Macroeconomics Assignment Essay

Current monetary conditions in the U. S an inside and out the world are ascending to disturbing circumstances, with the issue being regular that whether its expansion or downturn, which is hampering the economy seriously. The liquidity issues are influencing the U. S economy gravely, the cash gracefully is contracting despite the fact that the Federal Reserve is seeking after an accommodative fiscal approach, yet because of its lesser control and the dynamism of the U. S economy, this arrangement appears to have an exceptionally low impact on the liquidity circumstance in the general economy. After an ascent in the cash gracefully for barely any months the cash flexibly has been contracting from that point forward, the M2 part of the cash flexibly, which comprises of money, purchaser stores and checking has been contracting. While M3 which comprises of the abovementioned, in addition to the huge time stores and different things is additionally altering its course towards a lower end. The figure portrays the patterns of the cash flexibly and how it has plunged steadily. Figure 1: Annual U. S. Cash Supply Growth Source: Shadow Government Statistics, 2009 This condition can result into the debilitating of financial action and pulling out cash from stocks. As of late the ruin in the customer spending and the bringing down of the stock costs is the indication of burned liquidity in the economy (Kellner, 2003). In this present circumstance of financial difficulty, the current monetary conditions requests dynamic measures from the new president and the U. S congress to conquer the risks made by the debilitating economy. Government should attempt to drive greater liquidity into the market; the FED should attempt to build the cash gracefully through bringing down the loan cost, driving more cash into the economy by subsidizing the organizations and the enterprises that can make greater dependability in the economy. The administration should attempt to make more occupations into the economy by pushing their spending this will most likely make more shoppers spending and along these lines giving a ground to battle downturn in the economy. These financial measures are the need of the time and they will surely have their impacts on the economy. Accordingly, by acting proactively on these procedures the administration can undoubtedly confront all the troublesome conditions. References Kellner, I. (2003, November). Where has all the cash gone? Recovered Feburary 10, 2009, from Market Watch : http://www. marketwatch. com/News/Story/Story. aspx? guid=%7BF1B1B20B-EBDE-435F-8349-A19E26DBB945%7D&siteid=mktw&dist=nwhpm Figures Figure 1: Annual U. S. Cash Supply Growth Shadow Government Statistics. (2009). Yearly U. S. Cash Supply Growth. Recovered Feburary 10, 2009 from http://www. shadowstats. com/charts_republish#m3