Question

Money & Banking ,Evaluating Economic Performance, Government & the Economy.

1.   What has the US government done to create economic growth, stability, full employment, freedom, security, equity, and efficiency?  

2. Have these policies been successful in reaching the economic goals of the United States?

• In your response to #2 you should address how gross domestic product, inflation, and gross domestic product per capita were affected.

Answer 1

1)

                                    The US government has done the following in order to create economic growth in the country thereby achieving economic stability, equity and efficiency which has led to employment freedom and security in the nation

· There have been rising trends of tax cuts and additional spending in the economy which has been able to induce more money in the economy and has assisted in the economic growth of the nation.

· There have been policy measures to implement trade protectionism, especially by inducing more tariffs on specific nations that have been destroying the trade benefits of the nation.

· The corporate taxes were lowered to 20% and additional tax rebates were given

· Deregulation policies have been implemented whenever possible

· Infrastructure spending have been boosted in the economy which has created opportunity for more jobs and has been instrumental in expansion of the economy.

· Stimulus packages have been implemented whenever deemed necessary so as to maintain stability in the economy

· Following the mortgage crisis, stimulus package of more than $80 billion were provided which were primarily aimed at creating construction jobs which were hit by the crisis

· Business investments have been boosted over the years so as to improve the consumer spending in the economy and hence have been instrumental in boosting the economy of USA

2)

                                    The following are the statistics on the GDP growth rate and inflation which can be used to analyse the impacts of the above policies on achieving the goals

· In 1990’s the GDP of USA stayed around 4% which started to lower from 2005 owing to the housing and mortgage crisis

· The GDP rate continued to be lower till 2009 and reached a second low in 2015 when the investment patterns were affected on a large scale.

· The current spread of corona pandemic has hit the US economy in particular as they have been hit most badly by the pandemic

· Currently USA is the world’s largest economy by nominal GDP and second largest by Purchasing Power Parity terms.

· In terms of GDP per-capita, it is the eighth largest in terms of nominal values and tenth largest in terms of PPP values

· The inflation rates in the nation also have been fluctuating over the years. The economy has been hit by a recession in 2005 and later on a small scale in 2015 ad now in 2020 due to the corona pandemic, all of which have contributed to the falling economic trends in USA

· The stats on GDP growth rate and current levels of GDP on per-capita indicates that there are equity issues which is evident from the fact that although USA is the top economy in terms of GDP, it has a lower rank when it comes to GDP per-capita