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Business Cycle & Economic Growth

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1) Think about different measures of current economic performance and business cycles and discuss what state of the business cycle our economy is currently in. Support your opinion with data.

2) What do you think are the causes of the current state of the economy?

3) What role do financial markets and institutions play in U.S economic growth?

4) Watch this interview with the economist Robert Reich on Democracy Now, http://www.democracynow.org/2013/9/13/inequality_for_all_robert_reich_warns

What role does income distribution play in U.S. economic growth? What should be done to make income distribution more equal? Should there be a living wage? Do you agree or disagree with Professor Reich's view on income inequality? Why?

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1) Think about different measures of current economic performance and business cycles and discuss what state of the business cycle our economy is currently in. Support your opinion with data.

The economy is in a growing phase after the recession. Job numbers continue to improve with the economy adding 139,000 new jobs in February. The dollar continues to gain, despite trouble in places like the Ukraine. Production is up and retail sales data from January shows improvement. While the world is still shaky from the recession and its aftermath, the U.S. economy continues its slow but forward progress. Key segments also continue to improve, while issues in Europe and Asia hold those two regions down.

Jobs are only improving at a modest rate. Private sector jobs are gaining, but slowly. This modest job growth prevents consumer spending and increased production within the country, because the economy cannot sustain on minimal job growth. Production is on track to continue increasing, but figures like the one from January, 2014 show that there are occasional drops. Production dropped from 3.7% in Dec, 2013 to 2.9% in January, 2014. Such movements show that the economy is still not in full growth mode nor ...

Solution Summary

A review of the economy, its phase, and how income distribution and financial markets influence it.

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See Also This Related BrainMass Solution

Business cycles and the current state of the economy.

Read the two articles below and do some of your own research on current macro-economic conditions and the business cycle. National economic data are available from the U.S. Department of Commerce, Bureau of Economic Analysis www.bea.gov

Yellen, Janet L. "Prospects for the Economy in 2008," Economic Letter, Federal Reserve Bank of San Francisco, Accessed February 8, 2008, at: http://www.frbsf.org/publications/economics/letter/2008/el2008-04-05.html#2

"Economics focus: Beyond the business cycle?" The Economist London, October 23, 1999. Article Attached.

In a 2 page double spaced paper, please focus on the following questions.

1. The U.S. has not experienced a recession since 2001. Define a recession and indicate whether you think another one is on the horizon? If yes, give your reasons for why a recession might occur. If you are an optimist, why do you think another recession is not on the way? Use the Yellen article as a foundation for your report.

2. Pick two factors cited in The Economist article that you think will have the most impact on future business cycles. Explain why they are important and whether you think they will contribute to more severe or less severe business cycles.

3. Do you think the business cycle is dead? Why or why not?

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