USA position in business cycle today
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Please review the following:
A Depression With Benefits: The Macro Case For mREITs
Also visit the Bureau of Economic Analysis and look up the latest new release for real GDP.
Part 1: Discuss where the USA is in the business cycle now. Is this business cycle similar or different than other post-ear cycles? What does your choice imply for what you would recommend for government monetary and fiscal policy?
Part 2: Discuss what a corporation and an individual should do in terms of investment and financing decisions, given what you believe as to where the USA is in the business cycle now.
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Solution Summary
This posting discusses the position of USA in the business cycle and how corporations and individuals should do in terms of investments and finances.
Solution Preview
According to the article "A Depression With Benefits: The Macro Case For mREITs", there is a difference between recession and depression. The article says that a recession can be corrected through monetary policy alone. According to the article, it was a depression that commenced in 2007.
Part 1:
According to the Bureau of Economic Analysis in the 1st Quarter of 2020, the real gross domestic product decreased by 5.0 percent. This decrease shows that currently, the USA is in the contraction/recession stage of the business cycle. This recession is very different because the Federal Reserve has already decreased its interest rates to close to zero and it has stated that it does not intend to reduce the interest rates to negative levels as it has been done by the Central Bank of EU. Currently, Federal Reserve says that it will depend only on quantitative easing for maintaining liquidity in the market and stimulating the economy. Since the GDP of the USA has declined by 5.0 percent even though the Fed Rate is close to zero means that monetary policy alone cannot correct the situation. My ...
Education
- MBA, Indian Institute of Social Welfare and Business Management
- BSc, University of Calcutta
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