Compose a 250 words essay on Lower Division Capstone. Needs to be plagiarism free!(Barro, 2008)GDP is a very important factor which tells the state of an economy. Recession is usually around the corne
Compose a 250 words essay on Lower Division Capstone. Needs to be plagiarism free!
GDP is a very important factor which tells the state of an economy. Recession is usually around the corner when GDP has been shrinking for two quarters in a row. Country is usually seen to be recovering back from recession when GDP starts growing again. A high GDP growth country usually attracts a lot of investments.
GDP per capita is regarded as an indicator of the overall well being of the citizens of a country. China and India have high GDPs but their GDP per capita is low which is consistent with the millions of poor and malnourished in these countries.
The output composition of GDP gives an indication of the type of economy that a country has. A country following an aggressive form of development is most likely to be spending most on investment and very little on consumption. If the GDP data is collected according to various industrial and sectoral categories we can get great insights into the composition of the economy.
Normally after a recession just like the one that the country recently witnesses we expect a period of renewal with a high GDP growth .But this time the GDP growth rate has been very lackluster which has raised fears of a double dip recession.GDP as well as total consumer spending in US has declined sharply during the first quarter of 2011 as can be seen from the graph below.
The crisis that started a few years ago was largely due to the housing bubble. The great news is that the debt has been reducing continuously and has now reached levels of 1980s and 90s.The burden of debt at present is not too high and will certainly not hamper growth to a large extent (Tilton, August 2011).
Household and auto sector were one of the most severely hit sectors during recession. However these sectors are cyclic in nature and are expected to regain some of their lost vigour.This will certainly help in boosting the economy of the country. (Tilton, August 2011)
The high deficit of the US government