Fiscal Policy On Employment, Potential Gdp, And The...

In Foundations of Macroeconomics Seventh Edition by Bade and Parkin, chapter sixteen is titled Fiscal Policy. There are three objects for the chapter. The first object is to be able to â€Å"describe the federal budget process and the history of tax revenues, outlays, deficits, and debts†. The second object is to â€Å"explain how fiscal stimulus is used to fight a recession†. The third objective is to â€Å"explain the supply-side effects of fiscal policy on employment, potential GDP, and the economic growth rate†. The federal budget has two main reasons it was created. The first is to fund the activities of the federal government. The second was and still is to attain macroeconomic objectives. In order to create the Federal Budget, the President of the United States is to propose a budget for the next year to Congress by each February. Next, the House and Senate proceed to go back and forth to determine a series of spending acts and overall budget. Afte r everything is determined Congress will then pass the budget in September. The President then can sign the acts into law or veto the entire bill because he does not have the ability to veto certain parts of the act. The way to determine the government’s budget balance is to subtract the outlays from tax revenues. If the tax revenue is equal to the outlays, there will be a balanced budget for the government. If the tax revenue is less than the outlays, there will be a budget deficit for the government’s federal budget. If theShow MoreRelatedMacro Economics - Business Cycles1410 Words   |  6 Pagesââ€" º The value of real GDP over time shows periodic fluctuations in its movement ââ€" º The business cycle refers to the periodic fluctuations of economic activity about its long term growth trend ââ€" º The Business cycle is the more or less regular pattern of expansion (recovery) and contraction (recession) in economic activity around the path of trend growth. ï‚ § At cyclical peak, economic activity is high relative to trend ï‚ § At a cyclical trough, the low point in economic activity is reachedRead MoreThe Economic Crisis Of The United States1084 Words   |  5 Pagessay that the US economy is climbing out of the recession and becoming more stable. Yes,the economy is changing, the unemployment rate is getting better, the GDP is showing a positive increase and the inflation rated is currently at 1.7% which are all indicators that the economy is getting better. 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Countries grwo at different rates, this is partly due to the fact that they are at different stages of their economic cycle. The economic growth for the UK is at 0.2%. The main measure of output is gross domestic product (GDP). GDP is the total value of goods and services produced in an economy during one year. Economic growth