Measuring Economic Health Memo

MEASURING ECONOMIC HEALTH   MEMO                                             Pg.1

                          MEASURING ECONOMIC HEALTH MEMO

                                                        ECO/212

                                                      JULY 11, 2011

                                              RHONDA HOFFMAN

                                      PROFESSOR ROBERT COATES

                                                                                                                      Pg. 2

    In order to describe the use of Gross Domestic Product to measure the business cycle, you must know what Gross Domestic Product means.   GDP is the value of all final goods and services produced in an economy during a period of time. The main purpose of GDP is to measure a country’s total production. When a country’s GDP increases, the country has more goods and service but those goods and services may be very unequally distributed, therefore, GDP may not provide good information about the goods and services consumed by the typical person. (Hubbard, R. & O’Brien, A.) (2010). Pgs. 5 & 15.

    The roles of government bodies that determine national fiscal polices are: Department of Treasury- Manages and constructs the fiscal policy; Implementation of fiscal policy. Office and Management of Budget- development and analysis of fiscal policy; Office of the President of the United States- Decision making of fiscal policy; Government   Accountability   Office- audits the fiscal policy.(http://www.yahooanswers.com).

    Fiscal policies effects individual behavior as well as decision making from   business to households. A change in tax schedule directly effects cost of production and the bottom-line for corporations or individuals net income.

                                                                                                                          Pg.3

      Increases in taxes means reduction in income and fewer...