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In: Economics

As a proponent of either aggregate supply-based growth strategies or aggregate demand-based growth strategies, what would...

As a proponent of either aggregate supply-based growth strategies or aggregate demand-based growth strategies, what would you recommend for the current U.S. economy to achieve stable economic growth?

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Expert Solution

As a proponent of either suppy side or demand side.. i personally think Demand based growth is more crucial for any economy to achieve the stable economic growth. well we learn this through the detailed analysis.

Demand Based component-

1.Consumer spending- This is the most important component of Demand strategies based equipment. The hike in consumption of the peoples of any country here it is in USA , this create a circulation of money in economy this will directly benefit the producer and consumer. which directlya hikes the standard of living and the economic growth.

2.Investment- if we increases the private investment, it directally increase the infrastructure as well as other component of an economy this will directlly help the economy to achieve the stable economic growth. we can increase investment in factories and equipment that will directly result in the rise in quality of products.

3.Government spending- Governement plays the crucial role in the stabillity of growth. Government will increase the investment in public services like, physical infrastructure, education, medicine etc. this will automatically increase the living standard of people and progrresively in economic growth.

4. Net export of USA- Net export means Export minus Import. if this is positive side .i dont think one can stop any country to achieve the stable economic growth.

As above we can see that the Demand strategies are more crucial and efficient in achievieng stable economic growth. That helps any country to achieve the Stabillity. In 2008 , USA faces a crisis. but then Country cane out from that crisis only because of the increase in consumption of the peoples.i dont think that we want any other explanation. we already have tested the demand side strategies to curb the problem of Stable Economic growth.


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