Individual Response Assignment 4 18 12 Essay

Individual Response Assignment
Steven C. Figueroa
University of Phoenix
ECO/372
Michael Coffey
April 18, 2012

Individual Response Assignment
The term “National Debt” is defined as the total amount of debt that the Federal Government has on its books. The National Deficit is identified when the Federal Government spends more money than it has, thus creating a deficit. For example, if the Federal Government has 600 billion dollars for the year and it spends 700 billion dollars in that year than it has created a 100 billion dollar deficit. This deficit can be deducted from the books if the Federal Government has money saved to pay off the deficit, otherwise the deficit will be paid off with a loan therefore making it debt. The Federal Government owns the debt, but the American people pay for it through taxes. To be concerned about the National Debt is silly, because personally I cannot control Government spending or the tax system in which the Government accumulates funding. The National Debt may someday affect my life in terms of how I will spend my money and how the countries financial landscape will look due to an increased foreign presence. The current National Debt does not scare me but instead leads me to believe that the United States is still very functional even though the last ten years the country has been at war. The country has also suffered through a recession and an increased unemployment rate. In spite of all of these setbacks the United States has continued to move forward and try to establish new ground rather than just recover lost ground.
The Growth Domestic Product is the primary indicator to determine the health of the country’s economy. Governments are concerned about the GDP because it reflects on their jobs and in what direction they are leading the nation. The GDP helps to reveal where problems and successes are in the country’s economy. The GDP roughly gives a general landscape of how the country’s economy has performed for the last year or measuring period. Information from the GDP can expose unemployment rate, industrial growth, government spending, imports and exports, etc. All of this information is helpful for reflecting the results of previous actions, ideas, and/or laws. This GDP does not provide solutions to the country’s problem but rather a reference as to what the previous actions have resulted in, a positive or negative impact. This type of information is only useful if a government is willing to address the issues instead of just identifying the issues.
Inflation is the level at which the price for services and goods is rising and the purchasing power is deflating. For example, if the inflation rate is 2% than a soda costing $1 last year will cost $1.02 this year, thus decreasing the buying power of the dollar. Inflation is measured by accumulating a number of goods that represent the economy and comparing their cost over time. By doing this a price index is created and a rate will be set for the following year. Inflation happens when there is a monetary inflation through loans, raises, or increased employment. When people have more money to spend they make more purchases of goods or services. When consumption is increased it affects the demand of the market therefore limiting supply and causing the goods and services price to

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