Measuring Economic Health
Gross Domestic Product is the value of a country’s overall output of goods and services (typically during one fiscal year) at market prices, excluding net income from abroad. (BusinessDictionary.com, 2011) Now when referring to the business cycle and Gross Domestic Product, government spending is the key. The money that is spent on all goods and services are calculated to figure the Gross Domestic Product. But the three different way to estimate Gross Domestic Product are 1) Expenditure basis. 2) Output basis. 3) Income basis.
The four government bodies that are involved in the national fiscal policies are Department of Treasury, Office of management and budget, Office of the President, and Government accountability. The Department of Treasury is in charge of the financial accounts for the government. The office of management and budget helps the department of treasury with research with new policies that are needed. The President is the leader of the country and proposes changes to policies and reject policies. The government accountability office over see the different issues that occurs when the treasury breaks the policies.
Fiscal policies affect the economy when there is an increase in spending and if there is not enough spending. When the demands are up, there are a lot of jobs and unemployment is down. When then demand is down, unemployment rises and jobs are lost. When the government