The collapse of France, British, Spanish markets are in the next year’s agenda. The aftermath of subprime mortgages allotted by U.S banks to every individual resulted in a drastic picture of U.S Economy. The…
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Continuous increase in the prices of food, shelter and gasoline lead to an increase of 0.2% in August, 2011, same as the previous month. Apparel and shelter are the biggest contributors whereas the prices of health care, personal care, medical care, household operations and furnishing have also seen to be increased significantly.
Since April, the Unemployment rate has detained between narrow ranges of 9.0% to 9.2%. Currently, the unemployment rate is 9.1%. The number of long-term unemployed people is 6.2 million, as recorded in September, 2011. These individuals accounted for 44.6% of the total unemployed people in U.S.
GDP growth rate is an important indicator to measure the strength of an economy. GDP growth rate is said to be positive when the economy develops. Annualized Growth of real GDP has been recorded far below than 5.4% than the normal recoveries of previous business cycles. Credit rating of U.S is also at risk. Credit rating agencies have downgraded the credit rating of U.S from AAA to AA.
Many economists now believe that America’s economy has gone fragile. They recommend that it would not be to cut down the consumption and increase tax rates at this point of time. The dysfunctions in U.S have immense pressure from increasing population, globalization and technological advancements. The U.S requires smart and effective policies in every area. It needs to spend in areas like retirement funds and health care whereas it is encouraged to invest in the fields of research and development, education and infrastructure in order to grow. U.S is at that point of budgetary limits where money should to be used wisely and only on effective projects. But in every other area, government policies are suboptimal.
The world used to look at the U.S with awe as Americans had built highway systems for interstate, created best standard for education in the world, invested heavily in the frontiers of knowledge. But this is not now how the world perceives America
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Probably the most important are the following: technological development, development of transport infrastructure, growth of the role of international companies, etc. In any case, these reasons have led to creation of a global world. Global economy is one of the most essential areas of this world.
The macroeconomic situation in the United States of America could be described as ailing and this is due to the fact that the economy of the country is just recovering from an economic recession. The global economic meltdown that hit the world did not leave out the United States of America as the macroeconomic situation in the country is such that the government is trying to recover from the economic recession and inflation that has hit the country (Jones, 2008).
In principle, we know that we are in a recession when there is a general decline in the economic activity. This becomes obvious when we look at the real gross domestic product. This is the most viable indicator to know the state of the economy. This is regarded as a noteworthy turn down in economic activity just after the economy reaches a peak and end when it reach trough (New York Times, 2010).
Those changes may be attributed to technological, demographic and industrialization changes respectively (Tucker, 2011). This may further force on organisation to incur huge capital expenditure as it tries to retrain its employees (Tucker, 2011). In above connection, structural unemployment is long rather than short term economic condition.
This essay mainly focuses on the assessment of the current macroeconomic developments in the United States. The issues arising from selected policy prescriptions are discussed with reference to government expenditure for maintaining social security system in US. Alternative policy solutions to current crisis are also presented in the paper.
Macroeconomic instability has also detect that banking sector has been on a constant systemic risk with an increase in the nonperforming loans and short-term interest rates have caused devaluation in foreign currency borrowing and local currency lending. Macroeconomic policies have tried hard to target inflation by adopting monetary policy strategy.
from the demand-supply equilibrium in the wage market as classical economists argue, but because of lower aggregate demands which, as Keynes argues, leads to lower demands in labor in turn.
In a closed economy where there is no foreign trade, the level of outputs that are
he early 1980’s recession where the level of GDP fell from peak to trough by 5.9 %, then in early 1990’s where the level of GDP fell from 1990 to 1991 to around 4.5 % which was just a moderate fall however the most severe fall in GDP occurred between 2008 and 2009 that was
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