金融Assignment代写_宏观经济代写_经济essay代写

Mixed Signals on the U.S. Economy
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 金融Assignment代写 Amid the 2008 financial crisis and its effects that lasted for more than three years, many organizations in many..

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Mixed Signals on the U.S. Economy
Stocks and the Financial Turmoil
Amid the 2008 financial crisis and its effects that lasted for more than three years, many organizations in many industries were hard hit. The crisis was heavily felt by the financial and credit markets such as banks, which led to a sharp decline in the stocks owned by several companies. Schwartz (2009) opines that after the bursting of the mortgage bubble in the U.S.,

the meltdown began to impact homeowners and the entire real estate market. 金融Assignment代写

Even though the mess was visible, financial markets continued higher with “Dow Jones Industrial Average (DJIA) reaching 14,164 on October 9, 2007; the crisis finally caught up, and by December of 2007, the U.S. had fallen into a recession (Schwartz, 2009).” In July 2008, the DJIA would trade below 11,000 for the first time,

which was not the end of the decline. The government initiated a bailout program with investors sending the Dow up “456 points to an intraday high of 11,483, in the end closing up 361 at 11,388 (Schwert, 2011).” However, the Dow fell “3,600 points from September 2008 intraday high of 11,483 to October 2008 intraday low of 7,882” (Schwert, 2011). 金融Assignment代写

Stimulus Package 金融Assignment代写

The monetary policy used by the federal reserve can be a means of bettering a recession in any country. With household consumption increasing at a lower rate in the U.S., it indicates that the household had lower confidence levels in their incomes and employment prospects. Wessel (2010) presents that the U.S. economic recovery was threatened by the confluence of tax increases and reduced household spending.

However, with monetary policies executed by the federal reserve, 金融Assignment代写

for instance, the tax rebate or refunds, will lead to an increase in the cash flow in the U.S. economy, thus, giving the households more money to spend. The $152 billion economic stimulus package is tailored to boost expenditure in the households so that the economy can recover. This federal reserve approach is called the expansionary monetary policy,

where the money is channeled into the economy to trigger households to spend more and boost their confidence in employment and income.

Reduced Interest Rates 金融Assignment代写

As a monetary strategy used to beat a recession, the federal reserve is expected to reduce its interest rates on credit services so that households can comfortably access them (Williams, 2012). Reduced interest rates will encourage households to acquire loans, which will increase consumer spending, increase investments, and create more jobs in the end. 金融Assignment代写

With all these in place, an economy is set to recover from a recession because there will be an increased demand for goods and services, which leads to increased production (and increased production needs more labor, thus, more employment and income).