What current event in the US involves one of the marcoeconom

What current event in the U.S involves one of the marcoeconomic principles?

Solution

Currently US is following a loose monetary and fiscal policy. US currently seems to be worried about unemployment more than inflation which means that the expansion is relatively slow and relatively jobless. Usually when a country is in expansion, it needs to worry more about inflation and this is caused due a rise in increasing demand and this can in turn cause the price levels to rise. if this situation arises then the government will call for tight monetary and fiscal policy.In such a scenario the government should raise interest rates and sell securities in open market operations, government should also raise taxes and/or reducing spending.

The economic expansion in US is not very rapid, hence US should not engage in these type of activities. IF US applies tight economic policy then it take the economy back to recession. US should continue with its current process of quantitative easing and should not engage in fiscal austerity like now.

US should continue concentrating on reducing unemployment. It has imposed a lot of tax on SW imports and has restricted outsourcing of jobs to third world countries in order to provide employment to the citizens of its own country. It has also increased the VISA restrictions for people migrating from other countries for the purpose of job. When the people of an economy of employed, they will start getting income and in turn this will trigger individual spending and investment. Though the growth of the economy is slow, it is steady in US.