Question

Based on the recent U.S. economic performance write a 2-paragraph which gives an overview of the economy and 2. your recommendations for what government policymakers should do. Incorporate some of the statistics to support your paragraph .

Answer 1

President Trump claimed that the US economy would grow by 3% in the financial year ending in 2018. However, GDP just missed the number and ended at 2.9% by the year-end. This happened even after government announcing $1.5 Trillion tax cuts and increment in government spending. However, the growth was best since 2015 and improved its performance from 2017, which was 2.2%. The number were picked up by strong performance in fourth quarter due to robust spending in consumer & business segments. Inflation was also flat in the last quarter.

The policymakers in order to curb the unemployment and spur growth needs to generate demand, which would ultimately to lead to increase in spending. Government could do it either by monetary policy i.e. by increasing the money in circulation through lowering of interest rates. Alternatively, by fiscal policy i.e. by increasing the government spending through public sector.