GDP and the Business Cycle; Government Financial Bodies, How Fiscal Policies Impact Production and Employment

This memo will address three issues commonly discussed when talking about the economy. First, it will explain and describe how gross domestic product can be used to measure the business cycle. Second, it will describe the roles of the government bodies that are responsible for determining national fiscal policies. Third, it will explain how national fiscal policies impact the economy's production and employment. Specifically, it will examine how changes in government spending and taxing impact the economy's production and employment. Considered together, these three explanations should lead to a better understanding of fiscal policy at a national level.

Gross domestic product (GDP) is the monetary value of all of the finished goods and services that are produced in a country within a specific time period, usually each year. It includes all items, whether produced or...
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