The Economy, Monetary Policies, and Monopolies

The Economy, Monetary Policies, and Monopolies Name Institution Professor Course Date The Economy, Monetary Policies, and Monopolies The US economy is one among the most technologically advanced countries in the world. The economic situation, however, has not always been a stable one. Interest rates have hit unstable levels at one time, and the federal government budget balance has weakened. Consumer spending has continued to be constricted with the fear of increasing unemployment continuing to depress consumer sentiments. Unemployment levels have gone high relative to the last five years. However, unemployment rates are low compared to the last two years, which is a sign of improvement in the economy`s unemployment status. Unemployment acts as an indicator of how other sectors of the economy are performing. The increasing inflation rate has continued to squeeze the disposable income of US citizens, affecting most the lower income level group. A squeeze in the real value of income reduces the consumption rates especially of non-essential commodities and subsequent investments in these sectors. Changes in the interest rates have both positive and negative implications on the US economy. Interest rates have been low for the last few years which has been good news to mortgage applicants but unfavorable to savers. To stimulate economic growth, the federal government is aiming at keeping the rate at which banks lend money among themselves at as low as 0.25% CITATION Ron13 \l 1033 (Ronald D Lankford, 2013). To stimulate spending in the economy, encourage savings, investments and creation of employment, the government can implement several strategies. Two of such strategies include ensuring an accountable and safe transportation system and improving programs that waste on taxpayer`s money and encourage costly development programs. The transportation system should be fiscally accountable and most of al...