Primary Concerns of Macroeconomic Analysis - 722 Words

Macroeconomic Analysis Discuss the three primary concerns in macroeconomics analysis Three primary concerns about the US economy include the massive amounts of stimulus, the large number of unemployed from the last recession and the stock market rising to all time highs. These areas are interconnected with each other. As each one plays an important role in determining the underlying amounts of economic strength and the potential of the US seeing a longer term recovery. In the case of the stimulus, a total of $13 billion dollars was spent supporting consumer spending and encouraging growth through different federal projects. This was accomplished by offering consumers with a $787 million tax refund and encouraging programs to shore demand in select areas (such as: Cash for Clunkers). At the same time, the Federal Reserve has engaged in a program to keep borrowing costs artificially low. This was achieved at first through purchasing mortgage backed securities. (Amadeo, 2013) (Fed Sticks with Stimulus Plan, 2013) However, the challenges impacting spending on the federal level meant that there has been across the board budget cuts for many agencies. This has resulted in the Federal Reserve directly buying even more mortgage backed securities and government bonds. Moreover, they have reduced the Federal Funds rate to historic lows. These actions are designed to ensure that consumers, home buyers and businesses can receive additional loans. 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