The Economy, Monetary Policy, and Monopolies
Alesia E. Davis
Strayer University
Eco-100
Dr. Shadrack Koros
December 6, 2013
Analyze the current economic situation in the U.S. as compared to five (5) years ago. Include interest rates, inflation, and unemployment in your analysis.
According to an article in the Wall Street Journal posted on the 6th of December 2013, employers in the United States have continued to increase jobs at a fixed pace and the unemployment rate fell in November, a sign of stronger economic growth that may intensify debate within the Federal Reserve about reducing central bank bond purchases as early as this month. (Wall Street Journal, 2013)
U.S. payrolls rose by 203,000 last month, the Labor Department said Friday. The unemployment rate dropped three-tenths of a percentage point to 7.0%, the lowest level in five years. (Wall Street Journal, 2013)
Economists surveyed by Dow Jones Newswires had forecast nonfarm payrolls would rise by 180,000 and the unemployment rate would tick down to 7.2%. Payroll numbers in September and October were reviewed up by a combined 8,000. Friday's report may strengthen expectations that the Fed will soon slow the pace of its $85 billion a month in bond purchases. At their October meeting, officials were looking to end the program "in coming months." The Fed's program, started in September 2012, is designed to keep long-term interest rates low, boost investment and spur hiring. (Wall Street Journal, 2013, New York Times, 2013)
In October of 2013, the US inflation rate eased for the third straight month to 1 percent, the lowest rate since October of 2009. Primarily due to a drop in gasoline prices in September, the price dropped to ...
... middle of paper ...
...t possible competitors from entering the market. (O'Sullivan, A., Sheffrin, S., & Perez, S. (2012))
The Wall Street Journal - Breaking News, Business, Financial and Economic News, World News & Video - Wall Street Journal - Wsj.com. (n.d.). Retrieved from http://wsj.com
The New York Times - Breaking News, World News & Multimedia. (n.d.). Retrieved from http://NYT.com
Interest rates: The big freeze - Jan. 22, 2013. (n.d.). Retrieved from http://money.cnn.com/2013/01/01/news/economy/interest-rates.moneymag/
O'Sullivan, A., Sheffrin, S., & Perez, S. (2012). Survey of economics: Principles, applications, and tools (5th ed.). Upper Saddle River, NJ: Pearson-Prentice Hall.
Job Creation. (n.d.). Retrieved from http://useconomy.about.com/od/Employment/tp/Job-Creation.htm
The Bell System| History| AT&T. (n.d.). Retrieved from http://www.corp.att.com/history/history3.html
First, I will discuss the time period between 1973-1974. Because the unemployment and inflation rates are higher than normal, we can assume that the aggregate-demand curve is downward-sloping. When the aggregate-demand curve is downward-sloping, we know that the economy’s demand has slowed down. When the economy’s demand has slowed down, businesses have to choice but to raise prices and lay off workers in order to preserve profits. When employers throughout the country respond to their decrease in demand the same way, unemployment increases.
A key to victory this November is the unemployment rate. According to a Bloomberg National Poll conducted in March 8-11, 42% of Americans consider unemployment and jobs as “the most important issue facing the country right now” (Priorities). Although there has been 24 consecutive months of private sector employment growth, the Federal Reserve suggests that the numbers could fade in the coming months. The importance of creating more jobs cannot be stressed enough. No President in the recent era has been reelected with the unemployment rate above 7.2% (Roth). To paint a picture, in late 1982, the unemployment rate topped 10.8 under Ronald Reagan. However, about 36 months later, the rate dropped to 7.2% percent. The drastic drop in the n...
The New York Times. The New York Times, 15 Aug. 2013. Web. The Web.
New York Times. The New York Times Company, 23 Jan. 2010. Web. 22 Jan. 2014.
Chron.com. N.p., n.d. Web. The Web. The Web. 12 Feb. 2014.
The New York Times - Breaking News, World News & Multimedia. Puberty Before Age 10 - A
... TIME." Breaking News, Analysis, Politics, Blogs, News Photos, Video, Tech Reviews - TIME.com. N.p., n.d. Web. 13 July 2011. .
Seelye, Katharine. “Lack of News Doesn’t Deter Coverage.” New York Times. N.p. 16 Oct. 2002. Web. 09 May 2013.
In order to assess the current state of the economy, the examination of important economic indicators or variables has always played a vital role in the understanding of the complex economic systems we live in. The analysis of these economic variables studied by many, not only has served as a tool to evaluate the current economic performance of a country, but also has allowed experts to envisage and continue the pavement of an economy's road. Currently, some economic variables have had favorable improvements indicating a general good outlook for the economy for the following months, requiring a further individual analysis and comparisons in order to foresee crisis or successes.
Tragakes, E. (2012). Economics for the IB diploma (2nd ed.). Cambridge, UK: Cambridge University Press.
O'Sullivan, A., & Sheffrin, S. (2005). Economics. Upper Saddle River, New Jersey: Pearson Prentice Hall.
The crucial importance and relevance of economics related disciplines to the modern world have led me to want to pursue the study of these social sciences at a higher level. My study of Economics has shown me the fundamental part it plays in our lives and I would like to approach it with an open mind - interested but not yet fully informed.
Daly, Mary, Bart Hobijn, and Rob Valletta. 2011. “The Recent Evolution of the Natural Rate of Unemployment.”
Sullivan, A., & Steven M., (2003). Economics: Principles in action. Upper Saddle River, New Jersey : Pearson Prentice Hal