Measuring Economic Health Paper
Measuring Economic Health Paper
Measuring Economic Health and Fiscal Policy paper
The (GDP) is the most importance measure of the total goods and services in the U.S. economy today and it represents the total summary of the world 's best system of economic statistics. The United States government organizes pieces of monthly, quarterly, and annual data from government agencies, corporations, and private citizens into thousand of statistics, such as the consumer price index (CPI), employment reports, corporations and individual tax returns. The department of commerce then put together the data into a complete set of statistics known as the National Income and Product Accounts that provide detailed information of production in the United States (GDP) and its associated national income. The federal government has the power to change and make new laws, thus having a major role and influence on the United States business climate.
One method for measuring production is the Expenditure Method. In a capitalistic society most things are produced for sale, therefore, measuring the total expenditure of money is a way of measuring production. For example, knitting a sweater for your self is production, but it doesn’t get counted as GDP because it is never sold. Therefore if you count unpaid services such as cooking, cleaning, child rearing, and do-it yourself repairs as production, GDP stops being an accurate indicator of production. Likewise, if there is a long term shift from unpaid provisions of services to market, the trend toward increased market provisions of services may cloud the decrease in actual domestic production, resulting in an inflated reported GDP. This is especially a problem for economies which have shifted from production to service economies.
The Federal Government has the power to oversee areas declaring Congressional laws, Federal income taxes, trade, etc. The United States Federal Government provides the legal and
Measuring Economic Health and Fiscal Policy paper
The (GDP) is the most importance measure of the total goods and services in the U.S. economy today and it represents the total summary of the world 's best system of economic statistics. The United States government organizes pieces of monthly, quarterly, and annual data from government agencies, corporations, and private citizens into thousand of statistics, such as the consumer price index (CPI), employment reports, corporations and individual tax returns. The department of commerce then put together the data into a complete set of statistics known as the National Income and Product Accounts that provide detailed information of production in the United States (GDP) and its associated national income. The federal government has the power to change and make new laws, thus having a major role and influence on the United States business climate.
One method for measuring production is the Expenditure Method. In a capitalistic society most things are produced for sale, therefore, measuring the total expenditure of money is a way of measuring production. For example, knitting a sweater for your self is production, but it doesn’t get counted as GDP because it is never sold. Therefore if you count unpaid services such as cooking, cleaning, child rearing, and do-it yourself repairs as production, GDP stops being an accurate indicator of production. Likewise, if there is a long term shift from unpaid provisions of services to market, the trend toward increased market provisions of services may cloud the decrease in actual domestic production, resulting in an inflated reported GDP. This is especially a problem for economies which have shifted from production to service economies.
The Federal Government has the power to oversee areas declaring Congressional laws, Federal income taxes, trade, etc. The United States Federal Government provides the legal and
References: Jenny Reed D.C. fiscal policy institute retrieved December 6, 2010 www.http: //dcfpi.org