Question

What is The "Current Macroeconomic Situation" In the U.S. (e.g. is The U.S. Economy Currently Concerned about Unemployment, Inflation, Recession, Etc.)? What Fiscal Policies And Monetary Policies Would Be Appropriate At This Time?

Answer 1

The current Macroeconomic situation is quite unstable in the USA. The COVID-19 has led to the fall in the economic activities unprecedently. the unemployment rate has increased massively. Further, the investment and consumption expenditure will further decline as people do not have money to spend on. The government is concerned about the recession and unemployment. The fall in the demand would cause a fall in inflationary pressure as well. Thus, inflation is not a matter of concern for the government.

Government intervention is a must here to correct the further fall in the expenditure in the economy. The government needs to go with expansionary monetary and fiscal policies.

The Monetary policy is being operated through the Federal Reserve, The Fed has already started expansionary monetary policy by slashing down the policy rates drastically, Further, the Fed has hinted at the quantitative easing measures in near future if things get further worse.

The government is operating the fiscal policy, government has announced the fiscal stimulus package worth $ 2 trillion to stimulate economy. government is expected to continue to make expenditure into the next year as well. The things are not going to get better so soon,