Macro Economics News Paper Cutting The economy of United s has hit a snag according to the report released on September 2011. The rate of unemployment stands at about 9.1 percent. The increase in the rate of unemployment is devouring the economy since many opportunities could not be created to cater for the increasing rate of unemployment. The rate of unemployment indicates that the economy does not grow. A growth in the economy would create employment of opportunities. The rate at which the US economy was growing shows that it cannot absorb many people in the job market.
The state of the economy would influence the number of people employed. Inflation refers to the constant increase of prices of the common goods in the market. The economic recession that crippled the US economy led to increase in prices of goods and services. Prices of items increased lowering the value of US currency. When a currency loses it value, it cannot buy the same amount of goods it bought before. It will force people to pump in more money for the same commodity that was bought at a cheap price before.
Inflation affects the growth of the economy since it hampers investments. A few investors would be willing to venture into investment since the return on investment would be unprofitable. Business ventures look at the returns that they get in their business. Low returns is a characteristic of a business that has no market grip. Inflation affects the market exchange. Since the market is in disequilibrium, the prices of goods affect business across the globe. People tend to avoid bulk buying thereby affecting the rate of exchange of goods and services.
The demand and supply of products in the United States market reflects the economy problems that the country is currently facing. Many people complain because of the high prices of the products in the market. When prices are high, a few people will be willing to buy commodities this will affect the supply of products into the market. High demand of goods and services is a result of steady source of income (Mises 111). People will tend to buy common products such as food and clothing.
In some instances, many people would avoid going for products, which will involves extra cost. Inflation has created unemployment because many businesses are closing down. Many people would lose their employment because the rate of job creation has decreased. When a business or a corporation decides to close down its business, its employees will be laid off increasing the number of people who are unemployed. Stagnation in growth of the United States economy has stagnated voluntary exchange. Voluntary exchange is a situation where a person is willing to exchange his product for a given amount of money or service.
The economic status of the United States indicates that many firms have narrowed their exchange ability because of the fear they have in incurring loses that results from inflation. On the other hand, buyers are unwilling to buy because they do not have the ability to buy. My conclusion to the economic status of United States of America is that the rate of unemployment in the country has increased because of the inability of firms to create employment opportunity to the citizens.
The inability of these firms is due to inflation that has rocked the economy. Creating employment for the unemployed would mean that a move has been created to heal the economy. Controlling the inflation rate would restore the investment in the United States thereby creating more opportunity for employment. Work cited Mises, Von, Ludwig. The Theory of Money and Credit. Auburn: Ludwig von Mises Institute. 2009. 110-115. Print.