Essay Example on The United States Economy

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The United States economy has been through many significant changes during the period between 2006 to current especially finance crisis of 2007 2008 which causes many effects not only US economy but also the globe s economy The US is the biggest economy system in the world GDP also got effects from many events during accompany year GDP maintain at rate 2 7 in 2006 and decreases down to 1 7 and lowest 0 6 in 2008 due to the financial crisis and it became worse in 2009 at 2 9 The GDP backed to the increase in 2010 at 2 5 From 2010 the GDP still increase up and down from 1 5 to 2 9 Amadeo 2017 The inflation rate maintained at 3 2 in 2006 and go up to 3 8 in 2008 when the financial crisis occurred In 2009 the inflation rate goes down to 0 4 which become to be deflation With many attempts to recover the economy the US inflation rate keeps maintaining the average around 1 5 to 3 2 In 2015 the inflation rate is balanced low at 0 1 but it goes up to 1 3 in 2016 Current US Inflation Rates 2006 2017 2017 According to the Bureau of Labor Statistics the unemployment rate maintains at the low rate at 4 4 and 5 5 in 2006 and 2007 In 2008 the financial crisis happened which led to increase ultimately up to 7 3 and reach highest at 9 9 in 2009 With all the policies from the government helps the unemployment rate going down from 2013 to 2016 at 4 7 though it is still higher than the prior crisis The inflation rate is one of the most people caring about the economic system Unemployment Rate 2018 US economy is the biggest economy system in the world That s mean the increase and decreasing of the US economy can affect globe s economy

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The economic crisis has had a lot of implications for the economy such as business household society not only for the United States but for many other economies in the world The US economy is at the forefront of the global economy so the small or small changes affect the companies The household was struggling with their finance in pay off the mortgage payment due to unemployment rate increases In addition household also reduced their spending such as food and healthcare The National Bureau of Economic Research For society the unemployment rate increase poverty lacking education healthcare providing losing of social and family cohesion due to struggle in finance because household constitutes society Robe and Podipera 2013 4 The US economy has been through many recession and the one is closing this current period is the financial crisis happened in 2008 and all the economic system is still recovering from any damages from the crisis There is much reason to explain the causes of the recession The loose of the expansionist monetary policy from the US government is believed one of the primary cause the crisis happening which encourages the consumption and bubble construction in the US In addition lack of regulation which deals with credit and mortgage which come from many banks leading to the bankruptcy of many banks such as Lehman Brothers in 2008 Zych et al 2015 14 The US government came up many solutions to face up and end up the financial crisis from the Federal Reserve such as monetary and fiscal policies With the monetary policies the government decreases the Federal fund which encourages businesses to develop their works to hire more people which reduce the unemployment rate In the other hand the government also lower the long term interest rate to increase the money supply which similar as put more money to encourage the business to keep their investments For the fiscal policies the government passed the American Recovery and Reinvestment Act which included tax cuts and benefits such as education energy Liborio 2011 To confront with the mistake happened before the crisis in 2008 The President Barack Obama enacted 787 billion dollars American Recovery and Reinvestment Act in February 2009 The Act includes 288 billion which used for tax cuts benefits and about 150 billion for education energy and transportation Liborio 2011 Its purpose also reduced the unemployment rate by 275 billion for federal contracts grant and loan

This Act got many critics that it was not a success because the GDP drop down to 2 9 in 2009 The Act saved 640329 jobs which were smaller than it supposed to save 900000 to 2 3 million jobs In the other hand the Act caused adding more debt and did not reduce the unemployment rate below 9 Amadeo 2018 Macroeconomics plays an important strategic role because it gives an overview of the power and economic direction of each nation in certain periods Therefore macroeconomic monitoring and understanding aim to help each individual identify the future vision and the difficult challenges that need to be addressed by each of them Economic change for every individual in society For example the reference to gold prices and the situation up and down giving people the exact assertion that should buy or sell at that time

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