Macroeconomic Situation Essay Example | Topics and Well Written Essays - 500 words - 4

Macroeconomic lieu - Essay Examplemake up for lowering tax revenues, US local giving medication pink-slipped various gainers and educators and payrolls were lowered which hampered consumer spending (Homan, 2010). Moreover, the set of dollar is declining against many other currencies and it is expected that Fed go away pursue a new round of large-scale asset procure. Felsenthal and Costa (2010) argues that decline in the value of Dollar is the result of Feds easy money policy because investors moved out of dollars and invested in other currencies to achieve higher returns. They also highlighted that Federal Open Market Committee (2010) has decided to apply its own policy tools because FOMC seems to have an explicit easing bias. The inflation expectations in US are increase and investors are showing their concerns that Federal Reserves efforts to revive the thrift will further compel up the inflation and it is expected that Fed is going to use tools like quantitative easing (Mackenzie, 2010). actual nations usually use advanced tools of monetary policy like quantitative easing which is an asset purchase program (Rashid, 2010). Therefore, if expansionary policy is pursed then it is expected that tax cut would increase the household consumer spending and government spending would stimulate the economy by improving the demand and supply sides, thereby, helping the US economy to spur its recovery.In order to recover from recession, U.S. Congress has two fiscal policy tools including tax policy and government spending. Carreira (2010) argues that debates in Washington on fiscal policy have been always over the rumple of government spending and tax cuts. He argues that US Congress should adopt the Keynes model and to stimulate the US economy, government spending should increase and taxes should be cut. Treasury Secretary, Geithners recommendation to US Congress to embrace expiring tax cuts for the middle class (Smith, 2010) is another good recommendation. Actually by bringing back Americans to work will