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Advisement Paper

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Economic Advisement Paper

Team C

ECO/372

September 9, 2013
Robert Freita Jr.

Economic Advisement Paper

The total value of the services and goods that are produced in a country, also the value of goods imported that decrease value of exports is Aggregate supply. Aggregate demand is the sum of all demand in an economy, and will be calculated investment, services and not exports. In this paper team C will discuss the economic recovery from the prospective of Unemployment, Consumer income, Interest rates, and Expectations respectively of the U.S. This information will be summarized and recommendations made to the president regarding government spending and taxes based on the aforementioned economic factors.
Unemployment
The easiest way to understand how aggregate supply and demand affect unemployment is to think about unemployment in its simplest form. The rise and fall of the nation’s unemployment rate is at best a simple matter of supply and demand. The numbers of people who want jobs at necessary wages (labor supply) exceeds the number of people firms are willing to hire (labor demand) (Beggs, 2012). The most fundamental of economic model suggest that when supply exceeds demand the price in that market will fall; in the labor market this means that wages fall. It stands to reason that falling wages should encourage employers to hire more workers. Moreover, if wage fall firms production cost will decline this will induce competitive firms to reduce their price. The insinuation appears to be that lower wages and prices could solve the problem of unemployment and insufficient demand (Beggs, 2012).
Expectations
Expectations within an economy suggest that people within an economy make choices based on available information and their experiences. This theory suggests that current expectations in the economy will in some way affect the future state

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