Answer to Question #233294 in Macroeconomics for georgina

Question

why is it important for the government to access the performance of the economy from time to time

Answer 1

The following are some of the reasons why the government needs to access its economic performance from time to time.

• It helps to indicate economic output growth. This can be measured by the use of Gross Domestic Product (GDP) which includes all products produced, Gross Value Added (GVA), or any other appropriate measures which can be used to access the same.

• It is how the government can improve the standards of living of its citizens. By this, the government can cater for any increase in population growth without having to lower the living standards of the citizens.

• Performance measurement indicators help to access the expansion of the country's economy and estimate the value-added in the country in terms of the value of all goods and all services that are produced.