Macroeconomics Assignment Essay Example for Free

Macroeconomics Assignment EssayCurrent economic conditions in the U. S an all around the world are rising to alarming situations, with the dilemma being commonality that whether its inflation or recession, which is hampering the prudence badly. The fluidness issues are affecting the U. S economy badly, the money leave is shrinking although the Federal Reserve is pursuing an accommodative monetary policy, but due to its lesser lock and the dynamism of the U. S economy, this policy seems to have a very low effect on the liquidity situation in the overall economy. After a rise in the money supply for hardly a(prenominal) months the money supply has been contracting since then, the M2 component of the money supply, which consists of cash, consumer deposits and checking has been shrinking. While M3 which consists of the above, plus the large clock deposits and former(a) items is also changing its direction towards a lower end. The figure depicts the trends of the money supply a nd how it has dipped gradually. intent 1 annual U. S. Money Supply GrowthSource Shadow Government Statistics, 2009 This condition privy result into the weakening of economic activity and pulling out money from stocks. Recently the downfall in the consumer expense and the lowering of the stock prices is the sign of scorched liquidity in the economy (Kellner, 2003). In this authoritative situation of economic dilemma, the current economic conditions demands active measures from the new president and the U. S congress to crucify the hazards taked by the weakening economy.Government should discountvas to push more liquidity into the market the FED should try to increase the money supply through lowering the interest rate, pushing more money into the economy by funding the companies and the corporations that can create more stability in the economy. The government should try to create more jobs into the economy by pushing their spending this will surely create more consumers spen ding and thus providing a ground to combat recession in the economy. These economic measures are the need of the time and they will certainly have their effects on the economy.Thus, by acting proactively on these strategies the government can easily face all the difficult circumstances. References Kellner, I. (2003, November). Where has all the money gone?Retrieved Feburary 10, 2009, from Market Watch http//www. marketwatch. com/ discussion/Story/Story. aspx? guid=%7BF1B1B20B-EBDE-435F-8349-A19E26DBB945%7Dsiteid=mktwdist=nwhpm Figures Figure 1 Annual U. S. Money Supply Growth Shadow Government Statistics. (2009). Annual U. S. Money Supply Growth. Retrieved Feburary 10, 2009 from http//www. shadowstats. com/charts_republishm3