Macroeconomics 2

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Macroeconomics 2

Category: Research Paper

Subcategory: Economics

Level: High School

Pages: 4

Words: 1100

Question 1
Full employment refers to an economic state whereby all available labor resources and personnel are being used in the most efficient manner possible. It involves maximization of both skilled and unskilled labor present in an economy at any given time CITATION Chr161 l 1033 (Matthews).
As of January 2016, the U.S economy had added fewer jobs than the analysts predicted. The Labor Department estimated that wages had grown by almost 3% in the past two months. Some analysts say that the U.S economy has reached a point where the unemployment rate at which the labor market is no longer showing any symptoms of weakness, but stable enough that pressures of wages do not necessarily lead to inflation; and the unemployment rate fell to 4.9%, the first time since February 2008.

Question 2:
The U.S economy, via its main depositories, is able promote substantial growth by stabilizing the prices of all goods and services produced. Price constancy or stability is said to be a reducing yet firm inflation rate checked at a given time. Ideally, inflation rate should be zero for the most stable prices. This means that people will invest with confidence rather than use resources to brace themselves against inflation, thereby, improving the economy. The reverse is true.
Since the late 20th century, United States has felt some level of instability in both growths of production value and inflation; variables that affect price stability. As of the beginning of the 21st cen…

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