StudentShare
Contact Us
Sign In / Sign Up for FREE
Search
Go to advanced search...
Free

Macroeconomic Situation - Essay Example

Cite this document
Summary
(FRB, 2010) The investment in the business activities has been observed to be growing consistently. Also since the demand for the…
Download full paper File format: .doc, available for editing
GRAB THE BEST PAPER94.7% of users find it useful
Macroeconomic Situation
Read Text Preview

Extract of sample "Macroeconomic Situation"

Macroeconomic Situation According to the Federal Open Market Committee the economic activity in the United s is increasing slowly and gradually since January 2010. (FRB, 2010) The investment in the business activities has been observed to be growing consistently. Also since the demand for the manufactured products have increased over time, the output of the manufacturing sector has improved. Furthermore, despite the fact that the unemployment rate has remained at 9.7%, the labor market is getting a little stable now.

(FRB, 2010) Although the manufacturing production increase in January was more than expected, the output is still quite below the long run average level of production. As a result there are lesser incentives for the manufacturers to increase the production and so reduced industrial production is anticipated. The consumer spending, on the other hand, has increased rapidly (especially for food items), despite the fact that the household incomes had been reduced in the last quarter of 2009. Meanwhile, the inventories for the consumer goods and business supplies have reduced considerably in contrast to the inventories of different materials and equipment.

Further, the inflation rate was anticipated to increase recently because of the increase in the oil prices. However, the personal consumption expenditures (PCE) inflation has remained more or less the same as the previous year. (FRB, 2010) The overall GDP has risen 14204 billion dollars after an increase of 5.6% in the last quarter of 2009. At this rate of economic expansion the economy can easily recover within a few months. But that is not quite likely.Despite the fact that the economy has improved considerably since the last quarter of 2009, it is still important to consider the fact that the US economy has grown only 0.

1% over the last one year. (Fedec, 2010) Since the percentage by which the output worsened in 2008 was 1.9%, a lot of economic growth is needed to cover up for the loss. Also it is pertinent that the government gives importance to the strong expansion of the economy. Out of the 5.6% of the increase in the GDP over the last few months, 3.9% has been due to the rebuilding of inventories. (Fedec, 2010) Once the inventories are created the production is likely to fall. As a result the overall output production may fall.

Although the labor market has improved considerably, the unemployment rate still is the highest that has been recorded in the last 26 years. (Fedec, 2010) If nothing is done by the government in this regard the situation can worsen. The government needs to formulate policies that can stimulate new jobs for the unemployed.Perhaps the worst problem that the US economy is facing presently is the fiscal deficit (the biggest recorded so far). (Fedec, 2010) The government expenditures exceed the revenues earned through taxes and the net interest rate is likely to fall.

With reduced interest rate the foreign direct investment is also expected to be falling. To solve the problem a step that can be taken by the US government is to use the monetary expansion policies instead of the fiscal expansion. This way the output would increase, and the prices would fall. The Federal Reserve would not need to increase rates to fight the high prices. ReferencesFedec, A. (2010, February 26).Despite Recent Growth, US Recovery is Still Weak. Trading Economics: Global Economics Research [Online] Available: http://www.

tradingeconomics.com/Economics/GDP-Growth.aspx?Symbol=USD [9 April 2010]FRB. (2010, March 16). Minutes of the Federal Open Market Committee. Board of the Governors of the Federal Reserve System [Online] Available: http://www.federalreserve.gov/monetarypolicy/fomcminutes20100316.htm [9 April 2010]

Read More
Cite this document
  • APA
  • MLA
  • CHICAGO
(“Macroeconomic Situation Essay Example | Topics and Well Written Essays - 500 words - 1”, n.d.)
Macroeconomic Situation Essay Example | Topics and Well Written Essays - 500 words - 1. Retrieved from https://studentshare.org/miscellaneous/1565164-macroeconomic-situation
(Macroeconomic Situation Essay Example | Topics and Well Written Essays - 500 Words - 1)
Macroeconomic Situation Essay Example | Topics and Well Written Essays - 500 Words - 1. https://studentshare.org/miscellaneous/1565164-macroeconomic-situation.
“Macroeconomic Situation Essay Example | Topics and Well Written Essays - 500 Words - 1”, n.d. https://studentshare.org/miscellaneous/1565164-macroeconomic-situation.
  • Cited: 0 times

CHECK THESE SAMPLES OF Macroeconomic Situation

Current Macroeconomic Situation

Current Macroeconomic Situation Name Professor Institution Course Date Part 3, Omnivore's Dilemma While the author is much interested in mentioning the read, his argument does not seem to augur well with what he preaches.... Most of his writings were pointing away from the bread....
3 Pages (750 words) Essay

Current Macroeconomic Situation in the USA

Running head: Macroeconomic Situation in the US Current Macroeconomic Situation in the US Insert Name Insert Grade Course Insert 06 June 2012 What is the current macro-economic situation in the United States?... As a result, the current Macroeconomic Situation appropriately echoes the 2008 economic crisis in a highly significant manner.... The current macro-economic situation in the United States is in a state of hang-over position and, therefore, it is premature to state that the recession of 2008 is over....
4 Pages (1000 words) Essay

Economics cuurent macroeconomic situation

It becomes indispensable at the current situation but “Effectively zero interest rates are creating distortions in capital markets.... Economists are at different ends on the current speech of Pres.... Barack Obama and him boasting of the figures in employment for May.... Total employment dwindled by 35, 000 while unemployment is seeing little… Employment-population ration is 58....
2 Pages (500 words) Research Paper

Current macroeconomic situation

Despite the Current Macroeconomic Situation Task Introduction Over the few years, the Macroeconomic Situation has not been at its best owing to the recession that hit the US.... In the most recent probe into the Macroeconomic Situation, Consumer Price Index with regard to urban consumers stood constant during the month of December similar to the month of November.... Macroeconomic Situation and Monetary Policy.... Although, the situation has commenced a recovery from the most disastrous period in the financial system of the US not much improvement has been evident....
2 Pages (500 words) Essay

Current Macroeconomic Situation

United States – macroeconomic Data.... In 2010 the gross domestic product of the Unites States exceeded $14 trillion.... The U.... .... economy is still recovering from the lingering effects of the global recession of 2008.... In terms of GDP the economy left its recession… The GDP growth rate of the U....
2 Pages (500 words) Research Paper

Current Macroeconomic Situation in the U.S

This paper is one of the best examples of the thorough analysis of the Macroeconomic Situation and the most pressing economic issues in the US.... The paper talks about the current macroeconomic status of the United States as well as objective way to mitigate the effects of the economic recession.... It is established, that the solution of the issue of macroeconomic challenges in US is in utilization of the mix of monetary and fiscal policies....
4 Pages (1000 words) Research Paper

Current macroeconomic situation

This is Current Macroeconomic Situation Current Macroeconomic Situation United s of America's Macroeconomic Situation is a debatable subject worldwide.... Despite this (recession) the US economy remains on top of the list in the… The USA government's intervention saved the situation that could have otherwise worsened. Unemployment rate is at its topmost.... The USA government's intervention saved the situation that could have otherwise worsened....
2 Pages (500 words) Assignment

Current Macroeconomic Situation in the US

Large percentage is of opinion… And when asked about the effect of government efforts to handle the situation, majority believe the economic policies have just benefited corporations, the rich, and large banks than small businesses, the poor Current Macroeconomic Situation in the US Affiliation Current Macroeconomic Situation in the US U.... And when asked about the effect of government efforts to handle the situation, majority believe the economic policies have just benefited corporations, the rich, and large banks than small businesses, the poor or middle-class (OECD,2013)....
2 Pages (500 words) Essay
sponsored ads
We use cookies to create the best experience for you. Keep on browsing if you are OK with that, or find out how to manage cookies.
Contact Us