Aggregate Demand And Supply Models essay

Using the trends of the past five years there are recommendations that our government needs to take head to in order to righter our future, and hopefully they listen soon. Unemployment The economy is affected by many issues from wars to mass destruction, but one area hits harder than the rest; Unemployment. The ‘Bureau of Labor Statistics” (2015) website reflects that the country is on a downward trend Of almost 4. 5% decrease on the unemployment percentage in the past five years.

Having such a large percentage drop in the past five years has allowed the American public to gain positions that will provide for their families.The American public having earning an income flourishes the economy and increased demand for privileged items. As the demand for these items increase so will the supply, which will allow the businesses to increase their profits. When the companies produce more products, they will hire more employees and this helps employ more of the public keeping the unemployment level low, and all above the poverty line. Consumer and Producer/Business Expectations The Consumer and business outlook based upon the previous five year trend and current statistics is positive.Taking into account “the lower unemployment rate, the increased incomes being paid and the need for business to expand the economy will continue to grow” (council of Economic Advisors”, 2015).

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Almost every business will need to expand in production space, employee size or at the very lease distribution to keep up with supply and demand with the customer’s needs. Consumer Income According to “Bureau of Economic Analysis” (201 5), in the state of Arizona over the past five years the Consumer income types based upon source has increased.The gross domestic product has caused inflation to rise across the country including Arizona; however, the income has increased alongside the prices of goods and services to match. Increased income has allowed the tizzies of Arizona to remain competitive in the market with purchasing the needs for their families, and in the job market causing the employers to pay the salaries in which the employees deserve. Certain areas have increased better than others and some have even decreased (“Bureau of Economic Analysis”, 2015). Interest Rates Interest rates are at an all-time low and purposely so at this time.The government feels that they are best hell ping the economy by remaining this way until which time certain objectives can be met. The Federal Open Market Committee expects to see “inflation to rise gradually toward 2 percent over he medium term and the public is at maximum employment stability’ (“Board of Governors of the Federal Reserve System”, 2015).

Keynesian- based recommendations The “Library of Economics and Liberty” (2015) website defined Keynesian Economics as an economic theory of total spending in the economy and its effects on output and inflation.In order to help the economy in the United States the government has to monitor the levels of a few key points that will effect it. First the Unemployment levels need to be kept on the lower end of the scale, below what the traditional “norm” would consider acceptable in order to adjust for these possible “periods of recession or depression in business cycle that leads to unattractive opportunities” (“Library of Economics and Liberty”, 2015).

Another suggestion would be for the government officials to stabilize the government spending and allow for any gaps in time between the implanting in new policies and possible negative effects the time gaps may have on the publics pockets. Lastly, Inflation effects all aspects of the economy from the private sector to business and needs to be kept a bay. TO high of inflation to quick will not allow the economy to keep up and force a Seibel recession. Classical-based recommendations This area will be reserved for the classical-based recommendations portion of the paper.

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