How the Unemployment Rate Affects a Countries Economy
This paper is about how the high unemployment rate has an affect on the economy. The high unemployment rate had an affect on the Gross Domestic Production as well how it had an affect on the economy as well. This paper covers when the Gross Domestic Production went up the unemployment rate had gone down as well. The high unemployment rate also had direct ties to the economy, because if people are not working they are not going to spend money on house hold goods which is what drives the economy.
How the Unemployment Rate Affects a Countries Economy …show more content…
With demand going down that going to mean that there might be a lot of supply which means that companies are going to have cut prices on their goods in order to get them out of their ware houses. One way that the government tried to promote people to buy houses was by giving them a tax incentive when they purchased their new home, but with the high unemployment rate foreclosures are still at a high with more than 2 million homes are still up for foreclosure this year (United States, August, 2009).
With the jobless rate still high that is also going to mean that the Federal Reserve should be able to keep interest rates at the about the zero level. The interest rate level has been near that level now since 2008. The problem with unemployment is how it is obviously inner-twined with each other. If the demands for goods are low unfortunately the jobless rate goes up as well. The other problem is that the Fed cannot lower interest rates any lower than they have been (Izzo, February, 2010).
One way to increase jobs in the will be if consumers keep spending money like they have this first quarter. By increasing spending companies will be able to increase supply for the demand. This will also help increase jobs. If this keeps on happening jobs will be able to recover slowly. Like I said earlier analyst are predicting that 100,000 jobs will be produced each month for the next couple of months. With, more jobs coming about each month that’s going to