Question

In: Economics

Please listen to this podcast from The Federal Reserve, “The Business Cycle.” Consider how the economy...

Please listen to this podcast from The Federal Reserve, “The Business Cycle.” Consider how the economy has performed throughout your life. Identify a time you believed the economy was in a peak or a trough. When was the economy expanding? When was it contracting? Describe the overall trajectory of the economy throughout your life.

,“The Business Cycle.”

Solutions

Expert Solution

Ans:- Business cycles are ordered in four distinct stages, to be specificied, expansion, peak, withdrawal and trough.

I would say one never truly knows how the economy is going to progress later on, as it is so worldwide now, that a downturn in one nation sets off a progression of ventures in different nations. Be that as it may, if the money related framework is sufficient and the current record, a few nations prevent such despondencies.

For an incredible duration the one time frame when the US economy was in peak and enlisted moderate GDP growth rate was in 2007 as the unemployment rate was sensible and inflation was inside range. Ofcourse the trough was in 2009 when the economy confronted money related crisis in light of Mortgage based protections, because of which the unemployment rate was extremely high went with the inflation rate.

The economy extended just after a few measures were taken after each trough by major political bodies, for example, when Fed cut loan fees or after the LTCM Long term capital administration crisis in 1998 or after Obamacare in 2010.

The economy contracted moderately during the LTCM crisis in 1998, however more so during the money related crisis of 2008 where the unemployment rate was surprisingly high.

The overall trajectory is that at whatever point the economy is in expansion mode the fed raises rate and afterward cuts it. During any crisis, the fed itself intercedes, to siphon in more money or salvage the pained firms in any capacity through rebuilding. Strong dollar empowers a higher growth rate with lower unemployment rate which is as of late being seen in the economy.

***Hope its helpful to you...please do like for encourages ourselves***


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