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The Economy, Monetary Policy, and Monopolies, Research Paper Example

Pages: 1

Words: 944

Research Paper

Economic status in US

As opposed to five years ago, where US was regarded as a country with stable economic arena, the fact remains that the country has experienced an exceptionally sluggish growth in the economy since 2011. Factors like unemployment and inflation rate are the core causes of the drastic drop in the US economy. Further research has it that, recovery on this may even be slower than expected.

On the contrary, according to comparison of economic strategy five years ago, most of the citizens were not employed and the rate of inflation was very low. However, the country was in the midst of a stable economy. Despite the fact that, five years ago US had a stable economy, rather, predicted that the country will witness oil crisis, political turmoil, deep recessions and runaway inflation. Essentially, this is what has critically affected the fall of economy in the current US.

Inflation rate

This entails the US’s sustained increase in level of goods, services and prices in general review (Louis & Sulliva, 2010, p.187). It is measured in percentage increase annually. According to the analysis made, it is evident that the inflation rate has increased from 1.991 % in previous years to 2.162%. Here, is a correct analysis of the same:

US inflation rate previously 1.991 %, -0.039% each moth that is moth after moth and currently 2.162 %.this is analyzed as follows:

Inflation rate

Unemployment rate

Over the five years, there has been a record of joblessness among the citizen of the US. Thus, this gives breakdown on how the US economy is worsening. The graph below analyses the trend of the joblessness among the current US residents.

Unemployment rate

It is noteworthy that if a country is continuously losing its economic stability, then there is a need for urgent reconstruction (Brune, 2011.p 450). Notably, the federal government should put strategies in place to cub this situation. For instance, some of the strategies should be as follows, technological translation as well as middle class persons being in the front line for working in assemblies. Here, this will enhance the foundation in formation of the global leadership in the US economic arena.

In the past years, monopoly rampant, thus, the government resolved to use antitrust policies to stop these worrying circumstances. Some of these monopoly circumstances were the giant cooperation, civil war, and the cartels as well. Besides, the wrong-minded entrepreneurs who did not only crush their competitors, but also monopolized their markets, lead the business. Moreover, the same entrepreneurs went on to gouge their customers. In this regard, the government had to step in since there was the need to put to an end to this monopolistic situation. Following this, situation had created an environment that did hinder the government from intervening in the affairs of private organizations. Therefore, formation of the antitrust policy, paved way for head-on intervention of the government into private firms.

In my own prediction, if the monopolistic situation could continue without the government intervention, then economy of the US could worsen. It is worth to note that, this could be made possible since the entire government was about to be under the control of private firms. In addition, the government could not what so ever, have the mandate to receive its revenues.

It is vital to note that, among the best and convenient ways of stabilizing economy is to offer customers a first-hand for discounts awards. Therefore, entrepreneurs should put into consideration a reliable method for the above to come true. Some of the methods are consumer sales promotion, which will involve sampling, and couponing just to mention but a few (Schmitz, 2008, p. 125). In addition, trade sales promotion is one of the methods that the government will use to offer discounts to customers without many discriminations.

Monopoly may either be helpful in the economy or be of no help under the following conditions. First, the state should establish the competition requirement, hence eradicate the barriers to exit or enter. Second, pricing predatory should come in existence; this involves setting prices at low levels to cause pressure to potential rivals. Third, firms should set price below the average cost a process called limit pricing. In the event, if new entrants decide to meet the price, then they will automatically make loss.

In conclusion, from the above, it is evident that the country’s economy may go low without the prior knowledge of the concerned citizens. However, the above analysis emphasizes the fact that US economy is growing worse each year despite the efforts made to stabilize it (Louis & Sulliva, 2010, p.207). The government of any given country has the mandate to control the pricing of any commodity in its country. Even though the US has tried its best in regulating its economy, the stabilization of its economy in the near future is not guaranteed. This calls for proper and well-arranged strategy that will enact change. However, some of the area where the government should put into consideration is the eradication of the joblessness among its citizens. Automatically, the above goes hand in hand with proper and favorable policies on the ground.

References

Brune, L. (2011).Chronological history of U. S. foreign relations. New York, NY: Routledge.

Louis, W & Sulliva D. (2010). Smoking & Health in the Americas: A 1992 Report of the Surgeon General in Collaboration With the Pan American Health Organization. New York, NY: DIANE Publishing Company.

Schmitz, A. (2008) . The Economics of Alternative Energy Sources and Globalization. London: Bentham Science Publishers.

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