Economis

Economics
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Economics
Question 1
Employment Rate
In America, the unemployment rate is a measure of the number of people actively engaged in searching for a job expressed as a percentage of the labor force. Five years ago, the unemployment rate was very high, and it had hit the 10% mark. However, as the years passed, the unemployment rate kept falling, to currently below the 6% mark. In the current year, the unemployment rate has declined significantly, from 5.9% in the month of September to 5.8% in the month of October. According to the U.S Bureau of Labor Statistics, the unemployment rate has fallen from 2009-20014, and in 2014, it managed to remain below the 5.8% mark (Trading Economics, 2014).
Inflation Rate
Inflation is central to the consumer price index, which includes prices for food, energy and various services. Five years ago, the inflation rate had dropped to -2%, but in the successive year, the inflation rate kept increasing. The rate was higher in the year 2012, than the year 2009, but dropped significantly in the year 2014. However, compared to the year 2009, the year 2014 has recorded high rates of inflation.
Interest Rate
Data from the Federal Reserve provide rather interesting results. Over the five-year period, it appears that, interest rates in America remained constant. From the year 2009-2014, the interest rates had hit the 0.25% mark. The government has consistently cut the interest rates in an attempt to restore the economy. For example, the beginning of 2008, the interest rate was 3.5%, but at the end of the same year, the government had cut the interest rates to 1%. Currently, the interest rates are 0.25%, which shows a decreasing trend (Trading Economics, 2014).
Question 2
Changes in Employment Rate
Compared to five years ago, the unemployment rate has drastically decreased. One reason for this observation is the high numbers of jobs created by employers. Some of the industries that created jobs include the food services, retail trade and healthcare. Another important aspect to consider is the outsourcing of employees from foreign countries to take advantage of low wages. As such, companies are now seeking locally available employees. With the rise in technology, employers went for automated labor; however, employers have started recognizing the essence of human labor.
Changes in Inflation Rate
High inflation rates are mainly caused by increased demands for goods by the Americans, whereby the demand is high, but the goods or services are scarce. There are few goods in the market, which have made the price increase. On the other hand, another probable cause of high inflation rates is the decrease in the value of the nominal unit of the American currency. This happens, mainly when government is printing money, which results to the depreciation of the American currency (Econom...