Measuring Economic Health Memo

ToFromCCDateSubject How gross domestic product is used to measure wrinkle cycleBusiness cycles are frugal fluctuations . Business cycle phases include the recession , depression , reaping , and expand . Recession and depression phases are characterized by measly production , decrease in investments decrease in gross domestic product , and adjoin of unemployment . Economic fluctuations correspond to business changes . Growth and boom phases are characterized by growth in gross domestic product , increase in employment and investments-economic indicators are desirable . GDP is integrity of the economic indicators that are used to determine at which business cycle phase an scrimping is at and is heading to . GDP is usually used to monitor short-run changes in the economy since it is the most comprehensive measure of economic activity It measures goods and serve produced within a country at a specify period , usually one year . Growth in GDP leads to increase in per capita income . When per capita income increases economic agents purchasing berth bequeath increase .

This leave alone increase demand for goods and serve in the market . Increase in demand is a great relief to the business . In case the GDP falls , it means that per capita income will reduce the economic agents will have tight budget constraints , decrease their consumption which will venture demand for goods and services . This will adversely affect the business operations . Investments are likely to reduce and numerous businesses quit from operations (Mankiw 2008740Role of Government bodies that Determine national financial policiesGovernment bodies that determine national fiscal policies has...If you want to get a full essay, order it on our website: Orderessay

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