Evaluate_the_Effects_of_Government_Policy_on_Economic_Behavior.

Gross Domestic Policy is responsible to look at total income. GDP measures two things simultaneously which are the total income of all individuals in the economy and total expenditure on the economy’s output of goods and services. The success of this measurement is the fact that all income must be equal to all expenditures. In this process, annual household incomes are recorded as well as the amount of that income that is spent An example of this process would reflect myself as a buyer of a hair color service and the seller of the salon in which I received this service. As I paid for the service, the money received by the business owner pays the expenses incurred in providing this service and the money is placed back into the market. Government bodies determine national fiscal policies in effort to stabilize the country’s economy. The government bodies deal with tax, interest rates, and government spending. The Federal Reserve is also a factor in controlling the economy in an effort to control inflation. The country’s economy is balanced by government bureaus who decide national fiscal policies. Interest rates, taxes, and government spending are ways that these bureaus try to deal with regulating the economy. The Internal Revenue Service (IRS) is a department of the American Government that all working Americans are well aware of.   This bureau of the government is in charge of making sure that everyone pays their share of taxes.   They also help incorporate new tax laws.   The Federal Trade Commission (FTC) oversees anti-trust in mergers, credit and loans, and regulate debt collection.   The FTC is there to protect citizens from identity theft Fiscal policies affect the economy’s production and employment when the economy is stimulated to produce or when the economy is driving to recede. The adjustments of the various fiscal policies set the direction of a positive or negative outcome. Changes in government spending and taxes impact the economy’s production and employment by increasing production upon the reduction of taxes and implementing more money into the economy. Production may be decreased upon the raising of taxes and the restriction of money within the economy. GDP, fiscal policies and government spending are all correlated to one another. These tools and key aspects of the government assist in determining the state of the economy at that given period of time. With the tools that the government is capable of using, the government has some power and control over the determination of the direction the state of the economy.