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Measuring Economic Health Memo

Christina Roddey

ECO/212

June 13, 2011

Luis Torres

Introduction

When it comes to measuring economic health, there are important things to remember. Gross Domestic Product (GDP) is primary used to measure the economy’s health. Fiscal policies are organized by the government to figure out what caused the unhealthy changes in the economy.

The Use of Gross Domestic Product

Gross Domestic Product (GDP) is a measure of the gross national output; it’s a cumulative of all the consumption of the all the consumption of the all households in an economy. The consumption or spending by the government into different economic welfare activities such as education, healthcare, welfare and military, private domestic investments in way of new projects and buying capital goods and a net current account balances. The business cycle is the growing and shrinking of the economy. When measuring a business cycle, it changes in real GDP which focus on the changes in output. There are four parts of the business cycle which are – peak, contraction, trough, and expansion. Information has to be collected after a certain time frame is completed, in which, the business cycles are next translated between the changing periods of economic recession or economic expansion.

Roles of Government Bodies

National fiscal policies are arranged by the President and Congress. They have steps that helps determine the policies. First, the U.S. Government Accountability Office searches through fiscal and monetary policies to see if there are any possible changes that can be made. After that, the President, along with Offices of Management and Budget, comes together and decide on the fiscal policies.

Effects of Fiscal Policies

The effects of fiscal policies on the economy’s production and employment are that it can be a positive change towards

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