Aggregate Demand and Supply Model - Economic Advisement
Aggregate Demand and Supply Model Economic Advisement
With a nominal GDP estimated at more than 15 trillion it is clearly the United States economy is one of the largest in the world. A person must have lived in a cave underground for the past several years to not know that the current state of the nation’s economy is in desperate need of improvement. Many academic institutions have thought about how the economy arrived at its current state and how can it be restored. Some would advocate not using the same economic policies that created the current conditions of the economy. Their philosophy is that if we stay the current course the economy would somehow miraculously recover itself over a period of an unknown amount of time. These same individuals believe that people are better off left to fend for themselves in this economy. On the other hand there are others that believe government intervention is the key to a faster economic recovery. In the following paragraph of this paper team C will discuss how the United States economy can recover from macroeconomic factors such as Unemployment, Consumer income, Interest rates, and Expectations respectively. This analysis will be done with the purpose of providing the President recommendations regarding government spending and tax policies.
Aggregate supply and demand looks at the economy as a whole; it is the sum of demand in an economy and can be calculated by adding the spending on consumer goods and services, investment, and not exports. Aggregate supply is the total value of the goods and services produced in a country, plus the value of imported goods less the value of exports (Beggs, 2012).
Unemployment:
Although the total nonfarm payroll employment rose by 163,000 in July, the current unemployment rate remains unchanged at 8.3 % about 12.8 million people currently unemployed. Employment rose in the professional and business service, food service and drinking places, and manufacturing (Bureau of Labor
With a nominal GDP estimated at more than 15 trillion it is clearly the United States economy is one of the largest in the world. A person must have lived in a cave underground for the past several years to not know that the current state of the nation’s economy is in desperate need of improvement. Many academic institutions have thought about how the economy arrived at its current state and how can it be restored. Some would advocate not using the same economic policies that created the current conditions of the economy. Their philosophy is that if we stay the current course the economy would somehow miraculously recover itself over a period of an unknown amount of time. These same individuals believe that people are better off left to fend for themselves in this economy. On the other hand there are others that believe government intervention is the key to a faster economic recovery. In the following paragraph of this paper team C will discuss how the United States economy can recover from macroeconomic factors such as Unemployment, Consumer income, Interest rates, and Expectations respectively. This analysis will be done with the purpose of providing the President recommendations regarding government spending and tax policies.
Aggregate supply and demand looks at the economy as a whole; it is the sum of demand in an economy and can be calculated by adding the spending on consumer goods and services, investment, and not exports. Aggregate supply is the total value of the goods and services produced in a country, plus the value of imported goods less the value of exports (Beggs, 2012).
Unemployment:
Although the total nonfarm payroll employment rose by 163,000 in July, the current unemployment rate remains unchanged at 8.3 % about 12.8 million people currently unemployed. Employment rose in the professional and business service, food service and drinking places, and manufacturing (Bureau of Labor
References: Beggs, J. (2012, August). Microeconomics 101. Retrieved from http://economics.com/od/economics-basics/u/Microecnomics-lol.htm Bureau of Labor Statistics. (2012, August). Retrieved from http://www.bls.gov/news.release/empsit.nr0.htm Economic Outlook. (2012, August). Retrieved from http://www.kiplinger.com/businessresource/economic-outlook/index.html?si=1 Economic Report of The President. (2012, February). Retrieved from http://www.nber.org/erp/ERP_2012_Complete.pdf Green, G., & Coder, J. (2012, March). Household Income Trends. Retrieved from http://www.sentierresearch.com/reports/sentier_Research_Household_Income_Trens_Report_January_2012_12_03_01.pdf Muddy Water Macro. (n.d.). Retrieved from http://muddywatermacro.wustl.edu/wage-price-adjustment-deflatio Rational Expectations Theory. (2012, August). Retrieved from http://www.investpedia.com/terms/r/rationaltheotyofexpectations.asp#axzz23Ny4iYP2