Question

How do you think the Demand and Supply patterns have changed in the United States since 2008 when the recession started?

Answer 1

The demand and supply patterns in the United States have shown drastic changes since the time of Great Recession in the economy. During the time of Great Recession in the economy, overall aggregate demand fell in the economy because of fall in consumption spending, investment spending and Net exports of the nation. This also led to building up inventories of the firm and thus aggregate supply also reduced. Unemployment rates touched very high levels in the economy.

However, after the government and Central bank of the nation pursued expansionary fiscal and monetary policies, the aggregate demand in the economy increased again as the economy started recovering and inventories of the firm started diminishing and this increased production level in the economy which also increased overall supply in the economy. Thus, unemployment rates fell as labor demand increased with increase in production level in the economy.