The Economy, Monetary Policy, and Monopolies

Title: THE ECONOMY, MONETARY POLICY, AND MONOPOLIES

Name: Jackie Harris

Professor: Horvath

Course: ECO 100 (Principles of Economics)

Date: 12/02/2012

Analyze the current economic situation in the U.S. as compared to five (5) years ago. Include interest rates, inflation, and unemployment in your analysis.

“The United States economy is the largest national economy in the world; it is a market orient economy with a GDP (purchasing power parity) of 15.08 trillion dollars in 2011.” (www.cia.gov/worldfactbook). The economy of the United States is continually growing, at present it has a “GDP growth rate of 1.8%.”(www.cia.gov/worldfactbook). Though, the economy is still in recovery from the recession, in my opinion, it is doing far better now than it was in 2007 and 2008 because of the recession. “Currently the unemployment rate in the U.S is estimated to be 9%.”(www.cia.gov/worldfactbook). Which is still high when compared to previous years, but that is due to the current economic situation in the country. However, according to the National Bureau of Economic Research website, the recession began in December 2007, and was spurred by “sharp downturns in U.S. stock, housing and labor markets” (http://www.nber.org). As a result of the economic recession in America, there were not only ramifications for the United States economy, but for the people as well, and ultimately the global economy. The recession led to staggering home foreclosures, high rates of unemployment, increases in inflation, decreased consumer confidence, contraction of the economy and much more. Interest rates played a role in the economic recession; for instance, it was due to low interest rates offered by banks, that many people decided to take advantage and buy houses they could not afford, leading them to foreclosure and banks earning substantial loses and ultimately trickling down contributing to the...