Monetary Policy Essay

University of Phoenix | To: | ECO/212 | From: | [Your name] | CC: | [Recipient names] | Date: | | Re: | Economic Health & Federal Reserve | | |
The Business Cycle
Economic growth tends to show a pattern as follows: an expansion of above-average growth, a peak, a contraction of below-average growth, and a trough or low-point. The troughs are followed by periods of expansion and this cycle normally repeats itself. These types of fluctuations are known as the business cycle (Economics. The Business Cycle.1999-2010).

Gross Domestic Product (GDP) Because the business cycle is associated with add-on economic work, a well know pointer of the business cycle in this country is the Gross Domestic Product, or GDP. A recession is consisted of two back to back quarters showing negative GDP growth. Because of this, GDP is the fastest and easiest way to show economic contractions (Economics. The Business Cycle.1999-2010). Government Bodies & National Fiscal Policies The four bodies involved in the national fiscal policies are the Department of Treasury, the Office of management and budget, the office of the president and the government accountability. The most important of the four is the Dept. of Treasury because it is the one that designs and manages the fiscal policy. This department is also in charge of the financial accounts and determines where and what needs spending on. The next section analyzes and develops fiscal policy along with the dept. of treasury and helps the same make decisions regarding where the money should be spent (What Government Bodies Determine National Fiscal Policies?) Although the dept. of treasury is the most important, the President’s office also has a say when it comes to decision making regarding fiscal policy. Because he is the country’s leader he can either propose and/or reject changes in the policy. Like any other business, the fiscal policy needs to be overlooked. The accountability office audits the policy and looks for issues and sometimes creates them spent (What Government Bodies Determine National Fiscal Policies?)

Employment Fiscal & Policies Taxation is a component of fiscal policy. When taxes increase the net income decreases. Businesses closely look at labor force value and factors of profitability in comparison to return on investment using it for technology. This is done on the inside. On the other hand, people may see an increase in tax as a form of punishment, which

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