Home/Economics/Macroeconomics/What is the “current macroeconomic situation” in the u.s. (e.g. is the u.s. economy currently concerned about unemployment, inflation, recession, etc.)? what fiscal policies and monetary policies would be appropriate at this time?

Essay, 2 pages (350 words)

What is the "current macroeconomic situation" in the u.s. (e.g. is the u.s. economy currently concerned about unemployment, inflation, recession, etc.)? what fiscal policies and monetary policies would be appropriate at this time?

Subjects: Economics, Macroeconomics

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Published: September 9, 2022
Updated: September 9, 2022
University / College: Northeastern University
Language: English
Downloads: 28

What is the ” current macroeconomic situation” in the U. S. (e. g. is the U. S. economy currently concerned about unemployment, inflation, recession, etc.)? What fiscal policies and monetary policies would be appropriate at this time? THE PROBLEM: US is the leading economy of the world but is under a recession since 2008 or so. Unemployment is at record high and is the biggest problem areas for policy makers. No jobs means consumer confidence and business sentiment also suffer. The problem stared with the housing bubble in 2008 leading to a near collapse of financial biggies like Lehman Brothers. To weather that situation the US govt has been taking measures to prop up the economy, but without much effect. Currently another problem is the Europe’s growing debt. Many countries like Spain, Greece are reeling under heavy debt, and are asking for help from other European nations. This kind of debt rescue can threaten the growth of not just these nations but of Us and the entire world economy. The fear is that Europe could take US to a new low in GDP levels. As US is the world’s largest economy any recession will have wide ramifications over all other economies WHAT HAS US DONE? On the fiscal front the govt has pumped in money by printing new money. This is expected to give more money in the hands of people to spend. A rise in spending will boost aggregate demand and increase income according to theory. The ‘ Quantitative Easing’ measures were in this spirit. It has also increased govt spending to boost confidence about growth in long run. the rescue of banks and private insurers was also intended to give confidence to the businesses and public about faith in the US economy. On the monetary front, the FOMC has constantly undertaken buying of govt securities in an effort to lower interest rates and encourage investments. A rise in the latter increases output and improves confidence levels also. Hence the govt is trying its best to revive the economy using fiscal and monetary measures. It has achieved some success but even this sis being threatened by developments in Europe. Any recession in Europe will make US recovery that much tougher. Unemployment is the biggest concern at 9. 3%.

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AssignBuster. (2022, September 9). What is the "current macroeconomic situation" in the u.s. (e.g. is the u.s. economy currently concerned about unemployment, inflation, recession, etc.)? what fiscal policies and monetary policies would be appropriate at this time? Retrieved from https://assignbuster.com/what-is-the-current-macroeconomic-situation-in-the-us-eg-is-the-us-economy-currently-concerned-about-unemployment-inflation-recession-etc-what-fiscal-policies-and-monetary-policies-would-be-appropriat/

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AssignBuster. 2022. "What is the "current macroeconomic situation" in the u.s. (e.g. is the u.s. economy currently concerned about unemployment, inflation, recession, etc.)? what fiscal policies and monetary policies would be appropriate at this time?" September 9, 2022. https://assignbuster.com/what-is-the-current-macroeconomic-situation-in-the-us-eg-is-the-us-economy-currently-concerned-about-unemployment-inflation-recession-etc-what-fiscal-policies-and-monetary-policies-would-be-appropriat/.

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Essay, 3 pages (700 words)

What is the "current macroeconomic situation" in the u.s. (e.g. is the u.s. economy currently concerned about unemployment, inflation, recession, etc.)? what fiscal policies and monetary policies would be appropriate at this time?

Subjects: Literature, Russian Literature

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Published: November 17, 2021
Updated: November 17, 2021
University / College: Cardiff University
Level: Doctor of Philosophy
Language: English
Downloads: 50

What is The ” Current Macroeconomic Situation” In the U. S. (e. g. is The U. S. Economy Currently Concerned about Unemployment, Inflation, Recession, Etc.)? What Fiscal Policies And Monetary Policies Would Be Appropriate At This Time? Table of ContentsThesis Statement3Discussion3Works Cited6Thesis StatementThe paper intends to analyze the “ current macroeconomic situation” in the United States along with determining the fiscal as well as the monetary policies that would be appropriate for the US economy. DiscussionThe “ current macroeconomic situation” in the US is identified to be quite concerned about different significant aspects that include unemployment, Gross Domestic Product (GDP) growth and household consumption among others. From the viewpoint of an important aspect i. e. unemployment, it has been apparently observed that the US has successfully created huge number of jobs but still has failed to bring down the unemployment rate at a stable position which remained at 8. 2% as of March’ 2012. In relation to the aspect concerning inflation, it has been viewed that the high as well as the rising oil prices have been ultimately affecting the US economy by a considerable extent. Furthermore, the GDP growth of the US has remained quite positive but it is developing at below-trend rates, which reveals a sign of looming adverse effects upon the US economy at large. With regard to determining expansionary fiscal policy tools, it has been noted that the aspect of household consumption has continued to be one of the critical concerns in the US by a greater degree. This is owing to the reason that the price of gasoline and the disposable personal income of every individual in the US are extensively rising. From the standpoint of easy money policy tools, it has been apparently observed that the fiscal policy in the US has been experiencing disorganized circumstances due to the factor of inflation. According to the budget of the financial year 2013 that was presented by the newly elected President of the US i. e. Barack Obama, it has been viewed that there pertains the possibility of increasing the financial deficit which might extensively affect the economy of the US by a significant level (North, “ Overview”). After acquiring a brief idea about the “ current macroeconomic situation” in the US, it can be stated that the US economy has been focusing its concern much upon certain important aspects that include unemployment, inflation and GDP growth among others. Though the US economy has been identified to expand since the mid of the year 2009 i. e. during the initial period of recession, the growth rate of the economy is observed to be quite low. This may be due to the reason of tight credit conditions and weak housing markets among others. By taking into concern the “ current macroeconomic situation” in the US, increasing spending as well as generating an easy money setting would be quite appropriate at this particular period of time. In this similar context, by mounting spending and forming an easy money situation, the US economy can be stimulated by generating huge number of jobs and eventually raising the prosperity of the nation by a greater degree. The adoption as well as the implementation of the aforementioned fiscal policies would certainly support in developing the aggregate output the US economy at large. Besides, effectively buying as well as selling the US government bonds and suitably increasing or lessening the money supply would be quite appropriate at this particular time for the US economy. In this connection, it can be affirmed that the Federal Reserve (FED) of the US would be held responsible to perform the aforementioned monetary policies to enhance the “ current macroeconomic situation” in the nation. By appropriately adopting as well as implementing the aforesaid monetary policies by FED under the supervision of Federal Open Market Committee (FOMC), greater control can be kept especially upon interest and most importantly inflation rates that would ultimately result in enhancing the “ current macroeconomic situation” in the US at large (Bernanke, “ U. S. Monetary Policy and International Implications). Works Cited Bernanke, Ben S. U. S. Monetary Policy and International Implications. News & Events, 2012. Web. 17 Feb. 2013. North, Dan. Overview. Economic Research, n. d. Web. 17 Feb. 2013.

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AssignBuster. 2021. "What is the current macroeconomic situation in the u.s. (e.g. is the u.s. economy currently concerned about unemployment, inflation, recession, etc.) what fiscal policies and monetary policies would be appropriate at this time." November 17, 2021. https://assignbuster.com/what-is-the-current-macroeconomic-situation-in-the-us-eg-is-the-us-economy-currently-concerned-about-unemployment-inflation-recession-etc-what-fiscal-policies-and-monetary-policies-would-be-appropriat/.

1. AssignBuster. "What is the current macroeconomic situation in the u.s. (e.g. is the u.s. economy currently concerned about unemployment, inflation, recession, etc.) what fiscal policies and monetary policies would be appropriate at this time." November 17, 2021. https://assignbuster.com/what-is-the-current-macroeconomic-situation-in-the-us-eg-is-the-us-economy-currently-concerned-about-unemployment-inflation-recession-etc-what-fiscal-policies-and-monetary-policies-would-be-appropriat/.

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AssignBuster. "What is the current macroeconomic situation in the u.s. (e.g. is the u.s. economy currently concerned about unemployment, inflation, recession, etc.) what fiscal policies and monetary policies would be appropriate at this time." November 17, 2021. https://assignbuster.com/what-is-the-current-macroeconomic-situation-in-the-us-eg-is-the-us-economy-currently-concerned-about-unemployment-inflation-recession-etc-what-fiscal-policies-and-monetary-policies-would-be-appropriat/.

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