Question

Respond to the following prompt in a post with a minimum of 100 words, then comment on at least ONE other posts.

• While over the long run, the economy grows about 2 to 3% per year on average, over the shorter term, the economy goes through business cycles. Think about the growth rate of GDP, the inflation rate, and the unemployment rate over the last 12 quarters. Would you describe the economy as booming, recovering, or in recession during the last few years? Why?

Answer 1

Over the last few months, growth rate is close to 2 % and inflation is also around 2 % or Further, There is fall in unemployment rate. Current unemployment rate is 3.9 % which suggests that economy is operating at full employment. Economy is operating at the natural rate of unemployment. Natural rate of unemployment implies that economy is operating at full employment rate.

Above data suggests that economy is recovering or almost recovered. Economy suffered economic recession in 2008 when aggregate demand decreased and unemployment rate increased to 9 %. But after government bailout packages, economy recovered substantially.

To sum up, economy has recovered from economic bust.