Economic Advisement paper
Christopher Nieto, Veronica Rodriguez,
Reynaldo Morales, Vanessa Monge
9/9/2013
ECO372
Mr. Frank Vigil

Economic Advisement Paper
There are different schools of thought about how the economy arrived at its current state. Conversely, there are different schools of thought on how to restore the economy. There are some who would advocate that going back to the same economic policies that created the currents conditions of the economy. In the following paragraph of this paper team B will discuss the current state of the United States economic recovery from the prospective of Unemployment, Consumer income, Interest rates, and Expectations respectively. This information will be summarized and recommendations made to the president regarding government spending and taxes based on the aforementioned economic factors.
Unemployment
Unemployment is affected by multiple economic factors. A recently suggested factor is consumer and private sector uncertainty. This uncertainty is created by the lack of confidence in the current state of the economy and its recovery. This has forced consumers and the private sector to reduce spending and cut cost, thus driving unemployment. Recent studies have demonstrated that uncertainty has been harming current economic activity. Consumer uncertainty is driving the decline in aggregate demand which forces the reduction in supply. When supply decreases, businesses respond by reducing spending and cutting back cost forcing a reduction in force. The moderate economic recovery drives policy makers to respond to uncertainty by lowering nominal short term interest rates. The private sector, manufactures, respond to the weak economy by eliminating new business ventures, investment, and product process developments in fear of tax increases and budget cuts. One simple recommendation to help reduce unemployment