Macroeconomics Assignment Essay

Current monetary conditions in the U. S an overall the world are ascending to disturbing circumstances, with the predicament being basic that whether its expansion or downturn, which is hampering the economy severely. The liquidity issues are influencing the U. S economy severely, the cash flexibly is contracting in spite of the fact that the Federal Reserve is seeking after an accommodative money related strategy, yet because of its lesser control and the dynamism of the U. S economy, this strategy appears to have a low impact on the liquidity circumstance in the general economy. After an ascent in the cash flexibly for barely any months the cash gracefully has been contracting from that point forward, the M2 part of the cash flexibly, which comprises of money, customer stores and checking has been contracting. While M3 which comprises of the abovementioned, in addition to the enormous time stores and different things is likewise altering its course towards a lower end. The figure portrays the patterns of the cash gracefully and how it has plunged bit by bit. Figure 1: Annual U. S. Cash Supply Growth Source: Shadow Government Statistics, 2009 This condition can result into the debilitating of financial action and pulling out cash from stocks. As of late the ruin in the buyer spending and the bringing down of the stock costs is the indication of seared liquidity in the economy (Kellner, 2003). In this present circumstance of monetary quandary, the current financial conditions requests dynamic measures from the new president and the U. S congress to beat the perils made by the debilitating economy. Government should attempt to drive greater liquidity into the market; the FED should attempt to build the cash flexibly through bringing down the loan fee, driving more cash into the economy by subsidizing the organizations and the companies that can make greater steadiness in the economy. The administration should attempt to make more occupations into the economy by pushing their spending this will unquestionably make more customers spending and subsequently giving a ground to battle downturn in the economy. These monetary measures are the need of the time and they will positively have their impacts on the economy. Hence, by acting proactively on these procedures the legislature can without much of a stretch face all the troublesome conditions. References Kellner, I. (2003, November). Where has all the cash gone? Recovered Feburary 10, 2009, from Market Watch : http://www. marketwatch. com/News/Story/Story. aspx? guid=%7BF1B1B20B-EBDE-435F-8349-A19E26DBB945%7D&siteid=mktw&dist=nwhpm Figures Figure 1: Annual U. S. Cash Supply Growth Shadow Government Statistics. (2009). Yearly U. S. Cash Supply Growth. Recovered Feburary 10, 2009 from http://www. shadowstats. com/charts_republish#m3