The recent slowdown (2008) in the North American macroeconomic environment also follows the same trends as its predecessors. Typically an economic slowdown is defined as an economy which has :
• Declining aggregate demand
• Contracting employment/rising unemployment
• Sharp fall in business confidence & profits including a reduction in investment spending
• Reduced inventory levels and heavy discounting,
• Falling demand for imports
• Increased government borrowing
• Lower central banks interest rates.
Specifically, the North American economy has been plagued by the War in Iraq, rising energy prices, the U.S. housing meltdown, the large U.S. budget deficit, inflation, unemployment and the devaluation of the U.S. dollar versus international currencies. Each of these factors has negatively affected Canadian and American GDP during 2008. Below is a detailed description of the impact that each factor has had on Aggregate demand and GDP leading to and during 2008. .
The U.S. invaded Iraq in 2003, since that time the U.S. government expenditures have skyrocketed. Recent estimate peg the U.S. government expenditures at an all inclusive rate of $7.1 Billion / month. Considering the war began in 2003 the total U.S. government expenditures to date total an astonishing $390 Billion. Including the multiplier effect the impact of the U.S. war on Iraq helped fuel the U.S. economy and it’s GDP since the early 2000’s. 
Rising energy prices have been impacted by a variety of issues ranging from an increase in global demand for energy, to the War in Iraq (including heighted international tensions) to commodities speculators driving up the price of non-renewable energy reserves. The boom from 2003 – 2008 had both breadth and depth, virtually expanding every economy in the world during that period; especially in developing nations such as China and India. The increase in energy demand these countries... [continues]
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