The Current Macroeconomic Situation Of The U.s.

794 WordsAug 19, 20154 Pages
The “current macroeconomic situation” in the U.S. has improved greatly over the past few years. With the stock market at an all-time high, with data trends of unemployment trending down from 5.4 percent in April, 5.5 percent in May and now at an all-time low of 5.3 percent in July (U.S. Bureau of Labor Statistics, 2015). Last quarter economic growth was at 5 percent, relative mild consumer price-inflation, and the bonanza of cheap gas, there is increased optimism about the U.S. economy (Chafuen, A, 2015). Yet most of America is still concerned about unemployment, inflation and recession. Per CNN, only 42% of American’s thought the economy was in good shape. That is not even half of America but the numbers are the best they have been in…show more content…
The effects include an increase in the money supply, lower interest rates and a rise in overall aggregate demand (AboutNews, n,d,). This would boost growth as measured by Gross Domestic Product as well. As stated above the current economic situation is one that looks like it could be a very strong year. The U.S. announced strong third-quarter Gross Domestic Product growth of 3.9%. The unemployment rate is at an all-time low of 5.3 percent. Inflation has decreased as well to 1.8 percent. Even though with half of America believing the economy is in bad shape. We are not in a recession. A recession is technically defined as two straight quarters of a declining Gross Domestic Product, and this is not the case. An appropriate fiscal policy that could be used to make the economy even stronger would be an expansionary fiscal policy, even though the economy is not in a recession. This fiscal policy results in increased government spending and/or lower taxes. In order to close this gap, the government will typically increase their spending which will directly increase the aggregate demand curve, since government spending creates demand for goods and services. At the same time, the government may choose to cut taxes, which will indirectly affect the aggregate demand curve by allowing for consumers to have more money at their disposal to consume and invest. Government spending has increased contributing to economic
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