Assigment Essay Example | Topics and Well Written Essays - 1000 words - 1

Assigment - Essay Example The general assumption is that wealth is equally distributed among the citizens yet it is a few individuals who are rich. Secondly, the quality of goods and services that comprises the output and externalities like pollution are not taken into consideration. In addition, increase in output may be attributed to long working hours with less leisure time. There is a lot of money in the black economy like prostitution, which is not included in the GDP computation. Non-market transactions such as volunteer and household chores are also not included. Sustainability of growth is not considered in the calculation of GDP because the country may have exploited its resources hence increasing its GDP. b) % change in nominal GDP is calculated by change in the GDP *100; from 1981 to 1991 and 1991 to 2001 , the nominal GDP has changed by 91.18% and 70.50% respectively while the real GDP has changed by 43.75% from 1981 to 1991 and by 21.96% from 1991 to 2001. (b) The last few years after the crisis have witnessed a gradual decline in productivity growth and the situation may persist for much longer (Orszag). Projections indicate that the trend is likely to persist for a much longer period. One of the reasons behind the slowdown in productivity growth is the fact that a significant percentage of the population is not engaged in active productive engagements. An aging population has also been cited as one of the reasons behind the slump in productivity. The author points out that workers usually display less enthusiasm and productivity after a crisis. The impact of the crisis manifests at the level of confidence on the part of the workers as many of them become affected by insecurities that hamper their capacity to produce. The studies indicate that the levels of productivity have been going down even before the crisis reached its peak in

Journal opinion article Essay Example | Topics and Well Written Essays - 750 words - 1

Journal opinion article - Essay Example In earlier years, the government followed the policy of increased government expenditure and public debt in order to boost the aggregate demand in the economy of the country. The fiscal policy of the government embraced budget deficits in order to fuel the GDP growth rates of the country. An examination of the demand supply curve would help to explain the previous fiscal policy of the government. With the increase in government spending, the flow of money in the economy increased leading to higher purchasing power which boosted the demand of the market. Thus the demand line shifted upwards as shown in the graphical representation. In order to maintain equilibrium in the markets, the private investments and production in the economy rose thereby resulting in increased GDP growth rates. As a result of the increase in demand against the prevailing supply in the market, the prices of goods and services also increased. With the occurrence of financial recession, the production level in th e economy fell and thus due to the fall of supply in comparison to the demand, inflation cropped up. The slowdown of the economy of US resulted in job cuts and increase in unemployment rates which cropped up to even 9.1% in the periods after the financial crisis. Along with the plunge in economic performance, the displacement in the position of equilibrium resulted in the hike in prices of goods and services. This prompted a change in the policies of the government of US. The occurrence of economic depression highlighted the drawbacks of Keynesian economic policies of increasing government expenditure in order to boost the demand of the economy. In doing so, the US government incurred a deficit of $ 1 trillion (Elwell 50). Thus the fiscal policies adopted by the US government were framed with an objective to achieve economic consolidation and reduce budgetary deficits. After the presidential election of 2012 in US, the democrat government in US adopted the policy of reducing the gov ernment expenditures in order to control the budgetary deficits. The government decided to impose cuts on the military budgets while spending on areas like health care and education. The budgetary deficits have been reduced and it is forecasted that the government would keep the deficit under control in near future. In order to stabilize the economic scenario of the country and to neutralize the effect of decline in government spending, the revenue collection of the government was also decreased by adopting fiscal policies of tax reduction. This fiscal policy of the government is likely to continue in future till the time the economic position of the country is revived. The taxes have earned the highest revenues for the country through ages. The government strategically adopted the policy of reducing the collections through taxes in order to maintain a balance with the reduction of government spending. Leaving the conventional path of boosting private investments though government e xpenditures, the US government focused on the growth of the middle class and the labor markets, thereby encouraging the services industry. In order to reduce unemployment in the country, the government has brought new legislations on outsourcing. The unemployment rates have decreased comparatively post 2012 from 8.3% to 7.6%. In order to gain economic revival, the government has almost doubled its exports in order to tap the opportunities of overseas markets. The growth in exports of