...The Current Macroeconomic Situation in the United States Name: Institution: Abstract The policy makers in every economy play an imperative role in regulating the macroeconomic activities with the intention of maintaining the economic stability. In essence, economic stability is vital for improving the social welfare of citizens, as well as the economic growth. The current United States economic outlook is not good. The average American is not doing well though there has been an improvement in market performance. The 2009 financial crisis continues to affect the United States economy. High unemployment level is the major economic issues that the country is still experiencing. The unemployment rate is still high although there has been a small improvement in job creation. As a result of unemployment, the consumer confidence as well as business sentiment continues suffering. At present, inflation is not a critical threat to the United States. The Gross Domestic Product is flat. In fact, the growth of real GDP has been excessively slow. The monetary and fiscal policies can help the policy makers in solving the present unemployment problem facing the country. In particular, the policymakers ought to consider implementing both expansionary monetary and fiscal policies since the current level of unemployment is essentially cyclical. With regards to the expansionary fiscal policy, the policy makers should implement it through taxation...
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...Bangladesh began implementing structural policy reforms to increase the market orientation of its economy in the late 1970s. The authorities adopted significant reforms in agriculture, industry, and trade, and also pursued reforms in the financial and infrastructure sectors. These reforms helped accelerate growth from an annual average of 3 percent in the 1970s to 4 percent in the 1980s and to 5 percent in the 1990s. Sound and sustained macroeconomic management ensured macroeconomic stability, contributing to Bangladesh’s ability to maintain one of the lowest growth volatilities in the world. Major Policy Reforms Contributed to Growth Acceleration: * Agricultural policy * Industrial policy * Trade policy * Infrastructure policy * Financial policy * Macroeconomic policies * Human Development policies Macroeconomic policies Following the initial debacle of the 1972–75 periods, Bangladesh was able to maintain a broad degree of stability of macroeconomic policies, as reflected in relatively low inflation and a stable real exchange rate. Fiscal, monetary and exchange rate management was broadly on track for most of the period until around the end of the 1990s. This long-term good macroeconomic management served Bangladesh well, contributing to incentives for private investment and exports. Inflation has now been reduced to 3–4 percent annually (Chart 7). The correction of the macroeconomic imbalances started in the late 1970s and continued...
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...Macroeconomics Jennifer Swanson Professor Hector Morales 12/09/2012 Macroeconomics……………………….………………….………………………... page 3 Conclusion………………………………………………………………………....... page 4 References………………………………………………………………………....... page 5 Macroeconomics The macroeconomic situations in the United States are worrisome, as is the rest of the world. Unemployment is at a steady high, there’s a staggering inflation and the recession continues to effect people after so many years. The 2008 Financial Crisis had a more detrimental impact on advanced economies like the US than on developing economies like China and India, leading to wider projected disparities between the future GDP growth rates of the advanced and developing economies. According to Trading Economics, “The Gross Domestic Product (GDP) in the United States expanded 2.70 percent in the third quarter of 2012 over the previous quarter. Historically, from 1947 until 2012, the United States GDP Growth Rate averaged 3.2 Percent reaching an all-time high of 17.2 Percent in March of 1950 and a record low of -10.4 Percent in March of 1958.Unemployment Rate in the United States decreased to 7.70 percent in November of 2012 from 7.90 percent in October of 2012”. The recovery of the US job market has not taken off as many had expected and recently the economy added a disappointing number of available jobs. With the lack of jobs, unemployment rates continue to be an issue. The economy has lost more jobs...
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...Name Institution Instructor Title Describe the terminology of macroeconomics including GDP, GNP, national income business cycles, monetary policy, fiscal policy, inflation and unemployment Macroeconomics is a broad sub-field of economics that establishes the behavior, outlook and structure, collective and established decision making system of an economy at large and usually involves national economies, regional and global economies with little or no involvement of the individual markets. Gross National Product is a determining tool in macroeconomics that measures a nation’s economy and status through international investments and residents working over-seas. GNP excludes any product values produced by foreign investors within the country. GNP is a great indicator in macroeconomics when assessing economic progress in comparison with Gross Domestic Income. (Clark & Montjoy, 2001) Macroeconomics uses GDP to determine the value of all market products and services produced within a given boundary usually a nation in a period of one year. At every stage of production, the value of all goods is added and the economic growth established based on the previously assessed standards. Macroeconomists explain that unemployment tends to reduce with a rising GDP rate since the output is increased and thus need for more skilled and unskilled labor force. Inflation gives an explanation on the rate at which product prices increase over time. Macroeconomists study this phenomenon...
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...States' current macroeconomic situation is dire. The current unemployment rate as of July 2012, according the the Bureau of Labor Statistics, is 8.3 %. The percentage is down 1% in comparison to the rate of 9.5 % in July of 2010. The current rate is still a far reach from the 4.7% in July of 2007, five years ago. The inflation rate for the the United States as of July 2012 is 1.4% according to www.tradingeconomics.com. It is noted that the inflation rate has decreased and shows a great improvement from the recorded inflation rate of 3.5% in July 2011. Since the United States is still currently in recession, despite the positive changes of the unemployment and inflation rates, expansionary fiscal policy tools would be most beneficial and appropriate at this time. An increase in government spending and tax reductions should help increase the aggregate demand and over all increase the country's GDP. In additional to fiscal policy, there are monetary policies that can be implemented that can help remedy the country's current macroeconomic situation. According the the Federal reserve's website, www.federalreserve.gov, monetary policy refers to the actions undertaken by a central bank, to influence the availability and cost of money and credit to help promote national economic goals. The FOMC, which consists of 12 committee members, holds 8 meetings a year to assess and potentially rectify the current economic conditions. They use different monetary policies to address...
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...The U.S. Economy Today Content Introduction…………………………………………………………………………Page 2 Data Trends………………………………………………………………………….Page 2 Fiscal & Monetary Policies….…..…………………………………….…………………………………Page 2 &3 Conclusion…………………………………………………………………………..Page 3 References…………………………………………………………………………..Page 3 Introduction We will take a look at today’s economy in the 2014. Discuss current trends such unemployment, inflation and the GDP. How do fluctuations in these trends affect the U.S. economy? What fiscal & monetary policies should be used to assist or improve our current economic situation? Lastly, what phase is our economy in today a depression, recession or expansion phase? Data Trends According to the Bureau of Labor Statistics (BLS) our current unemployment rate as of September 2014 is 5.9%, which is showing a slow steady decrease over this last year. The current GDP is 4.6%, which is showing a increase from the first quarter that was at -2.1%. The current inflation rate is at 1.7%, which has fluctuated from 1.6% in January, then had an increase in June up to 2.1%. All these factors play a role in the economical well being. For Example if the unemployment rate continues to decline and the economy reaches full employment. This will promote consumers to purchase more goods and services, because their disposable income will increase. The aggregate supply and demand will both increase, which in turn will increase the GDP. Unemployment or employment...
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...Pamphlet Series No. 49 1995International Monetary Fund Washington, D.C.PDF file (176K) also availableUse the free Adobe Acrobat Reader to view pdf files.ISSN 0538-8759 ISBN 1-55775-535-3 | | | | Guidelines for Fiscal Adjustment Fiscal Affairs Department International Monetary FundContentsPrefaceIntroductionWhy May Fiscal Adjustment Be Needed? The Impact of Fiscal Policy on Macroeconomic Policy Objectives Inflation External Current Account Growth Fiscal Adjustment to Ensure Sustainability Links to Other Policy InstrumentsHow Should the Fiscal Stance Be Assessed? Fiscal Impact of Alternative Methods of Deficit Financing Other Measures Used to Assess the Fiscal Stance The Sensitivity of a Fiscal Assessment to the Time Frame of Analysis Definition of Government Accounts for Macroeconomic Analysis Coverage of Government Operations Timing of the Impact of Fiscal Transactions Defining the "Overall Fiscal Balance"How Much Fiscal Adjustment Is Required? A Framework for Fiscal Adjustment Determining the Amount of Fiscal Adjustment Reducing the Fiscal Deficit Quality of AdjustmentHow Should Fiscal Adjustment Be Effected? Measures to Improve the Tax System and Increase Revenue Characteristics of a Desirable Tax System Design of Major Taxes Rationalization of Expenditure Policies Expenditure Reduction in the Short...
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...What is the Current Macroeconomics Situation in the United States ? Roseanne Jones Oct. 12, 2014 Economics What is the current macroeconomics situation in the United States? How does unemployment, inflation, or recession effect our economy or our worrying about our economy? It’s no secret that since 2008 The United States has been in a recession. This is troubling since the United States is one of the leading economy countries of the world. The United States in recession has Americans as well as other countries wandering, what would be next for everyone? The recession has been since 2008. Unemployment rates were at an all time high by 2009 at 10%. As our unemployment was rising so was our fiscal deficit of our GDP. The Government knew it was time for them to take action and it would have to be something different. They tried to tide over the recession by relying on the expansionary fiscal policy. At first it did not have the effect that the government had hoped for but that was soon to change. As the government followed the expansionary fiscal policy they began to see positive changes. The rise in CSI was growing at a moderate and that led to less worry about inflation increasing. It was followed by a steep decline in the Fed rate. Since 2009 the Fed rate has been close to...
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...EC 301 Intermediate economics | The American Economy | Keynesian and Monetary Theories, Budget Deficits, Trade Deficits, and Supply-side Economics | | Nathan Johnson | 5/5/2013 | | The past twenty years has seen a great shift in economics of this country. In the early 1990’s the U.S. economy was struggling and was a major topic of the previous presidential election. Fast forward twenty years and an economic boom and bust later, the presidential election again was based on a struggling economy. By taking a closer look at the policies and practices that took place in that span we might be able to find a better understanding of how our government can influence our economy. In the field of economics there are several varying sets of ideals of how policies should be implemented. Two of those groups are the Keynesian theorists and the monetary theorists. These two groups offer different perspectives of what is “right” in the world of economics. Each option provides its positives and negatives, but it is up to each economist to determine which negatives are worth giving up. The Keynesian theorists believe in correcting economic downturns with fiscal policy actions. Actions that would please Keynesian theorists would include changes in government spending, changes in the amount of taxes, and changes made to investments in long term productive growth. During the most recent fiscal crisis, these theorists were happy with the stimulus package that was created by the...
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...States vs. Canada Introduction Macroeconomics is the field of the economics that deals with how individuals change their economic behavior when there is change in the market-wide policies. One of the two applications that are widely studied in the macroeconomics is the Fiscal Policy, Monetary Policy and aspect of Monopoly. The fiscal policy is implemented by the government of the U.S. The monetary policy is reviewed during the schedule of 8 meetings per year, during which it is analyzed and discussed that how economic and financial developments taking place in the country and determines the appropriate stance of the monetary policy. However, monopoly disables new and young businesses to grow or take birth with such heavy financial requirements for entering in the markets. This paper deals with the current economic situation, especially at the macro level, faced by the United States of America, the world’s largest economy and then it is compared with the economy of Canada and several aspects are discussed in the later part of the paper. Discussion United States The past twenty years has seen a great shift in economics of this country. In the early 1990’s the U.S. economy was struggling and was a major topic of the previous presidential election. Fast forward twenty years and an economic boom and bust later, the presidential election again was based on a struggling economy. By taking a closer look at the policies and practices that took place in that span...
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...What is the "current macroeconomic situation" in the U.S. (e.g. is the U.S. economy currently concerned about unemployment, inflation, recession, etc.)? What fiscal policies and monetary policies would be appropriate at this time? The information that’s being reported on the news by the news, web, and paper states the U.S. economy is current conditions greatly concerned about unemployment, which is due to the present recession. The current macroeconomic situation is instilling fear in many, because of the unstable and uncertainties of how we’ll recover and things remission from such state of being. The grime view and predictions the media is reporting it as the “decade’s depression”. Unemployment Rate in the United States decreased to 7.40 percent in July of 2013 from 7.60 percent in June of 2013. Unemployment Rate in the United States is reported by the Bureau of Labor Statistics. The United States Unemployment Rate averaged 5.82 Percent from 1948 until 2013, reaching an all-time high of 10.80 Percent in December of 1982 and a record low of 2.50 Percent in May of 1953. To be frank, there many people that do not understand these figures; and most will be assuming or estimating what it could possible mean for them without a real reason. According, to the Trading Economics, “The Gross Domestic Product (GDP) in the United States expanded 1.70 percent in the second quarter of 2013 over the previous quarter. GDP Growth Rate in the United States is reported by the Bureau...
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...between sovereign debt management and monetary policy under fiscal dominance and financial instability Hans J Blommestein and Philip Turner1 Abstract Serious fiscal vulnerabilities arising from many years of high government/GDP ratios have created new and complex interactions between public debt management and monetary policy. Although their formal mandates have not changed, recent balance sheet policies of many central banks have tended to blur the separation of their policies from fiscal policy. The mandates of debt management offices have usually had a microeconomic focus (viz, minimising longer-term borrowing costs, while limiting refunding risks). Such mandates have usually avoided any explicit macroeconomic policy dimension but some major policy overlaps are latent. What is needed is a policy framework for all official actions that affect the maturity structure of government debt in the hands of the public. This requires more analysis of the macroeconomics of government debt management. A full debate about the allocation of functional responsibilities would have to take account not only of the economics, but also of political and institutional constraints. There are operational advantages in having in place appropriate governance arrangements that serve to forestall short-sighted policies and hold specific institutions accountable for their mandates. Keywords: Monetary policy, central banks, policy design and consistency, policy coordination, debt management, sovereign...
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...Introduction The current state of the world economy is quite uncertain. Economic statistics that governments and other financial institutions use to project the economy imply that the world economy is shrinking. Since 2008, the state of the American economy has not been attractive. For instance, the United States economy has not registered any significant growth for the last three years. The 2011 second quarter results indicated that gross domestic product improved by 1%. At the same time, there was slight increase in business fixed investment sector. This was mainly attributed to good performance in software and equipment. In general, the economy seems to be headed for recovery (United Nations, 2010). There were increased product and services exports as well as over growth in consumer spending. Overall federal government spending increased. This was as a result of increased government spending in military. The issue of oil and turmoil in oil producing countries especially in North Africa has contributed negatively to the economy. High energy costs mean that most sections of the economy will experience high production costs. Final products will be more costly to the consumer and thus leading to reduced consumer spending. A broader look at the state of the economy reveals that the economy is headed for a recovery. Most core sections of the economy have begun to register growth meaning that soon the economy will bounce back (United Nations, 2010). Macroeconomic Snapshots and...
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...FACULTY OF MANAGEMENT AND ADMINISTRATION PUBLIC SECTOR MANAGEMENT TRAINING PROGRAMME (PSMTP) MPSM 5TH COHORT PSM 542: INTERNATIONAL TRADE AND FINANCE GROUP ASSIGNMENT 1 Candidate's Reg. Numbers R118475MP – LUSITO NEEMA FERDINAND R118472MP – LIMBE RUTH COSMAS R118474MP – MATATA JIMMY AVUTIA LECTURER. MR CHARLES MAKANYEZA Due date; 15th October, 2012 Question Two Discuss the various factors that determine the exchange rate regime. Introduction This paper is an attempt to discuss various factors which determine the exchange regime in relation to the international trade. The paper will provide a brief overview of the exchange rate regimes in the international trade, define key terms. It will also explore the various types of exchange rate regime practiced in the international and finally it will delineate the main factors that determine the exchange rate regime. Overview of exchange rate in the International trade. The choice of an appropriate exchange rate regime for developing countries has been at the center of the debate in international finance for a long time. The steady increase in magnitude and variability of international capital flows has intensified the debate in the past few years as each of the major currency crises in the 1990s has in some way involved a fixed exchange rate and sudden reversal of capital inflows. While the debate...
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...Business Economics ECON 545 Professor Ermias Weldemicael Week 6 Macroeconomic Analysis Situation B William Samarin August 15, 2014 Situation B Introduction In situation B, Cindy wants to start her own business where she installs solar panels. She has based her choice on what she perceives as the economic benefit of the cost savings of solar, both for businesses and homeowners plus the positive environmental impact of using solar. She has also heard that both the state and Federal government is offering incentives and rebates for the installation of solar panels to aid in the purchase of a solar system. The macroeconomic impact of her business decision needs to look at the effect of the solar industry on the gross domestic product of the United States, unemployment in the field, the fiscal policy impact, business cycles in the industry, and monetary policy and interest rates as well the international trade impacts of solar installations. Without an understanding of these areas, starting a new solar installation business could be a risk. Gross Domestic Product and Solar Gross domestic product is the market value of the final commodities and services that are produced by any country during a specific time period. In most cases this is measured over a single year (Hubbard, 2012). The gross domestic product (GDP) impact of the solar energy industry is seen in the creation of jobs in the specialized production of solar panels, the installation of solar systems...
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