Aggregate Demand and Supply Paper

1955 Words Jun 11th, 2013 8 Pages
Aggregate Demand and Supply Models Economic Critique Ken Drake,
ECO 372 Macroeconomics
September 10, 2012
Jason Foster

Aggregate Demand and Supply Models Economic Critique In the United States the economy is currently in a recession, although signs are indicating that the economy is slowly recovering. In an effort to analyze the Unites States economy the unemployment rate, expectations, consumer income, and interest rates have been evaluated. The results of these evaluations are included in this report. Unemployment in the United States fell to 8.1% from 8.3% in July. U.S. employers are said to have added 96,000 jobs in July (KSL News, Sept) . According to reports from the department of workforce services the
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Just like looking for a good time to buy into a stock, a person needs to look at several months of data to find a consistent pattern of troughs and peaks in the supply and demand wave, draw a line to mark out floor and ceiling, and then buy your stocks as the price climbs and sell before it reaches the top. Expectation can now be based on past events laid out in a reoccurring pattern. There is still some guesswork involved however, but not like it was in the past. The downward spiral of the United States economy can be caused by different factors. For example, record high gas prices and sub prime mortgage loans are tow key contributors. With the United States gas prices and unemployment rates at an all time high, it is no secret why consumers naturally spend less money. Consumers are using more money for their gas tanks just to get to work everyday, and the though of going on vacation or shopping is just a dream now for most. A higher price level reduces the purchasing power of the public's accumulated savings account balances (Aggregate demand and aggregate supply, 2012). A higher price level heavily wears out the purchasing power of such assets, the general public is much poorer and will automatically reduce its spending. Sub prime mortgage loans were designed to help people with bad credit purchase a home when they would not qualify. They were also designed to help people who didn't make quite enough income
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