Introduction and Unemployment
ECO/372
August 28, 2013
Introduction and Unemployment
In order to best describe and critique the United States economy, it is best that we take a look at the economic factors that affect the economy. When looking at the economy, we must look at unemployment, expectations, consumer income and interest rates. These various factors also have an effect on aggregate demand and supply. Government leaders are recommending different fiscal policies in order to deal with the economy. It is also important to evaluate the effectiveness of these fiscal policy recommendations from the Keynesian and Classical model perspectives. Each of these factors and policies affect the United States economy.
Colander (2010) stated “the unemployment rate is the percentage of people in the economy who are willing and able to work but who are not working.” In order to discuss unemployment is it important to look at the Bureau of Labor Statistics to get the most current numbers of unemployment. According to the BLS, both the number of nonfarm unemployed people as well as the national unemployment rate declined for the month of July. “The unemployment rate has fallen from more than 10% in October 2009 to 7.4% in July 2013, the labor market remains a brutal place for the 4.2 million long-term unemployed, whom the Labor Department defines as workers who have been out of work for six months or more” (Matthews, 2013, para. 1). Many people are still struggling to find work due to many organizations are not paying what they used to prior to the recession or people have been out of work for too long and organizations do not feel they are useful. The unemployment will hopefully continue to decline through the rest of 2013 and into 2014 due to the simple fact that organizations are beginning to earn solid profits now, interest rates are declining and people want to get back to work. There are always expectations that affect the economy as well.
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