuring Economic Health Memo Name University of Phoenix Measuring Economic Health Memo As an economy runs and functions business cycles are made and these business cycles are measured in the gross domestic product figures. Plainly stated, gross domestic product, is a figure that signifies the total value of products that have been produced in a country on a given year. The percentage increase or decrease in the gross domestic product figure is a way of measuring and gauging the level of business cycle. Once the growth of the gross domestic product figure shows an increase from the last period, we can say that many of the businesses in the country has expanded or increases it operations or production and this is known to be an upward trend for the business activities in the economy. When the opposite happens and there is a decrease in t ...
Purchase document to see full attachment
User generated content is uploaded by users for the purposes of learning and should be used following Studypool's honor code & terms of service.

Anonymous
Awesome! Perfect study aid.

Studypool
4.7
Trustpilot
4.5
Sitejabber
4.4