Eco 372 Economic Analysis
Eco 372 Economic Recommendations
Economic Recommendations
August 7, 2012
ECO/372
In December, 2007, an economic downturn began. A recession ensued and by September, 2008, it earned the name of the Great Recession (Yglesias, 2011). The unemployment rate, declining values in the housing market, increasing foreclosures, bankruptcies, the swelling federal debt, increasing food prices, and multiplying fuel prices demanded an economic response through fiscal policy and monetary policy. As a result of those responses, the United States is in a slow recovery phase. An analysis and recommendation of the current economic state includes an observation of the proprietorship of policy interventions.
Economic Factors and the Impact on Aggregate …show more content…
The aggregate demand may be unchanged based on these expectations. The initial forecast is positive. This would shift the demand to the right. However, the correction Mr. Bernanke makes lessens the degree of expectations. This will shift aggregate demand back. The actual degree of shifts to both AD/SAS is difficult to exactly ascertain.
Expectations make it difficult to specify precisely what effect it has on the AD/AS. The expectation from Mr. Bernanke, chairman of the Federal Reserve Bank, has a greater impact on society and the economy as a whole more so than Robert Jindel, governor of Louisiana, as an example. It does not eliminate the importance of expectations as shift factors. It simply means that economists are not sure what the net effect of a change in expectations on aggregate demand is (Colander, 2012).
Consumer …show more content…
• The Federal Reserve Bank to remain mandating monetary policy with Mr. Bernanke as chairman.
A review of the fiscal policies pending in congress is necessary for an accurate recommendation. The bills chosen are inclusive to the proposal and are shown below. The impact of these fiscal policies on the aggregate demand is designed to shift right.
• S.940 – Close Big Oil Tax Loopholes Act repeals five tax subsidies for U.S. oil companies, closes a loophole used to disguise foreign royalty payments and reduces the domestic tax bill. The monetary gain will be applied to the federal budget deficit. Introduced May 17, 2011, and has not passed yet (Open Congress, 2012).
• S.1660 – American Jobs Act of 2011 which extends several stimulus measures scheduled to expire the end of 2011, including the employee payroll tax holiday, extended unemployment insurance, and accelerated expensing for businesses. New measures were included to prevent layoffs and encourage businesses to hire new workers. $35 billion in aid to local governments to slow job losses in the public sector, about $100 billion in infrastructure improvement programs, tax credits for businesses to hire long term unemployed workers, and reduction in the level of payroll taxes for businesses. This will add $447 billion to the deficit over the next ten years, but offsetting the costs by
Economic Recommendations
August 7, 2012
ECO/372
In December, 2007, an economic downturn began. A recession ensued and by September, 2008, it earned the name of the Great Recession (Yglesias, 2011). The unemployment rate, declining values in the housing market, increasing foreclosures, bankruptcies, the swelling federal debt, increasing food prices, and multiplying fuel prices demanded an economic response through fiscal policy and monetary policy. As a result of those responses, the United States is in a slow recovery phase. An analysis and recommendation of the current economic state includes an observation of the proprietorship of policy interventions.
Economic Factors and the Impact on Aggregate …show more content…
The aggregate demand may be unchanged based on these expectations. The initial forecast is positive. This would shift the demand to the right. However, the correction Mr. Bernanke makes lessens the degree of expectations. This will shift aggregate demand back. The actual degree of shifts to both AD/SAS is difficult to exactly ascertain.
Expectations make it difficult to specify precisely what effect it has on the AD/AS. The expectation from Mr. Bernanke, chairman of the Federal Reserve Bank, has a greater impact on society and the economy as a whole more so than Robert Jindel, governor of Louisiana, as an example. It does not eliminate the importance of expectations as shift factors. It simply means that economists are not sure what the net effect of a change in expectations on aggregate demand is (Colander, 2012).
Consumer …show more content…
• The Federal Reserve Bank to remain mandating monetary policy with Mr. Bernanke as chairman.
A review of the fiscal policies pending in congress is necessary for an accurate recommendation. The bills chosen are inclusive to the proposal and are shown below. The impact of these fiscal policies on the aggregate demand is designed to shift right.
• S.940 – Close Big Oil Tax Loopholes Act repeals five tax subsidies for U.S. oil companies, closes a loophole used to disguise foreign royalty payments and reduces the domestic tax bill. The monetary gain will be applied to the federal budget deficit. Introduced May 17, 2011, and has not passed yet (Open Congress, 2012).
• S.1660 – American Jobs Act of 2011 which extends several stimulus measures scheduled to expire the end of 2011, including the employee payroll tax holiday, extended unemployment insurance, and accelerated expensing for businesses. New measures were included to prevent layoffs and encourage businesses to hire new workers. $35 billion in aid to local governments to slow job losses in the public sector, about $100 billion in infrastructure improvement programs, tax credits for businesses to hire long term unemployed workers, and reduction in the level of payroll taxes for businesses. This will add $447 billion to the deficit over the next ten years, but offsetting the costs by