Apply It 2.4: Macroeconomics

  • Explain how gross domestic product (GDP) is used to evaluate the health of an economy
  • Distinguish between monetary and fiscal policy

Economic Growth

Employment

Line graph titled "All Employees, Feb 2020 = 100" showing employment trends for three sectors—Government, Goods-Producing, and Private Service-Providing—from February 2020 to January 2025. The x-axis represents time, ranging from Feb 2020 to Jan 2025. The y-axis shows an index with a base of 100 in Feb 2020, ranging from 80 to 110.    Three colored lines represent different employment sectors:    Blue Line (Government): Declines sharply in early 2020 to below 95, remains relatively flat through 2021 and 2022, then gradually increases, reaching just above 100 by early 2025.    Purple Line (Goods-Producing): Falls to about 88 in early 2020, then steadily rises and surpasses the 100 baseline around early 2022, continuing to increase moderately to about 104 by early 2025.    Red Line (Private Service-Providing): Drops most sharply to about 83 in early 2020, then recovers steadily, surpasses 100 around mid-2022, and climbs to nearly 107 by early 2025.
U.S. Employment from February 2020 to January 2025.

FRED® Graphs ©Federal Reserve Bank of St. Louis. 2022. All rights reserved. All FRED® Graphs appear courtesy of Federal Reserve Bank of St. Louis. https://fred.stlouisfed.org/

Monetary and Fiscal Policy

The national debt is an issue debated not only in Congress, but by the public as well. Some believe that deficits contribute to economic growth, high employment, and price stability. Based on what you have learned about economics, what do you think?[1]


  1. Adapted from Gitman, Lawrence , Carl McDaniel, Amit Shah, Monique Reece, Linda Koffel, Bethann Talsma, and James Hyatt. “Introduction to Business.” OpenStax, September 19, 2018. https://openstax.org/books/introduction-business/pages/1-5-achieving-macroeconomic-goals.