The Current Economic Situation Marked by High Unemployment and Low Essay

The Current Economic Situation Marked by High Unemployment and Low Inflation - search ExampleThis essay not further describes current economic situation in the United States that was explored as an example. The current economic situation in the United States of America marred by high unemployment and let loose inflation can ideally be explained with the help of the Philips Curve. As per A W Philips, there existed a relationship surrounded by the levels of unemployment and consequently the tell of kind in money wages and the rate of change in prices and hence inflation. To put it in simple words, as per the Philips Curve, historically speaking, their lies an inverse relationship between Demand Pull Inflation and the rate of unemployment. The researcher also provides the reader with some steps, that would not only increase the aggregate demand but would also check the expanding unemployment rate. The Salient Factors that have impacts on the US economy rates, such as The Labor Ma rket, Product Markets and Other Factor Markets are explored in details. The researcher od this essay also discusses and presents some alternate scenarios that say an unemployment rate of 8.8 percent and an inflation rate of 10 percent will not warrant such measures. In such scenario that was discussed, the pragmatic glide path on the part of the government will be to pursue a restrained fiscal and pecuniary policy to contract the supply of money in the markets. In conclusion, it is stated that in the current scenario covering high unemployment and low inflation, it is advisable that the government pursues an expansionary fiscal and monetary policy.