Growth and GDP.docx - 3 Goals of Economic Growth Economic...

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3 Goals of Economic Growth:Economic Growth:The overall output of goods and services increases over time.Full Employment:All eligible people who want to work can find employment at current wage rates.Price Stability:This means there is no inflation, where the general level of prices increases, or deflation, where the general level of prices decreases. Price stability provides a favorable economic climate for consumers and businesses.Fiscal policies involve using national budget to change taxation rate and total national spending.The fiscal policy that increases aggregate spending is calledexpansionary fiscal policy,while policy that reduces aggregate spending is calledcontractionary fiscal policy.a household’sdisposable incomeincludes payments received from employment, interest, profits, and transfers. (all money left over after taxes)Consumer Price Index (CPI) isa measure of the average prices paid by theaverage urban American household (includes the prices of housing, food, clothing,transportation, and other commonly purchased goodsand services)Producer Price Index (PPI)measures not only the price at which sellers sell consumer goods but also the intermediary products such as raw materials and factors of production.

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