Explore BrainMass

State of the economy

I need some assistance, based on current news, please describe the state of the economy, government fiscal policy and Fedâ??s monetary policy by answering the following questions. Please provide citation where possible

1.What stage of the business cycle is the economy going through? Give several major econ indicators, for example, inflation, unemployment, econ growth, poverty rate (quote your sources of info).
2.What are todayâ??s major macro problems â?" inflation or unemployment? Why do you think so?
3.What kind of fiscal policy is the government conducting and why? What side effects might this policy have?
4.What kind of monetary policy is the Fed conducting to address the problems above? Any side effects here?
5.In your opinion, what economic issue should be on the policy-makersâ?? agenda next. Offer your brief solution.

Solution Preview

1. The economy is currently in an expansionary phase. The last recession ended in 2009, and GDP has been increasing since then (although many people seem to think it isn't). Unemployment is still the major issue that prevents the general public from seeing signs of recovery. It has increased to 9.8 percent in November 2010, up from 7.2% last year. Unemployment is a lagging indicator, meaning that it reflects economic conditions only a while afterwards. This is largely because businesses are spooked by the recent recession, and reluctant to hire employees they fear they may have to lay off again soon. There is also some restructuring going on, and people do not always have the skills they need to ...

Solution Summary

The current state of the economy and how policy makers should address them