Gross domestic product statistics are the broadest gauge of economic activity, the official designation of a recession is based on the following monthly measures: employment rates, individual income figures, industrial production breakdown, and the national GDP quarterly trends (U.S. Department of Commerce, 2015). A recession is a word used by economists in order to classify a time in which the GDP has declined for two or more consecutive quarters. During a recession, production capacity shocks trigger unemployment, leading to decreased personal income, which in turn causes low consumer demand; and lower consumer spending means negative GDP trends.
Fiscal policies are government expenditure policies that impact macroeconomic conditions. …show more content…
Department of Commerce, 2015). For the United States, the Federal Reserve is the regulatory faction that is in charge of the money supply & policy. Monetary policies are demand-side macroeconomic policies (Rittenberg & Tregarthen, 2015). Stimulation or the discouragement of spending on goods and services are the normal routes of these policies. Entire economy recessions and booms mirror variations in aggregate demand relatively more than in the economy’s industrious capacity. Monetary policy attempts to lower, perhaps even eliminate, those …show more content…
During this period, the unemployment rate skyrocketed more rapidly than in previous recessions to a staggering 9.7 percent and establishment birth and deaths, meaning the opening or birth of a business and the closing or death of a business, lead to a decrease of over 60,000 institutions (Unknown, 2012). This then led to the reduction in consumer spending within all major categories, apart from healthcare (Unknown, 2012). In response to the rapid economic decline of the nation, the United States government implemented fiscal and monetary policies in order to ease the economic adversities. With this downturn of the economy so rapidly, the Federal government reacted fairly quickly by implementing fiscal policy in February of 2008, by the stimulus package that goes by the name “Economic Stimulus Act of 2008” (110th Congress, 2008). This stimulus package endorsed over $152,000,000,000 towards tax rebates of up to $1200 per family and business incentive tax credits in mere hopes of imparting more dollars into the economy and tempting consumers to spend that “extra”
Fiscal policies are government expenditure policies that impact macroeconomic conditions. …show more content…
Department of Commerce, 2015). For the United States, the Federal Reserve is the regulatory faction that is in charge of the money supply & policy. Monetary policies are demand-side macroeconomic policies (Rittenberg & Tregarthen, 2015). Stimulation or the discouragement of spending on goods and services are the normal routes of these policies. Entire economy recessions and booms mirror variations in aggregate demand relatively more than in the economy’s industrious capacity. Monetary policy attempts to lower, perhaps even eliminate, those …show more content…
During this period, the unemployment rate skyrocketed more rapidly than in previous recessions to a staggering 9.7 percent and establishment birth and deaths, meaning the opening or birth of a business and the closing or death of a business, lead to a decrease of over 60,000 institutions (Unknown, 2012). This then led to the reduction in consumer spending within all major categories, apart from healthcare (Unknown, 2012). In response to the rapid economic decline of the nation, the United States government implemented fiscal and monetary policies in order to ease the economic adversities. With this downturn of the economy so rapidly, the Federal government reacted fairly quickly by implementing fiscal policy in February of 2008, by the stimulus package that goes by the name “Economic Stimulus Act of 2008” (110th Congress, 2008). This stimulus package endorsed over $152,000,000,000 towards tax rebates of up to $1200 per family and business incentive tax credits in mere hopes of imparting more dollars into the economy and tempting consumers to spend that “extra”