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Forecasting the Future of the US Economy Over the Next Year - Research Paper Example
Author : wschneider
Macro & Microeconomics
Pages 5 (1255 words)
Micro and Macro Given the great worsening of balance sheets in US households as well as businesses, the probable decrease of the volume of potential output of the US economy predictions of the economy of the country in next years’ path carries a great degree of uncertainty…
However, the recovery of the U.S. has been expected to carry on, albeit at the sluggish pace (Elwell, 21). This paper is aimed at providing forecasts on the future of the US economic variables. Effects on economic variables: The level of inflation has been very high since 2007. This high level of inflation is now considered as the biggest problem in the country by the Fed. Due to this high level of inflation, consumers are not getting capable of purchasing costliest goods and services and hence business organisations which are engaged in production of these goods and services are leaving the industry. Again this is reducing the level of income in the country and hence the level of demand for necessary goods and service. The Fed is expecting to have a subdued in the next few years because of weaker level of real economic activities prevailing in the country. But the Fed is expecting to have a lower level of inflation rate in 2013 which is expected to increase the volume of economic activities in the country. The Fed is expecting that the current rate of change in overall prices is expected to fall to 1% to 2% from its current level of 3% within five years. ...
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