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Write 6 pages with APA style on Economic Indicators. This paper discusses the subject of fiscal policy based on the simulation Evaluating Fiscal Policy Alternative in which the player plays the role o
Write 6 pages with APA style on Economic Indicators. This paper discusses the subject of fiscal policy based on the simulation Evaluating Fiscal Policy Alternative in which the player plays the role of president of the nation of Erehwon.
The gross domestic product of a nation measures the overall output of the economy. The most commonly used method to calculate GDP is the expenditure approach which is the sum of four variables: consumption, investment, governmental spending, and net exports (Quickmba, 2009). One of the objectives of any economic system is to achieve the higher possible gross domestic product which determines economic growth. The reason a higher gross domestic product in general terms is a favorable condition is that it raises the standard of living of the population. An economic metric that better illustrates the actual wealth of the inhabitants of a nation is GDP per capita which takes into consideration the population variable (GDP) population). As the president of a country with a low GDP per capita of $1,300, a figure comparable to the economic condition of Sri Lanka in 2006, my fiscal policy decisions are going to be tough (Finfacts, 2009). The aggregate demand/supply framework will be needed to facilitate my decision-making process.
The simulation starts me governing Erehwon in the year 2003. Two of my executives are proving me with recommendations and advice along the way. The country is currently facing a recession. My first and top concerns based on the principles of the aggregate demand and supply framework are too pay close attention to the twin evil of macroeconomics which is unemployment and inflation. The two biggest problems the economy is facing is a rising unemployment rate and low levels of consumer confidence. Problems with these two macroeconomics variables at Erehwon are similar to what is occurring in the US .economy right now which is in the middle of a recession in 2009. .
