Eco 372 Week 2 Economic Analysis

Economic Critique
Learning Team A
ECO/372
August 28, 2013

Maintaining a stable economy is no small challenge for any nation however possessing the ability to change and invent new and created ways of maintaining makes for a thriving economy. This newsletter will summarize the different economic factors that affect aggregate demand and supply such as unemployment, expectations, consumer income, and interest rates within the United States. Additionally, what fiscal policies are recommended by the United States government and whether or not these policies are effective and getting them back on track are discussed.
Unemployment
In the current state of unemployment as of July 2013, twenty eight states have had increases, eight states decreases,
Household Income by Quintiles According to the New York Times Data | All Households | Lowest 20% | Second 20% | Middle 20% | Fourth 20% | Highest 20% | Top 5% | Households (in 1000s) | 113,146 | 22,629 | 22,629 | 22,629 | 22,629 | 22,629 | 5,695 | Lower limit | $0 | $0 | $18,500 | $34,738 | $55,331 | $88,030 | $157,176 | Median number of income earners | 1 | 0 | 1 | 1 | 2 | 2 | 2 | Owner occupied | 62.4% | 49.0% | 58.8% | 68.9% | 80.5% | 90.0% | 92.8% | Renter occupied | 29.2% | 48.3% | 39.7% | 29.9% | 18.7% | 9.6% | 6.9% | Non-family households | 31.93% | 58.92% | 40.02% | 29.96% | 19.12% | 11.64% | 9.36% | Family households | 68.06% | 41.06% | 59.97% | 70.04% | 80.87% | 88.35% | 90.61% | Married couple families | 51.35% | 19.03% | 38.89% | 51.00% | 67.05% | 80.08% | 85.59% | Single-male family | 4.32% | 3.08% | 4.64% | 5.69% | 4.89% | 3.30% | 2.47% | Single-female family | 12.38% | 18.94% | 16.43% | 13.35% | 8.93% | 4.24% | 2.54% |
Interest rate is the cost of borrowing money. The Federal Reserve has lowered interest rates to stabilize the economy. This is one of the fiscal policies they have applied to correct this problem. Yes, the recession of 2007 has caused for lowered interest rates in 2013. The economy has been on a downturn and one of the ways to turn this downward flow around is to lower interest rates. Applying low interest rates will help households across the states save money in addition to businesses finance new spending ("Why Are Interest Rates Being Kept at a Low Level?" 2013). Furthermore, because of the lowering of interest rates, the United States dollar is depreciating. Another policy the government has created is monetary incentives for businesses in hopes of getting them to hire more employees. This process will work however maybe not in the timeframe people want it to happen. Overall, the Federal Reserve plays a vital role in that depreciation however, it has to for the economy to