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How GDP varies with the business cycle

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Measuring Economic Health Memo

Prepare a 350-700-word memo addressing the following:

a. Describe the use of Gross Domestic Policy (GDP) to measure the business cycle.
b. Describe the roles of government bodies that determine national fiscal policies.
c. Explain the effects of fiscal policies on the economy's production and employment. How do changes in government spending and taxes positively or negatively impact the economy's production and employment?

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GDP increases during the expansionary phases of business cycle and falls during the contractionary phase. Thus when we see GDP cease growing, it indicates the business cycle is at its peak, and a contraction may occur soon. Then we watch for a the decline to slow and stop. This signals the recovery phase, and a possible expansion soon to follow. In fact, it is these changes in the growth of GDP that define each phase of the business cycle.

The President begins the process of enacting fiscal laws by preparing a budget request which includes tax rates and program ...

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Measuring Economic Health Memo