Here is the synopsis of our sample research paper on IMPACT OF FISCAL POLICY ON THE GROSS DOMESTIC PRODUCT
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Essay / Research Paper Abstract
This 5 page paper discusses the impact of policies made by the federal government on the gross domestic product. Issue examined is how the increase of minimum wage worked using the Keynesian model. Bibliography lists 2 sources.
Page Count:
5 pages (~225 words per page)
File: D0_MBfiscal.rtf
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Unformatted sample text from the term paper:
economists scrambled for a solution to pull the country out of its troubles. What would emerge would be the Keynesian model. The impact of fiscal policy on the gross domestic
product can still be used today to study the fluctuations and make better predictions of market economy. One of the factors which contributed to the crash in 1929 was the
significant increase in unemployment, which was viewed as an excess supply of labor. Since it is virtually impossible to have excess supply AND equilibrium at the same time utilizing the
classical theories, a change was needed. For example, if there is unemployment, then employment is not determined by supply and demand like a real product, since supply and demand are
never in equilibrium. What baffled economists of the time was how to view employment. It quite clearly was not a commodity since they could not determine how employment could drop
in all industries at the same time. Maynard Keynes book, The General Theory of Employment, Interest and Money, which changed the direction of economics and created the new subfield of
"macroeconomics"(**). For the sake of this discussion we will limit ourselves to the Hicks-Hansen interpretation of the Keynesian model. Keynes produced a model that could explain unemployment as an economic
equilibrium. Economists are still arguing over whether the model, but it does give an explanation of unemployment in terms of insufficient aggregate demand(**). The impact of fiscal policy on gross
domestic product, then, is obvious. Any fiscal policy which impacts the employment possibilities also impacts positively and negatively the amount of product produced and consumed. An examination of one such
policy follows. Recently, Congress decided to increase the minimum wage from five dollars and fifteen cents to six, sixty-five per hour. The Fair Labor Standards Act, which was established in
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