Leadership style of candidates J.B. Davidson and Jerry Popovich
Aggregate Demand and Supply Models
As economic advisors to the U.S. President, we have evaluated the current state of the U.S. economy. There are recommendations we have provided to improve the economy. Our recommendations include the evaluation and analyzing of four economic factors; unemployment, expectations, consumer income, and interest rates and how each affect aggregate supply and demand.
Unemployment
Unemployment recently has been a major problem in the United States. We have to get our abled workers back to work. Current information from the U.S. Department of Labor in October 2012 reports that the unemployment rate was at 7.9 percent. To help solve some of the problems with unemployment, we recommend that government provide tax cuts to small businesses. Small businesses are at a disadvantage competing against larger and more powerful businesses. Every penny earned is valuable in small business, to continue day-to-day operations. Providing a tax cut to small businesses will provide more money to invest back into the company. This creates the ability for higher production, which creates the need for more employees, therefore, creates jobs.
Outsourcing has become popular with major companies since the 90s. In 2011, “Wall Street reported major companies cut their workforce by 2.9 million people in one decade and hired 2.4 million people oversees.” (Jilani, 2012). The reason major companies outsource jobs because it is cost saving and allows companies to pay lower wages in countries outside of the United States. Forcing limitation on companies outsourcing, will create more jobs in the United States. In addition, more jobs mean more people are working. Taxes paid from these people, will go back to the government, and help the budget.
Expectations
Expectations in the market affect aggregate supply and demand. People tend to make larger purchases and investments based on expectations. In housing market, investors snatched up houses in the
As economic advisors to the U.S. President, we have evaluated the current state of the U.S. economy. There are recommendations we have provided to improve the economy. Our recommendations include the evaluation and analyzing of four economic factors; unemployment, expectations, consumer income, and interest rates and how each affect aggregate supply and demand.
Unemployment
Unemployment recently has been a major problem in the United States. We have to get our abled workers back to work. Current information from the U.S. Department of Labor in October 2012 reports that the unemployment rate was at 7.9 percent. To help solve some of the problems with unemployment, we recommend that government provide tax cuts to small businesses. Small businesses are at a disadvantage competing against larger and more powerful businesses. Every penny earned is valuable in small business, to continue day-to-day operations. Providing a tax cut to small businesses will provide more money to invest back into the company. This creates the ability for higher production, which creates the need for more employees, therefore, creates jobs.
Outsourcing has become popular with major companies since the 90s. In 2011, “Wall Street reported major companies cut their workforce by 2.9 million people in one decade and hired 2.4 million people oversees.” (Jilani, 2012). The reason major companies outsource jobs because it is cost saving and allows companies to pay lower wages in countries outside of the United States. Forcing limitation on companies outsourcing, will create more jobs in the United States. In addition, more jobs mean more people are working. Taxes paid from these people, will go back to the government, and help the budget.
Expectations
Expectations in the market affect aggregate supply and demand. People tend to make larger purchases and investments based on expectations. In housing market, investors snatched up houses in the
References: UNITED STATES DEPARTMENT OF LABOR. Latest Numbers. Unemployment Rate. Retrieved from http://www.usatoday.com Colander, D. C. (2010). Macroeconomics (8th ed.). Boston, MA: McGraw-Hill/Irwin. Davidson, P. (February 9, 2012). U.S. median household income up 4% Q4-2011. Retrieved from http://www.usatoday.com Jilani, Z. (2012). Think Progress Economy. Retrieved from http://thinkprogress.org/economy/2011/04/19/159555/us-corporations-outsourced- americans/