Using the U.S as Country, answer the following questions in essay format. Add so

Question

Using the U.S as Country, answer the following questions in essay format. Add sources if research is performed.

What is the current state of the economy that you have chosen? Collect the latest available data on nominal GDP, real GDP, per capita real

GDP, unemployment rate, inflation rate, interest rates, exchange rate(s), and any other important macroeconomic data.

Is the country experiencing an inflationary gap or a recessionary gap?

What kind of macroeconomic policy should this country follow?

Is the real GDP growing and at what rate?

What is the per capita real GDP on Purchasing Power Parity basis? What is the trend in this variable? Is the per capita real GDP increasing? Can you find the relevant data for the last couple of years or more?

Is the current unemployment rate close to NAIRU? Higher or lower?

At what stage of the Business Cycle is this country presently in? Is there an inflationary or recessionary gap?

What kind of fiscal and monetary policies is this country presently following? Expansionary or contractionary?

What kind of exchange rate policy is this country presently following? Fixed exchange rate or flexible exchange rate?

How is this country’s economy going to perform in the coming years? What does the future look like? Will the unemployment rate and inflation rate change? Why or why not?

Explanation / Answer

US GDP is 18.558 trillion dollars

GDP percapita 53,041.98 USD

Unemployment rate : 5.5%

Inflation 0.2%

Interest rate: 0.5% Fed rate

GDP growth rate : 2.2%

1) US did not have considerable inflation in a very long period, So it can be said that there is no inflation there

2) The fed rate is already as 0.5% which is super low, So the country had run out of options to spur growth again. All the measures were already taken and nothing more can be done on policy front

3) Real GDP is growing at 2.2%- 0.2% so it can be said 2 % is growth of real gdp according to the stats provided above

4) Percapita GDP is also increasing in US, but at a very low pace, growth rate of 2.2% is not very high to increase incomes very fast.

5) Niru unemployment rate is around 5.5% which is closer to the current unemployment rate of 5.5%

6) The country right now is stuck in inflationary gap with super low inflation the economy cannot grow very fast and demand for money also is very low at fed rate of 0.5%

7) As most currencies are pegged to US dollar it is the global reserve currency, The country follows flexible exchange policy from a very long time

8) The prospects are very grim, To maintain current GDP figures would be difficult in future unless some miracle happen. US cannot maintain such high standard of living anymore. The coming generations have to pay higher intrest rates for generations.

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