memo - MEASURINGECONOMICHEALTH 1 Measuring Economic Health...

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MEASURING ECONOMIC HEALTH 1 Measuring Economic Health Memo Mandy Knife ECO/212 September 13, 2010 L. Torres
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MEASURING ECONOMIC HEALTH 2 Measuring Economic Health The Gross Domestic Product is essential in the business cycle for many reasons. The GDP is the measure of the total market value of final goods and services produced within one year. GDP is the value of what has been produced in the economy over the year, not what was actually sold. Real GDP is the best measure of economic activity, so business cycles are usually illustrated us- ing movements in real GDP. During the expansion phase of the business cycle, employment and income increase. The expansion ends with a business cycle peak. Following that peak, produc- tion, employment, and income decline as the economy enters a recession. Recessions end with a business cycle trough. This begins an expansionary cycle. Each business cycle is different. The lengths of expansion and recession phases differ each time. The best way to tell if the economy
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This note was uploaded on 11/25/2010 for the course MGT MGT 216 taught by Professor Valesquez,m during the Spring '09 term at University of Phoenix.

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memo - MEASURINGECONOMICHEALTH 1 Measuring Economic Health...

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