The higher the number, the better. In economics, this couldn't be more true, unless we're 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's only a good indicator for one year. For example, even though Japan's GDP experienced fantastic year-over-year growth, this growth indicator could not predict the Japanese bubble bursting later, creating stagnation for a decade. An expanding GDP is positive, but how GDP grows is the real answer to the question of how much economic growth is legitimate. If an economy grows on subprime mortgages, mortgage-backed securities with false ratings (like in the movie The Great Short), the economy is doomed to collapse because it is built on weak foundations rather than solid. The fact that government can regulate and smooth the economic cycle of faster or slower growth is intriguing, because only it is truly immune to the fear factor of a contracting economy, which produces a feedback loop negative: individuals and businesses save more when their consumption increases. This is what will stimulate the economy and hinder economic recovery. Say no to plagiarism. Get a custom essay on “Why Violent Video Games Should Not Be Banned”?Get the 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 which causes many problems 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 create problems even for the elite of an economy, because if a large part of the economy were poor, there would be less demand for the products and services that businesses – which are often run and owned by the economic elite. Although economic inequality is inevitable, business owners must recognize that too much inequality can harm their own interests. Even though the government can redistribute income through fiscal policies of raising taxes and increasing social welfare programs, this can ultimately lower GDP and the overall economic situation. of a country by contracting the money supply, resulting in less investment and opportunities for economic growth. In terms of government, 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. It is imperative to decide when to intervene and when not to intervene: not all situations require intervention. Even though the market is far from perfect at adjusting, intervention can sometimes prevent the market from adjusting when it can..