Essay on Economic Impact Of Gross Domestic Product Statistics

828 Words Nov 16th, 2015 4 Pages
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. Through these fiscal policies, regulators attempt to recover unemployment rates, regulate inflation, stabilize business cycles and impact interest rates in an effort to regulate the economy (Rittenberg & Tregarthen, 2015). Fiscal policy is mostly founded on the ideas of British economist John Maynard Keynes (1883–1946), who alleged governments could alter economic performance by adjusting tax rates and government spending. When the government decides on the goods and services it purchases, the transfer expenditures it distributes, or the duties it collects, it is engaging in fiscal policy. The chief economic influence of any change in the government financial plan is felt by specific groups—a tax cut for families, for example, increases…

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