The Economy, Monetary Policy and Monopolies

[Name of the Professor]

The Economy, Monetary Policy and Monopolies

Abstract

The purpose of this research paper is to analyze the imperfectly competitive markets and the factors and mechanisms of growth. This paper also aims to analyze the role of government in managing the economy.

Table of Contents

Abstract2

Introduction4

Discussion4

Economic Situation in US as Compared to Five Years Ago4

Strategies to Create Employment Opportunities4

Increase Unemployment Benefits5

Increase incentives for small businesses5

Antitrust Policy used in the Past Fifty Years5

Methods to Identify Groups of Customers to Receive Discount Cards6

Reasons: A Monopoly may or may not be Efiicient in an Economy6

Conclusions7

References8

Introduction

The research paper compares the current economic situation in the US with respect to the economic situation five years ago, the employment opportunities in the US and ways to encourage people to invest more money. The paper also states the issue of monopoly and the reasons a monopoly may or may not be efficient in the market.

Discussion

Economic Situation in US as Compared to Five Years Ago

United States economy is considered as the world's largest national economy and it maintains a high level of output. Five years ago it was a bubble burst. Four years ago, the US economy was going through an economic recession that hit globally, as well. It was due to the recession that currently there are 6.6 million lesser jobs in the US. The salaries and wages are falling continuously and the real income of an American is just below the level as compared to the real income five years ago. The inflation rate has also increased from 2.1 in 2006 to 2.93 in 201. However, the US inflation rates for the twelve months ending in February 2012 was 2.87% which is 0.05% lower than the inflation rate for twelve months ending in January 2012. However, the merchandise exports of US have increased to a record during the last five years. The long-term interest rates have also decreased as compared to the five years. Hence, it can be said that the US economy has come out of the recession and is growing at a slower rate.

Strategies to Create Employment Opportunities

According to US Bureau of labor statistics, the unemployment rate has decreased down to 8.1% in April 2012. However, the government must keep in mind that still there is unemployment in the country and it has to take several strategic measures to encourage people to spend more to create opportunities for employment in the country. The two possible strategic ways that the federal government could think of implementing could be:

Increase Unemployment Benefits

Since, Congress has already extended the unemployment benefits; I believe that there is some need of more extension. The extension should cover more and more people who have lost their jobs and are only stuck with traditional benefits as this would increase consumer spending and if consumer spending increases, there is a chance of job growths, majorly in retail, transport, wholesaling industries.

Increase incentives for small businesses

Small businesses are considered as the major source for reducing unemployment in any country (Sullivan, Arthur; Sheffrin, ...