Question

Think about current economic conditions in The United States? What is driving the economy in its current expansion or contraction phase? What is helping to maintain economic growth, demand, supply, and/or inflation rates within their current ranges? What may trigger the end of a particular trend? Please use specific local examples where possible, and reflect on how national trends may relate to your local economic conditions as well.

Answer 1

There are four phases of economy 1. Expansion 2. Peak 3. Contraction 4.Trough. In expansion, grows healthy 2 to 3% and stock enters into bull market, in peak when economy grows more than 3%, In contraction economy grows slow but not the negative growth whereas in Trough, there is a situation of recession. The current US economy condition is the expansion, since there was a recession in 2008 (Trough). Expansion phase lasts for 5 years so there is a alarming sign of recession in US econpomy. The problem of asset bubbling was there in 2008 and now also. Due to expansion economy there is a decrease in unemployment. In expansion, the small cap rises fastest initially. The extra income can be earned with high-yield bonds. The foreign stocks are also developed. The emerging foreign markets are risky to invest but as the global economy is rising these risks can be taken by someone.