University of Phoenix
January 21, 2013
Currently, our country is in a recession, and the unemployment rate is at an all-time high. The unemployment rate consists of people not only out of work but also those who can work and are actively looking for work (Colander, 2010). Unemployment also means there are more people out of work than there are jobs available
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The incomes of consumers are basic on the economy, when the unemployment rates are high more consumer get into debt. Consumers out of work are less likely to buy a home. Unemployment makes it hard to buy things that people need in everyday life, such as gas for cars and food to eat. When the government pays out high unemployment benefits the consumer level of income decreases. As the government reviews the income of the consumer, it looks at spending, saving, and debt the consumer has. In developing an understanding of the consumer income one must look at the spending habit, and what he or she can afford. Inflation is what decides how much money a consumer spends on goods and services, the debt can show if a consumer is spending or saving.
Interest rates and movements affect everything economically and everyone’s lives to a certain degree at different levels. To some individuals interest rates can affect them in a profitable manner or it can be devastating to others. When the U.S. economy downturn began, the unemployment rate, food prices, foreclosures, bankruptcies, the federal debt increased, and outrageous fuel prices demanded an economic reaction through monetary and fiscal policy.
A close analysis takes into consideration the studying of economic factors, and the impact on aggregate supply and demand. During this study, the unemployment rate was shifting