Economic Advisement Paper

1634 WordsAug 7, 20137 Pages
Option 1: Economic Advisement Paper Brittany McCarty, Jake Vickers, & Michelle Williams Learning Team B Eco 372 July 11, 2013 Dr. Samuel Imarhiagbe Two Economic Theories Modernizing over the decades, two main theories support economists, proposals, arguments, and predictions. The first theory is the Classical model perspective and the second theory is the Keynesian model perspective. The first theory promotes a hands-off approach and the second a government intervention approach. The first theory believes that if left alone, the natural market forces would right themselves and eventually achieve the proper balance. The second theory believes that people have to live through the process of…show more content…
The BLS reports that the average annual expenditures per consumer ascended 3.3% in 2011 with a decline of 2% in 2010. The main parts of household consumption rose in 2011 with an 8% advancement in transportation expenses were the largest ratio surge with all major components. The total expenses for food, college student funding, divorce financial support, and charitable donations increased by 5.4%. Spending also increases in health care expenses, housing, apparel, entertainment, and personal insurance and pensions (Board of Governors of the Federal Reserve System, 2012). Consumer expenditures rising during this term will move the aggregate demand curve to the right as increased spending increases demand. This BLS report indicates that the next term should show statistical aggregate demand increases, and according to the Classical model perspective encourages a laissez-faire approach concerning correction of the long-term economic factors (Colander, 2010). The Classical model works perfectly as consumer expenditures are trending on the rise when factoring consumer expenditures. Until a more apparent downturn shows itself, the invisible hand should continue to work naturally. Expectations 2012 In October of this year, the Bureau of Economic Analysis reports the Real Gross Domestic Product which is the United States production of goods and services
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