Macroeconomics Assignment Essay

Current economical conditions in the U. S an all slightly the world are rising to alarming billets, with the dilemma being common land that whether its inflation or recession, which is hampering the economy badly. The liquidity issues are affecting the U. S economy badly, the silver make out is shrinking although the Federal Reserve is pursue an accommodative monetary policy, but due to its lesser control and the pizzazz of the U. S economy, this policy seems to have a very low solvent on the liquidity situation in the overall economy.After a rise in the silver supply for few months the property supply has been contracting since then, the M2 component of the money supply, which consists of cash, consumer deposits and checking has been shrinking. While M3 which consists of the above, plus the large beat deposits and other items is also changing its direction towards a lower end. The var. depicts the trends of the money supply and how it has dipped gradually. Figure 1 Annua l U. S. silver bring out GrowthSource Shadow Government Statistics, 2009 This condition nominate result into the weakening of economic activity and pulling out money from stocks. Recently the downfall in the consumer spend and the lowering of the stock prices is the bless of scorched liquidity in the economy (Kellner, 2003). In this current situation of economic dilemma, the current economic conditions demands active measures from the new president and the U. S congress to overcome the hazards created by the weakening economy.Government should try to excite more liquidity into the market the FED should try to increase the money supply through lowering the interest rate, pushing more money into the economy by funding the companies and the corporations that can create more stableness in the economy. The government should try to create more jobs into the economy by pushing their spending this will surely create more consumers spending and thus providing a ground to combat recessi on in the economy. These economic measures are the need of the time and they will certainly have their personal effects on the economy.Thus, by acting proactively on these strategies the government can advantageously face all the difficult circumstances. References Kellner, I. (2003, November). Where has all the money gone?Retrieved Feburary 10, 2009, from food 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. bills Supply Growth Shadow Government Statistics. (2009). Annual U. S. Money Supply Growth. Retrieved Feburary 10, 2009 from http//www. shadowstats. com/charts_republishm3