Question

We have just covered big chapters in economics in talking about GDP and the idea of fiscal restraints and fiscal stimulus policies. What is the current USA GDP? Has it grown recently, or has it fallen? Search the internet and compare over the last quarter to 6-months.

Also, we still have a relatively new Administration in office. What are the fiscal policy ideas that may take place? Fiscal restraint, or stimulus? How will the new tax code affect things? The budget? What affect on GDP may they have? Any downsides?

Post your resources and remember this is not a political conversation. This is to stimulate your mind to think about where we are economically and where we may head in the near future given new economic policies being brought forth. You do not need to answer every question above, but touch on a few and discuss.

Answer 1

Answer:

The current USA GDP is:

Current dollar GDP increased by 5.3 per cent, or $253.50 billion in the fourth quarter to $19.754.1 billion.

it grown recently, or has it fallen:

It has grown in the recent quarters. It has increased compared to the last quarter.

the fiscal policy ideas that may take place:

There is emphasis on expansionary fiscal policy of the government of the government.

Thus, fiscal stimulus is preferred.

The new tax code has brought tax cuts and thus will make the goods less expensive and thus increase overall aggregate demand in the economy.

It might increase budget deficit as tax revenue of the government declines.

This increases aggregate demand and thus will increase the GDP growth rate in the economy.

It might increase interest rate which lead to fall in domestic investment.

This is called as crowding out effect of fiscal policy.