Question

Research the following question using the Federal Reserve's Beige Book Summary for the latest quarter: is our economy in the recession or growth/expansion phase of the business cycle?

Answer 1

According to the summary of the Beige Book, the US economy has recovered from the recession and are into the growth stage. It is ascertained one the basis of following rationale.

1. All 12 Federal Reserve districts are showing growth and economy is expanding. Precisely, 11 federal reserve districts are showing modest growth and Dallas is showing an exceptional and robust growth.

2. Unemployment rate is falling down within the range of 4% and sectors are reporting that they are finding difficulties in getting the workers of their requirements. It means that labor market is going through the tight situation and firms are not getting their labor demand fulfilled with ease. It is confirmed by the wage increase in some of the sectors by the firms.

3. Price level is also increasing. It is an indication of the demand pull inflation in the economy. It happens when the economy grows and firms demand more input factors of the production.

4. Federal Reserve is also maintaining the Federal Fund rate above the level of 0%. it is an indicator that economy is in growth phase.

Reference:

The Beige Book: Summary of Commentary on Current Economic Conditions By Federal Reserve District. Retrieved from: https://www.federalreserve.gov

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