The Current Economic Situation Marked by High Unemployment and Low Essay

The Current Economic Situation Marked by High Unemployment and let out Inflation - Essay ExampleThis essay not only describes current economic plaza 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 low inflation can ideally be explained with the help of the Philips Curve. As per A W Philips, there existed a relationship between the levels of unemployment and consequently the rate of change in money wages and the rate of change in prices and hence inflation. To flummox 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 whatever 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 Market, Pro duct 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 pct and an inflation rate of 10 percent will not warrant such measures. In such scenario that was discussed, the pragmatic approach on the part of the organization will be to pursue a restrained fiscal and monetary policy to contract the supply of money in the markets. In conclusion, it is stated that in the current scenario showing high unemployment and low inflation, it is advisable that the government pursues an expansionary fiscal and monetary policy.