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Aggregate Supply and Demand

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Current State of Key Areas

Mr. President, we will now focus on several crucial areas of the economy in order to evaluate and thus, best advise you on an effective course of action.
Unemployment
The first, and arguably most important segment, is unemployment. The Bureau of Labor Statistics (BLS) states as of September, 2014, the unemployment rate has dropped below six percent; the lowest in over six years. While there is still cause for concern with as many as 3.7 million long-term unemployed Americans, this is welcome news for the aggregate economy. With more Americans employed and purchasing goods and services, aggregate demand for goods and services rises and creates still more employment opportunities. It is vital to recovery that this trend continues.
Expectations
Effective monetary policy must be credible (Colander, 2013). At present, consumer confidence, as measured by The Conference Board, is up 5.5 points in October to 94.5 rebounding from 89.0 in September. Expectations increased even greater to 95.0 from 86.4 in September. Both index increases infer growing confidence and positive expectation in current policy. These data will translate to more spending in the aggregate leading to more employment with the probability of increased productivity to supply the demand for goods and services.
Consumer Income
The US Department of Commerce Bureau of Economic Analysis (BEA) reports personal income increased 0.2 percent for the month of September 2014, and disposable income rising 0.1 percent during the same period. Of note, personal expenditures dropped 0.2 percent equaling this increase. Tis effectively negates any positive contribution to aggregate demand, and in fact, has potential to create an over-supply of goods and services.
Interest Rates
The Federal Reserve reports no significant changes in key interest rates during the past three months. The

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