Measuring Economic Health Memo Essay Example | Topics and Well Written Essays - 500 words

Measuring Economic Health Memo - Essay slipSimilarly, availability of credit, bullion, and business investment also play a vital role in act the business cycle. The difference between actual GDP and potential GDP constitutes GDP opening. If the GDP gap is a positive number, it is known as inflationary gap and is stated as the direct recital of inflation. In contrast, during the times of deflation, the GDP gap shows a negative number and it is called recessionary gap. In the another(prenominal) phases of business cycle, the output gap differs accordingly. In order to stabilize a countrys economy, contrasting governmental agencies al guidances deal with populational fiscal policies. A national fiscal policy refers to the way in which a government plans its expenditure and taxation so as to influence the economy. For this purpose, as Ambekar (n.d.) points out, the regulators (governmental agencies) generally deal with tax, interest rates, and government spending since these fac tors have a direct impact on nations economy. The Federal Reserve is the main regulator of United States, which largely focuses on the supply of money as it a fruitful method to keep the inflation down. The concerned government agencies will be always in touch with countrys economic trends.