Macroeconomics
The current state of the U.S. macroeconomy is one of delicate recovery from a major economic shock several years ago. The economy is growing, albeit slowly, and there remain a number of linger issues that should be addressed. This paper will outline the state of the U.S. economy and develop some policy prescriptions for addressing any issues that may exist.
The gross domestic product grew at an annual rate of 0.4% in the fourth quarter of 2012, which was down significantly from the 3.1% annualized growth that was recorded in the third quarter. The Bureau of Economic Analysis reports that gains in the fourth quarter came from increases in personal consumption spending, nonresidential fixed investment and residential fixed investment. These gains were partly offset by negative contribution from private inventory investment, federal government spending, exports and local government spending (BEA, 2013). Real GDP increased by...
Since 1970, the economic growth in U.S. had increased in real terms at a rate of 3.16% per annum, up to 2001, when the American economy registered a slow down period and the economic growth amounted 1.7%. Since 2003, the growth rate averaged 4.62% per annum. Currently, the economic growth is heavily influenced by fiscal relaxation policy that led to increased investments and economic growth level. The average return
He states that changes international capital flows have been the primary consequence of increased deficits and likens this to direct competition between the U.S. Treasury and the U.S. exporting industry. He reasons that the flow of foreign funds into the Treasury prevents these funds from being available for foreign purchase of U.S. goods and services. Thus, the more our government borrows and finances with foreign funds, the more our
In most countries, a rise in debt would have a series of economic consequences leading to the devaluation of the currency and a return to an equilibrium. This has not happened with the U.S. dollar because of a unique externality -- its role as the world's currency. However, that role itself dependent on a number of factors, including but not limited to domestic resources stocks, strong legal and political
macroeconomics, the U.S. Dollar appears to be the currency holding the greatest global power. Indeed, it is the dominant reserve currency (Liu), now comprising 68% of global reserves, while just a decade ago the dollar accounted for 51% of global currency reserves. Because it is so globally prominent, even minor changes in the economy influences the power and performance of the dollar. It appears that recent market influences and
Unemployment payments are intended to provide temporary financial relief, whereby eligible recipients are able to sustain until their situation improves. It is important to note that each state has a separate unemployment insurance program that must be within guidelines established by the federal law. Typically, a person is eligible if they have worked during a certain time frame known as a base, which is usually the first 4 of the
As the result of this, government cannot raise interest rates and may need to halt interest rates where they are. While lower interest rates allow borrowing, higher interest rates may actually serve those better who have already invested in bonds and securities. But if U.S. cannot move interest rates around for fear of further halting economic activity then dollar is in constant danger of doing further down. So the main
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