Current Macroeconomic Situation - Essay Example

Furthermore, the GDP growth of the US has remained relatively upbeat. Still, it is developing at below-trend rates, revealing a sign of looming adverse effects upon the US economy. About 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 to a greater degree.

This is because 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 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 fiscal deficit, which might extensively affect the economy of the US 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 much on certain essential aspects, including 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 economy's growth rate is observed to be relatively low. This may be due to tight credit conditions and weak housing markets.

Considering the “current macroeconomic situation” in the US, increasing spending and generating an easy money setting would be appropriate for this period. In this similar context, by mounting spending and forming an easy money situation, the US economy can be stimulated by generating massive jobs and raising the nation's prosperity to a greater degree. Adopting and implementing the aforementioned fiscal policies would undoubtedly support the development of the aggregate output of the US economy at large.

Besides, effectively buying as well as selling US government bonds and suitably increasing or lessening the money supply would be entirely 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 for performing the aforementioned monetary policies to enhance the “current macroeconomic situation” in the nation. By appropriately adopting as well as implementing the aforesaid economic procedures by FED under the supervision of the Federal Open Market Committee (FOMC), greater control can be kept, primarily 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).