Reflection about demand and supply on Macro economics - Assignment Example

Teacher Reflection on article from The Economist en d Not Spluttering Any More I would like to use the article from The Economist entitled Not Spluttering Any More. The article reported on a positive note of a significant increase of total employment by 248,000 in September as reported by Bureau of Labour Statistics. It is also anticipated that with rising demand for labour will follow an increase in salary soon as companies can already pay more to attract workers. This article raises many encompassing issue in macroeconomics particularly the necessity of providing employment to people for an economy to recover.

Government’s are concerned about raising employment and corresponding wages due to the macroeconomic phenomenon of contagion effect. It means that if people have jobs and more money on their pocket, they are likely to spend more. Now, these expenditures would also mean another person or company’s earning allowing businesses to expand and hire more employees. So the ripple or contagion effect begun where jobs and their corresponding wages also creates jobs and wages to make a certain economy not only to recover but also prosperous.

This is measured in terms of GDP growth which the article projected an annualised GDP growth in the third quarter from 3.7% to 4.2%. In the article, the author may not have mentioned it but the government exercises its fiscal and monetary policy not only to control prices and inflation but also to create jobs. In this case, the Central Bank can lower the interest rate so that businesses can borrow money at a very low cost to expand the business and hire more employees. Reference"Not spluttering any more.

" The Economist. The Economist Newspaper, 3 Oct. 2014. Web. 4 Oct. 2014. .