Aggregate Demand and Supply Models
Individual expenditures have helped with productivity during this current state of the economy and it has pushed it ahead. And the contribution from domestic expenditure is improving. As a team we will describe and critique the current state of the economy by identifying the existing effect of the economic factors or aggregate demand and supply. And identify fiscal policies that are currently being recommended by government leadership. We will also describe the current state of: unemployment, expectations, consumer income, and interest rates. As well as evaluate the effectiveness of those fiscal policy recommendations from the Keynesian and classical model perspectives.
Supply and demand is the staple of employment and unemployment, when the economy is not growing the jobs are not there to supply the needs (C.C. 2012). With the unemployment rate still high people struggle to hold on to a job that they may not want, but know that during the last 5 years employers are not hiring like in years past. For people who are constantly looking for employment but have not found one they are classified as unemployed. Even though there are millions of unemployed in the United States, there are million that have also given up on looking for employment do to the frustration in the lack of jobs, unemployment pays more than working or if a person take the job they will lose their government sponsored insurance.
Greenspan made the statement that there is the possibility that an aggregate "target" consumer balance sheet position depends on factor like consumers' uncertainty about the future, and in particular on their perceptions about the risk of future unemployment spells.
Another determination is confidence in the economy. When consumers fear their money is not worth the paper it is written on or cannot buy as much as before. Consumers will stop buying and investing in futures, or stock,...