The bigger the number, the better. In economics, this cannot be more true, unless we are talking about unemployment rates, inflation or HDI. GDP growth is a great indicator of economic growth, as is GDP growth, but the problem is that it is only a good indicator for one year. For example, even though Japan's GDP grew dramatically year after year, this growth indicator could not predict the bursting of the Japanese bubble, creating stagnation for a decade. An expanding GDP is good, but how GDP is expanding is the real answer to how much economic growth is legitimate. If an economy grows thanks to subprime mortgages, mortgage-backed securities with fake ratings (as in the movie The Big Short), the economy is destined to collapse because it is built on weak rather than solid foundations. The fact that the government can regulate and smooth the economic cycle of faster and slower growth is intriguing, since only it is truly immune to the fear factor of a contracting economy, which produces a negative feedback loop: people and businesses they save more when consumption increases. it is what will stimulate the economy and hinder economic recovery. Say no to plagiarism. Get a tailor-made essay on "Why Violent Video Games Shouldn't Be Banned"? Get an original essayOnly the government can use the Keynesian ideas of stimulus and tax cuts to create more cash flow, but it is also government intervention that causes many hiccups in the economy in the first place. While GDP and GDP per capita measure the economy as a whole, the Gini index addresses inequality. Economic inequality can also produce problems for an economy's elite, since if a large segment of the economy were poor, there would be less demand for the products and services that companies, often run and owned by the economic elite, sell . While economic inequality is inevitable, entrepreneurs must recognize that excessive inequality can harm their self-interests. Although the government can redistribute income through fiscal policies of raising taxes and increasing social welfare programs, this can ultimately lower GDP and overall economic conditions. of a country by contracting the money supply, resulting in reduced investment and opportunities for economic growth. In terms of governance, bigger is far from better. A government must carefully balance its fiscal and monetary policies, to fine-tune growth, inflation, unemployment, inequality and cash flow. Deciding when and not to intervene is fundamental: not all situations require intervention. Even if the market is far from perfect in the adjustment process, intervention can sometimes prevent the market from adjusting when it can.