Question

Since 2011 the US economy has been in the expansion phase of the business cycle, but annual GDP growth has averaged well below the US 3-5% norm. Some economists contend that this slow growth is the product of poor monetary policy. Do you agree? If yes, explain what the Fed has done wrong since 2011. If no, explain what the Fed has done right since 2011 and why the economy has been growing so slowly.

Answer 1

Since 2011 the economy of United States has been growing slowly and the main reason for the slow growth is due to the low trend in corporate spending in the current years which is below the business incomes. Also the mainproblem plaguing the economy is productivity, as it's growing at a slower pace than it used to, and thus holds down wages and dampens the economic growth. Moreover in the years prior to 2011, the US commercial expenditure was more than the business incomes and the economy was growing at a rapid rate. The businesses in the United States have held a lot of dollars that can be utilised in better approach such as innovations that can make people extra creative and earn more revenue; and thus can plays a significant role in the economic expansion