Business_Memo

MEMORANDUM TO: FROM: DATE: SUBJECT: Measuring Economic Health Memo Gross Domestic Product (GDP) is the measure of an economy adopted by the united Stated, the total market values of goods and services produced by workers and capital within a nation's borders during a given period, which is known as yearly or quarterly. Describe the use of GDP to measure the business cycle. Gross Domestic Product is known as the crossing point of three sides of the economy: expenditure, output, and income. (/www.economicswebinstitute.org). The federal government organizes pieces of monthly, quarterly, and annual data from government agencies, companies, and private individuals into hundreds of statistics, such as the consumer price index (CPI), the employment report, and summaries of corporate and individual tax returns. The U.S. Department of Commerce then marshals the source data into a complete set of statistics known as the National Income and Product Accounts. Describe the roles of government bodies that determine the national fiscal policies. There are several government agencies who determine national fiscal policies to stabilize the country’s economy. These agencies deal with tax and interest rates and government spending, in an effort to control the economy. Answering to the Congress the Federal Reserve regulates the supply of money which helps control and keeps down inflation. The Federal Reserve Act sets forth the goals of monetary policy, specifically "to promote effectively the goals of maximum employment, stable prices, and moderate long-term interest rates. Financial stability is an important prerequisite for achieving those goals. The Internal Revenue Service or IRS deals with the taxation of the citizens. The IRS is also in charge of setting up the sales taxes for goods and services taking place in America. The government agency changes policies it can positively or negatively affect the economy’s production and employment rates. The increase in demand for these products with help from the government will create more projects for these businesses to take on. The U.S. government may also changes policies such as increase spending on more green products and give tax breaks for businesses who build green products. A bill that passes the Senate can make or break a sector which deals in creating green products. Explain the effect of fiscal policies on the economy’s production and employment. How do changes in government spending and taxes positively or negatively affect the economy’s production and employment' It is said the fiscal policy decision have a widespread in our everyday behavior and decisions in our households as well as our business. It is stated that one of the fiscal policy component is taxation. Taxation is when the interest increase which makes the net income go down, to were as a decrease in taxes may lead to domestic hiring and lesser black market labor. “Equally, it is important to note that changes in taxation policies, as a part of the fiscal monetary policy, can have significant effects on the intensity of employment market, and overall efficiency and productivity. The fiscal monetary policy of the government plays a crucial role on employment factors”. If government spending and a reduction in taxes are utilized properly, then the economy is positively impacted. Usually, these two components are conglomerated together in a package called a Fiscal Policy.