The Fiscal Policy and its Impact on the GDP Essay

Fiscal Policy Often when one thinks of the scope of business, running a country rarely enters into an individual’s mind. However; that is what the country is, a large business conglomerate for an entire country. Citizens entrust their government to maintain this feat. There are many intricate details in maintaining the nation’s financial and economic health. In the United States, the President and Congress govern the financial and economic health of the nation. The United States employs the fiscal policy to monitor and make deliberate changes to escalate or slow down the country’s economy. The fiscal policy process occurs via changing government expenditures and taxes that have a direct impact on the nation’s Gross Domestic Product†¦show more content†¦With deficits and debts rising at an exponential rate, the future for Social Security and Medicare does not look very promising. As deficits and debts grow, the more money the government needs to borrow an d the less able they are to pay back these loans. Unemployed Individuals U.S. deficit, surplus and debt have a large effect on the unemployed, with a deficit, there is less money circulating in the market that may cause production to decrease meaning that there will be less manpower needed for production and service. One of the biggest deficits that impacts unemployment is the trade deficit, White House estimates show that, for every $1 billion in goods exported, the economy creates 5,000 jobs. Unfortunately, that street goes both ways — data from the Economic Policy Institute shows that, for every $1 billion in goods imported, the economy loses 9,000 job (Economy in Crisis, 2014). With a surplus, there is more production than there is demand, which forces organizations to lower their selling prices to get rid of surplus stock. Firms may lay off employees, because they are not making a profit and one way to reduce overhead costs is to diminish the work force. With a debt, money that could be circulated within the market to help increase jobs, is now being spent on the debt. University of Phoenix student With all the pressures of being aShow MoreRelatedRelationship between Real GDP Growth and Transfer Payments Essay1101 Words   |  5 Pagescompensation). In this paper, we attempt to analyze the effect, if any, that transfer payments have had on real GDP growth in the last 30 years. In addition, we will also set to analyze the effectiveness of monetary and fiscal policy. 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