Macroeconomic in the US - Assignment Example

Macroeconomic in the U.S. Macroeconomic in the U.S. In each country’s economy, a vital roleis played by the policy makers in regulating the different activities. These policymakers have a main goal of making sure that the economy of the country is stable. It is the objective for every policy maker to see that the country is stable, which is critical in improving social welfare and economic growth of the citizens. Of late, the United States economy has faced many problems. This is because the United States economy has not recovered fully from the fiscal crisis in 2009 (Gliksberg, 2013).

This fiscal crisis affected the economy mostly. At the moment, one of the major economic issues that the United States economy is facing is an increasing number of unemployed individuals. Though there have been some improvements in creating more jobs, the unemployment rate remains high in the United States.For the last ten years, the United States unemployment statistics have revealed that the unemployment rate is still high. In a significant part of 2003, the unemployment level was below 6 percent.

Throughout 2004, the unemployment level was still below 6 percent (Gliksberg, 2013). After the fiscal crisis in 2008, the unemployment level increased severely making many Americans to be jobless. As stated by the United States Bureau of Statistics, the unemployment level was 7.3 percent in November. Due to this, necessary policies need to be adopted so that to bring the unemployment level to sustainable levels. There are different macroeconomic solutions that may assist in helping solve the present unemployment issue in the United States economy.

These solutions are both monetary and fiscal policies, which help in maintaining the stability of the economy (Li, 2013). As the present level of unemployment is essentially recurring, it is vital to consider executing expansionary monetary and fiscal policies. An expansionary financial policy may be implemented correctly by taxation, government purchases and also transfer payments. The United States government needs to increase its spending on healthcare and infrastructure. For example, when roads are built, there will be a high demand for materials.

This will create jobs for engineers, drivers among other individuals. When taxation is reduced by the government, there will be an increase in disposable income for households. This is reflected directly by increased consumption and will lead to a demand increase (Li, 2013). In meeting this demand increase, firms will be needed to employ more workers, therefore, reducing the unemployment level. These expansionary financial policies play a vital role in increasing the total expenditure and creating more jobs (Silvia & Iqbal, 2011).

In addition, the policy makers may make use of expansionary monetary policies in reducing unemployment levels. The central bank needs to reduce the interest rates as it will make borrowing be inexpensive. Borrowing will increase when the interest rates are low leading to an increase in investments (Li, 2013). Moreover, the central bank needs to reduce the reserve requirements so that the financial institutions could lend more. These expansionary monetary policies increase the supply of money in the economy.

In conclusion, the recent unemployment rate in the United States is 8.25 percent. Over the past few years, the trading economics has revealed that the Gross Domestic Product has expanded. As the expansionary monetary policies are aimed to be implemented by the government, the inflation rate is projected to reduce below 2 percent. In addressing these economic issues in the United States economy, policy makers may use different expansionary monetary policies. ReferencesLi, J. (2013). The effectiveness of fiscal and monetary policy responses to twin crises.

Applied Economics, 45(27), 3904-3913.Silvia, J., & Iqbal, A. (2011). Monetary Policy, Fiscal Policy, and Confidence. International Journal Of Economics & Finance, 3(4), 22-35.Gliksberg, B. (2013). Monetary policy and fiscal limits with no-default. European Economic Review, 64285-304.