The Economy, Monetary, and Monoplies

The Economy, Monetary, and Monoplies

Question 1 and 2

If we compare the U.S. economic situation with 2008 economic situation, when the worst economic recession has taken place, so we will then came towards the conclusion that indeed U.S. is showing good growth in 2013 but is still not been able to recover its economy completely.

It would be difficult for us to recall the recession of 2008 as America's economy fell down precariously in that year. The recession of 2008 proves to be the worst for the economy as in the recession of 2007 economy had already stumbled. The recession of 2008 caused a sharp decline in financial and housing markets, and due to the bankruptcies large mortgage got originated.

Now in 2013 situation of the economy is eventually getting better, as GDP has shown an increase of 2.5% by the end of the first quarter of this year, and unemployment and inflation have also shown the decline in their rates compared with their rates in 2008. The increase in the GDP in the first quarter shows that there are huge chances that U.S. will recover soon as acceleration in GDP will cause acceleration in private investments, increase in exports and the decline in the rate of unemployment and decline in the expenditures of the federal government.

Although, the GDP and employment rate are have not been able to recover that much as that was before 2008 crisis. To recover in these areas our government really needs to focus on Monetary policy, as Monetary Policy is the series of actions that are use to affect the level of GDP and inflation by the federal government. Federal Reserve uses to affect the level of inflation and Real GDP. If aggregate demand stimulates by the monetary policy it would be enough for pushing capital markets and labor beyond their capacities, and eventually price and wages will start to rise faster. The whole idea behind monetary policy is the raising and lowering of interest rate, and if the interest rate would be less, people will encourage investing in businesses and inventories which will cause the employment rates and GDP to increase. The second strategy that government should follow for encouraging people in investing is to lower the tax rates charge by investors (United Nation New York, 2013).

Question 3

The monopolies in the United States came in to being with the ...