What do current economic data tell us about the health of the economy? Assess th

Question

What do current economic data tell us about the health of the economy? Assess the current health of the U.S. economy by evaluating the key economic indicators that we have looked at in this course. How close is the overall economy to potential GDP and the natural rate of unemployment? The relevant economics statistics include the growth rate of real GDP, the unemployment rate, and the inflation rate at a minimum. You are encouraged to discuss and evaluate other economic indicators that could add to a more complete picture of the current state of the economy.

Since the trough of the last recession in 2009 the United States has experienced one of the longest business cycle expansions on record although until recently the upswing has been characterized by relatively low rates of economic growth. Outline and explain two macroeconomic issues/challenges facing the United States that could possibly move the economy away from full-employment GDP and create a recessionary gap? You may want to consider the challenges posed by the growing budget and trade deficits that are discussed in your text. Utilize the GDP equation (GDP=C+I+G+X-M) as the framework for crafting your answer.

Globalization has pulled hundreds of millions of people out of poverty in China and India and other countries in Asia. Global equality appears to be increasing through the principle of “comparative advantage” as discussed in Chapters 10 and 20. How should the convergence of global incomes be weighed against the structural changes that globalization has required in the United States and other developed economies? Should the Trump administration abandon plans to renegotiate or cancel the North American Free Trade Agreement (NAFTA) and other trade deals given the potential negative effects on incomes in other countries? Why or why not? Should workers who lose their jobs due to foreign imports be compensated for their lost incomes? Explain your reasoning utilizing the concepts introduced in Chapters 10, 20, and 21 of your digital text.

The Council of Economic Advisers requests that you carefully describe and explain at least two long run macro policy options that the President can consider to boost productivity growth and potential GDP. Discuss which perspective was more useful in developing your two policy options: the Keynesian Perspective or the Neoclassical Perspective? Utilize the AD/AS framework in framing your answer.

Explanation / Answer

Answer: current data shows that economy is not economically wellbeing currently.

Other than real GDP, unemployment rate, Inflation indicators which describes the economic health of the economy is trade surplus, the balance of payment, exchange rate, interest rates, index of economic wellbeing etc.

If the economy is having trade surplus means the country is exporting more and importing less, then the country is able to get more foreign reserves which are good for its economic health.

The balance of payment if the country is receiving more foreign currency not only from trade but from interest rates and other means compared to what it is paying out then it is considered to be economically healthy.

Interest rates in the economy also determine the health of the economy. Interest rates manipulate the investment in the economy hence it is one of the crucial indicators of economic health

Index of economic well-being is good indicators of the economic health of a country. High index means a country has a good economic wellbeing and vice versa.

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