The American Economy

How Much Do You Really Know About It?

Recession or Inflation?

The U.S economy is slowly coming out of a minor recession. There is proof of this due to lowering gas price and a stronger U.S dollar. Although there are weaknesses such as a slowdown in exports, modest consumer spending, and sluggish overall economic expansion, the U.S is slowly showing improvements.



To promote stability in the economy, the U.S Government is going to lower taxes, and raise spending and borrowing considering the U.S is still technically coming out of a recession. The intended economic outcome of this will be to have fairly consistent output growth, the government spending and government deficits automatically increase during economic downturns due to more demands on social-safety-net provisions and falling tax revenues. Such spending can have a stabilizing effect on the economy because it happens automatically rather than through legislative acts, and the money is spent at times it is needed most.


To promote stability in the economy the FED wants to increase aggregate demand by putting money in the economy. Federal Funds Rate increase, Discount Rate decrease, and Reserve Requirements decrease and the FED wants to buy bonds. This will allow for the economy to maintain a stable and growing economy through price stability and full employment, its two legislated mandates.