The U.S. Economic Outlook Forecast
In order to forecast the economic outlook of the United States a few factors must be examined. The history and the changes in the GDP, savings, investment, real interest rates, and unemployment rates must be analyzed. Also, the monetary policy and its influence on the long-run behavior of price levels, inflation rates, costs must be examined. Trade deficits and surpluses must also be considered when forecasting the economic outlook of the US.
When it come to the economic forecast in the US history, we are starting to get to a stable incline that will continue with the GDP in the next few years. Let’s look back at the past couple years of the US GDP growth rate. In 2014, we went from a -1.2-growth rate to …show more content…
One being expansionary, which consists of the actions of a central bank, currency board or other regulatory committee that determine the size and rate of growth of the money supply. This in turn affects interest rates. So basically, a bank or government could cut interest rates. When there are lower interest rates there will be B more people buying instead of saving. This will also increase demand. Then there is the Contractionary Monetary Policy, which leads to a decrease to money supply in the economy. With less money supply this means there will be less spending more people holding onto money, less demand on products, and higher unemployment …show more content…
The market for loanable funds consists of borrowers and lenders. The importance of the loanable funds is the determinate of the final interest rate. The loans are more in demand when the interest rates are lower. When the interest rate is high the demands are a lot lower. The market for loanable funds directly reflects the financial system and how it is viewed. People who save are more likely to invest their money into loanable funds when the interest rate is lower. On the other hand if the economy runs a trade deficit then there must be a financing on the purchase of goods. This leads to the foreign-currency exchange. This is done by selling assets abroad. Which means foreign capital is coming to the country. People begin to exchange their money for US dollars. If there is excess foreign exchange for goods then the extra funds are used to purchase goods from
In order to forecast the economic outlook of the United States a few factors must be examined. The history and the changes in the GDP, savings, investment, real interest rates, and unemployment rates must be analyzed. Also, the monetary policy and its influence on the long-run behavior of price levels, inflation rates, costs must be examined. Trade deficits and surpluses must also be considered when forecasting the economic outlook of the US.
When it come to the economic forecast in the US history, we are starting to get to a stable incline that will continue with the GDP in the next few years. Let’s look back at the past couple years of the US GDP growth rate. In 2014, we went from a -1.2-growth rate to …show more content…
One being expansionary, which consists of the actions of a central bank, currency board or other regulatory committee that determine the size and rate of growth of the money supply. This in turn affects interest rates. So basically, a bank or government could cut interest rates. When there are lower interest rates there will be B more people buying instead of saving. This will also increase demand. Then there is the Contractionary Monetary Policy, which leads to a decrease to money supply in the economy. With less money supply this means there will be less spending more people holding onto money, less demand on products, and higher unemployment …show more content…
The market for loanable funds consists of borrowers and lenders. The importance of the loanable funds is the determinate of the final interest rate. The loans are more in demand when the interest rates are lower. When the interest rate is high the demands are a lot lower. The market for loanable funds directly reflects the financial system and how it is viewed. People who save are more likely to invest their money into loanable funds when the interest rate is lower. On the other hand if the economy runs a trade deficit then there must be a financing on the purchase of goods. This leads to the foreign-currency exchange. This is done by selling assets abroad. Which means foreign capital is coming to the country. People begin to exchange their money for US dollars. If there is excess foreign exchange for goods then the extra funds are used to purchase goods from