Question

In: Economics

Analyze recent major macroeconomic problem(s) experienced by the United States. Describe the macroeconomic phenomena and relate...

Analyze recent major macroeconomic problem(s) experienced by the United States. Describe the macroeconomic phenomena and relate it to theories and concepts of macroeconomics. Support your arguments with examples, diagrams, and equations. Finally, provide policy (monetary and fiscal) solution(s) to the problem(s) you choose to discuss

Solutions

Expert Solution

Recent major macroeconomic problem experienced by United States

-> Recession due to the virus (Businesses halt, house rent crisis, unemployment all leading to a recession)

Description as follows

1. AD curve is shown as follows (reasons of shifting are also mentioned)

2. AS curve looks like (reasons of shifting are also mentioned)

3. At equillibrium (100% employment)

4. During recession AD moves to left, (i.e. AD decreases) as shown below

5. This is the problem.

Employment very low. Output very low. Thus recession in the economy. To revive the economy back, AD should move to the right. So, for this reason, monetary and fiscal policy can be used.

a. Expansionary fiscal policy (Increase in government spending/Decrease in taxes)

b. Expansionary monetary policy (Increase in liquidity using interest rate, reserve requirement and open market operations)

Both the expansionary policy may increase AD and thus the economy can come back to normal stage of employment and output.

Rahul Sunny answered 1 year ago
Next > < Previous

Related Solutions

The United States has experienced a large trade deficit in recent years. Analyze the implications of...
The United States has experienced a large trade deficit in recent years. Analyze the implications of a growing trade deficit on the future growth of the United States USE CITATION
What are Canada's recent macroeconomic problems? Describe the macroeconomic phenomena using examples diagrams and equations. Finally...
What are Canada's recent macroeconomic problems? Describe the macroeconomic phenomena using examples diagrams and equations. Finally provide fiscal and monetary solutions to the problems
Briefly describe the recent history of United States and world trade, and list the major U.S....
Briefly describe the recent history of United States and world trade, and list the major U.S. trading partners.
In recent years, the United States has experienced large increases in oil production due in large...
In recent years, the United States has experienced large increases in oil production due in large part to a new technology, hydraulic fracturing (“fracking”). Fracking involves injecting a mixture of water, sand, and chemicals into rock formations at high pressure to release oil and natural gas. An article in the Wall Street Journalindicates that economies of scale in fracking may be considerably smaller than in conventional oil drilling. If this view is correct, what would the likely consequences be for...
In recent years, the United States has experienced large increases in oil production due in large...
In recent years, the United States has experienced large increases in oil production due in large part to a new technology, hydraulic fracturing (“fracking”). Fracking involves injecting a mixture of water, sand, and chemicals into rock formations at high pressure to release oil and natural gas. An article in the Wall Street Journalindicates that economies of scale in fracking may be considerably smaller than in conventional oil drilling. If this view is correct, what would the likely consequences be for...
Describe the use of heroin in the United States from the 1960's to today?
Describe the use of heroin in the United States from the 1960's to today?
Even though deposit insurance existed, the United States experienced a major financial crisis from 2007 to 2009 because:
Even though deposit insurance existed, the United States experienced a major financial crisis from 2007 to 2009 because: banks refused to honor the deposit insurance scheme. the deposit insurance system failed during that time. there was a run on shadow banks, which were not covered by deposit insurance. there was excess competition from other countries.
Describe the recent 10 year history of Fiscal Policy in the United States? Must be 250...
Describe the recent 10 year history of Fiscal Policy in the United States? Must be 250 words and nonplagarized material please
Describe why the nursing shortage is a major national issue in the United States. How could...
Describe why the nursing shortage is a major national issue in the United States. How could a nursing shortage in other countries around the world affect the nursing shortage in the United States.
The Amendment(s) to the United States Constitution having implications in criminal processes in the United States...
The Amendment(s) to the United States Constitution having implications in criminal processes in the United States are : a. The Fourth Amendment b. The Fifth Amendment c. The Sixth Amendment d. All of these The Fifth Amendment of the Constitution provides what right(s) to a person tried with a crime. a. The right to not be forced to testify against him or herself at the trial. b. The right to have an attorney, even if the accused cannot afford to...
ADVERTISEMENT
Subjects
ADVERTISEMENT
Latest Questions
ADVERTISEMENT