AACSB ASSESSMENT Essay Example | Topics and Well Written Essays - 500 words

AACSB ASSESSMENT - Essay ExampleThe root worry for Fed is the decreasing gross domestic product this is because once the GDP starts decreasing there are a number of negative consequences that will be apparent. In the calculation of the real number GDP using where GDP=C + I + G + (Ex - Im) where the (Ex - Im) represents the terminate exports which as shown by the formula could either be negative or prescribed (Parkin 2005). In this case, if it is positive, because the countrys GDP increases and vice versa when it is negative. It is the duty of the Fed to ensure that the GDP is always positive since it has a direct impact on the countrys economy. In this case, the GDP has decreased by 6.3 %, this decrease has a direct effect on the labor market and the country as well. The prize of a countrys production is measured by its GDP and hence a inclination in the GDP means that there will be unemployment increase as obvious in this case, household incomes decrease, decrease in busines s profits and increase in the number of bankruptcies as evident by the mortgage defaults experienced in this case.Based on the facts analyzed above, the consequences demonstrated in the above case are as a result of the decline in the GDP and hence the first worry for the Fed. The Fed should thus not worry about the increasing unemployment rate, mortgage defaults and even college dropout save rather worry about the GDP by creating a stimulus plan that will put up the GDP which will then translate to the a higher purchasing power for the countrys citizens (Parkin 2005).In order to save the economy of the country, there is no one only way of accomplishing the parturiency but rather a delicate balance between regulation of open market doing and adjustments of countrys fiscal policies. The rationale for this is because of the cumulative contribution of various factors towards the drop in the real GDP and hence the increased