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Aggregate Demand and Supply Paper
Aggregate Demand and Supply Models Economic Critique Ken Drake,
ECO 372 Macroeconomics
September 10, 2012
Jason Foster

Aggregate Demand and Supply Models Economic Critique In the United States the economy is currently in a recession, although signs are indicating that the economy is slowly recovering. In an effort to analyze the Unites States economy the unemployment rate, expectations, consumer income, and interest rates have been evaluated. The results of these evaluations are included in this report. Unemployment in the United States fell to 8.1% from 8.3% in July. U.S. employers are said to have added 96,000 jobs in July (KSL News, Sept) . According to reports from the department of workforce services the decrease in the unemployment rate was not because of new jobs but rather from people not looking for work. In order for a person to be counted as part of the unemployment rate they must actively be seeking work. The unemployment rate does not give an accurate rate of all people out of work. Interest rates in the United States vary depending on what is being assessed. Home mortgage rates are as low as 2.26% in some areas. The Federal Reserve stated in August that they were going to further steps to stimulate growth if the job market does not show sustained improvement (U.S. Federal Reserves leaves monetary policy unchanged, August). Interest rates are defined as "the prices that are charged or paid for the use of financial asset." Many people refer to credit as "other people's money" this usually involves borrowing money from the bank or from family members for a reasonable set interest rate. The interest can be paid along with the monthly payment or be paid al at once at the beginning or end of the loan. The Federal Reserve sets the national interest rate and thereby guides the country through inflation and then recession, adjusting the rate to try and control either phase. This fluctuation also controls how people buy and build.


References: Aggregate demand and aggregate supply. (2012). Aggregate Demand and Aggregate Supply. Retrieved from http://highered.mcgraw-hill.com/sites/dl/free/0070969531/817998/McConnell_Macro12ce_Ch10.pdf Colander, D. C. (2010). Macroeconomics (8th ed.). Boston, MA: McGraw-Hill/Irwin. Franco Modigliani. (November 2007). New World Encyclopedia. Retrieved from http://www.newworldencyclopedia.org/entry/Franco_Modigliani Investopedia. (2012). World Financial Watch.com. Retrieved from http://www.investopedia.com/exam-guide/cfa-level-1/macroeconomics/aggregate-supply-demand.asp#axzz25ptSCggd KSL News. (Sept. 7, 2012). US economy adds 96K jobs, rate falls to 8.1%. Retrieved from http://www.ksl.com/index.php?sid=21719317&nid=481 U.S. Federal Reserves leaves monetary policy unchanged. (August 2012). Trading economics. Retrieved from http://www.tradingeconomics.com/united-states/interest-rate
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