This paper relates to what I have learned in the Macroeconomics class. For this final term paper; I will write about the U.S. federal government operations and how government leaders handle macroeconomic issues in our economy. We will discuss a couple of current economic issues and what the federal government is doing to reach solutions. I will also address U.S. unemployment issues, international trade, fiscal and monetary policies, and methods of alternative energy, along with the Federal Reserve’s role to confidently curb recession and avoid inflation The U.S. federal government is actively involved in assuring national security through counterterrorism techniques. They perform strategic planning to give surety of macroeconomic financial stability, and economic development. Government provides financial, political, and social stability in our economy and controls macroeconomic aggregate demand and aggregate supply. Congress and the President control fiscal policy. The Federal Reserve has complete control of the monetary policy. “Fiscal policy is the changes that Congress and or the President make in taxes and public spending that has an impact on the national Gross Domestic Product (GDP) data.” (O’Sullivan, p.212) The GDP (commerce) data is the total market value of domestic goods and services produced only within the geographic area of a country on an annual basis. In accordance to an eHow Contributor, Shane Hall, 2011, reports that, “the burden of various types of taxes distorts funds in the marketplace because the expenses affect the cost and income of goods and services. In the supply side of economics, an increasing tax rate will affect the economic activity and hinder the growth of the economy. (Hall, 2011) In connection ...
... middle of paper ...
...rd of Governors of the Federal Reserve System (FBR), Release and last update March 15, 2011, Press Release: FOMC statement http://www.federalreserve.gov/newsevents/press/monetary/20110315a.htm
Ensinger, D., June 20, 2011 - 8:40 AM, “Bill to Repeal NAFTA Stalled in the House,” Copyright 2007 Economy in Crisis http://www.economyincrisis.org/content/bill-repeal-nafta-stalled-house
Heffner, T., June 20, 2011 – 10:05 AM, “Unethical Predatory Practices,” Copyright 2007 Economy in Crisis http://www.economyincrisis.org/content/unethical-predatory-practices
Miller, R, L., (2010), Economics Today, (15th edition), Boston: Pearson Addison-Wesley
Petruno, T., June 18, 2011, U.S. Economy: Federal Reserve: “More Fed Stimulus? - Don’t Count on It!” Copyright 2011, The Los Angeles Times http://www.latimes.com/business/la-fi-petruno-20110618,0,5811817.column
There is perhaps no other political issue in our contemporary society that is more pertinent, pervasive, and encompassing than a nation’s economy. From the first coins used in Greece and the Asia Minor in the 7th century BCE, to the earliest uses of paper money, history has proven time and time again that the control of a region’s economy is absolutely crucial to maintaining social stability and prosperity. Yet, for over a century scholars have continued to speculate why the United States, one of the world’s strongest and most influential countries, has one of the most unstable economies. Although the causes of this economic instability can be attributed to multiple factors, nearly all economists agree that they have a common ancestor: the Federal Reserve Bank – the official central bank of the United States. Throughout the course of this paper, I will attempt to determine whether or not there is a causal relationship between the Federal Reserve Bank’s monetary policies and the decline of the U.S. economy. I will do this through a brief analysis of the history and role of this institution, in addition to the central banking system in general. In turn, I will argue that the reckless and intentional manipulation of the economy by the Federal Reserve Bank, through inflation and the abolishment of the gold standard, has led to the current economic crisis in the United States.
Mallin, Jay. "Federal Reserve (Fed).” The New York Times, n.d. Web. March 21, 2012. .
As a result of the Great Recession of 2007 to 2009, the United States government implemented various fiscal policies in an effort to stimulate the economy. How the government responded as well as how those responses will affect the U.S. economy into the future are the focus of a proposed research study. In order to ensure an appropriate focus for the proposed research study, problems in existing literature must be evaluated.
The Federal Open Market Committee, consisting of the seven members of the Board of Governors and five members elected by the Federal Reserve banks, is responsible for the determination of Federal Reserve Bank policy in the purchase and sale of securities on the open market. The Federal Advisory Council, whose role is purely advisory, consists of 12 members if they meet membership qualifications.
Reserve, Martenson Report, Treasury bills, Treasury bonds." ChrisMartenson.com. 25 Aug. 2009. Web. 7 Nov. 2009.
The federal government influences economic activity in an attempt to maintain growth, employment, and price stability through fiscal policies. Our government influences economic activity by implementing a discretionary fiscal policy or a monetary policy. A discretionary fiscal policy is used to expand or contract economic growth. Monetary policies are by the Federal Reserve to expand or contract the economy’s wealth. Both discretionary and monetary policies affect the aggregate demand and the aggregate supply.
Author Unknown (1994). The Federal Reserve System: Purposes and Functions (5th ed.) Published by Library of Congress
This is because of the recent election , the President is who appoints new board members so we are currently in the process of getting new members. The 12 districts are divided by major cities in the regions , these cities are San Francisco , Dallas , Kansas City , Minneapolis , Chicago , St. Louis , Atlanta , Cleveland , Richmond , Philadelphia , New York , & Boston. Recently , the federal has left their tight money policy that originated back during the brief economic crash of 2007-2009 , we now are reaching a point of stability. This may be because its alot easier to function & create plans with only 3 members rather than having to go through the usual amount of members. Since 2015 , the Fed Reserve has focused on returning to a more regulatory monetary policy which is the same policy we use today but has been tweaked a little to suit our current
Government spending has become a hot topic of debate after economic recession of 2008 but it’s still a controversy among the economists. Some economists favor role of government in the economy for balance of economic shocks, whereas others consider that government generate shocks and instability in economy. Keynes was first who introduced government involvement in economy after the recession of 1930. Theories of Keynes regarding the government spending have again taken attention in the financial crisis of 2008 in America, which has spread all over the world through trade openness. This financial crisis has decreased the economic growth and employment rate in whole world especially in the developed countries. Thus some economist suggests that
Falk, Julie. “Fiscal Lockdown.” Dollars & Sense. July-Aug. 2003: 19+. SIRS Researcher. Web. 24 Mar. 2011.
The U.S. government used to have a laissez faire policy with everything that had to do with the economy. Today the government is an important factor in the economy and helps keep the economy stable. There are many ways that the government watches over the economy; it passes laws that affect how business is done, protects workers and helps keep the middle class heathy, makes sure bussiness do not mislead consumers, and banned dangerous substances from being made in the U.S. There are many ways that the government othe United States affects the economy.
United States Federal Reserve. (February 11, 2014). Monetary Policy Report. Retrieved June 18, 2014, from http://www.federalreserve.gov/monetarypolicy/mpr_20140211_summary.htm
In time of economic crisis the government has a choice to cut spending or increase spending for public goods and services. “In 2009, Congress passed the American Recovery and Rein- vestment Act, which authorized $787 billion in spending to promote job growth and bolster economic activity”(Stratmann/Okolski 3). John Maynard Keynes, an economist of 20th century, suggest that the government should run a deficit if it will create jobs and increase capital gain. This theory support the current stimulus package that has been introduce during President Obama’s term. Although the flaw with this concept is that it makes the assumption the government has done studies and understands which areas needs the funding the most and knows where it will be beneficial, realistically that is not true. “Federal spending is less likely to stimulate growth when it cannot accurately target the projects where it will be most productive” (Stratmann/Okolski 2). This can be seen because political figures will spend money where it directly supports their needs as well. For instance, the political figure would rather spend money to things that will yield a p...
The economy tend to move from boom to recession, it is difficult for government to maintain and achieve macroeconomics objectives. At this time, there are “conflicts between government macroeconomic objectives”, which is this extended essay main theme. This essay will look at the government macroeconomic objectives, the conflicts between macroeconomics objectives, the best policy or mixture of policies to minimize the conflicts between macroeconomics objectives and recommendations, which are classified as main objectives and additional objectives.
The appropriate role of government in the economy consists of six major functions of interventions in the markets economy. Governments provide the legal and social framework, maintain competition, provide public goods and services, national defense, income and social welfare, correct for externalities, and stabilize the economy. The government also provides polices that help support the functioning of markets and policies to correct situations when the market fails. As well as, guiding the overall pace of economic activity, attempting to maintain steady growth, high levels of employment, and price stability. By applying the fiscal policy which adjusts spending and tax rates or monetary policy which manage the money supply and control the use of credit, it can slow down or speed up the economy's rate of growth in the process, affecting the level of prices and employment to increase or decrease.