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level of unemployment has increased at very high rate in comparison to the employment rate
Running Head: MACROECONOMICS
Macroeconomics
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According to Censky (2011), the level of unemployment has increased at very high rate in comparison to the employment rate. This has occurred in contrast to the expectations that job creation would occur. The unemployment rate has resulted due to the occurrence of a recession in the economy. The nation is under an economic recession; therefore, job creation is quite a difficult task at the present time. Economic recession has resulted due to the government excessive expenditure on response to several emerging disasters. The disasters include occurrence of unpredicted floods, and the occurrence of tsunami. In addition, the stalemate in Washington and the increasing gas prices have a role to play in the emergence of economic recession, and have created a tremendous uncertainty among the businesses.
The economic recession has created uncertainty among the potential business employers. The employers have great fears of dynamics of the existing federal tax policy and spending cuts. This has occurred since the congress has not yet attained a consensus on debt ceiling and effective measures of cutting down the nation’s deficit. The fear of the existing dynamics on the economy has led to small business employers developing a habit of observing what happens to large businesses in terms of job creation.
Politics have significant influence in the development of an effective-economic status of a nation. The nation has experienced political games that have resulted in a decline on the wage level for employees effectively. Politicians have engaged in a blame game of who has responsibility of decline in wage level, in the nation. In addition, the politicians have minimized the chances of job seekers participating effectively on job recovery. The reduction on employment levels formed the basis of political rhetoric that emerged from two sides of the nation’s politics. For example, the republican claim that the nation has inherent regulations and the stimulus-spending binge is not effective; therefore, job creation has a limitation. In addition, the republican add that the existing national debt forms challenge that the private sector has to face in order to create jobs. The government, on the other hand, claim that the public understands that there is a limitation on the available jobs. In addition, the government promises to implement reform patent laws after the congress passes the bill in order to create jobs.
Macroeconomics makes an analysis of the behavior, performance and decision-making of the nation’s economy. Unemployment rate is one of the factors that macroeconomics takes into consideration for the analysis of the entire economy. Censky (2011) article depicts a correlation of unemployment and employment rates in which the two factors have a negative correlation. This correlation results from the fact that the economy is in a recession due to the uncertainty created by several factors; such as, tsunami, stalemate in Washington, higher gas prices and floods. The uncertainty has led to employers developing a reluctant attitude towards employment. As such, the employment rate has reduced drastically for the whole nation.
Politics inherent in a given nation determines the strength of the economy. The government acts as the governing organ for formulating an effective macroeconomic policy. These policies include monetary and fiscal policies. As the government engages extensively on politics, the economy becomes a victim of subjection into a recession. However, the government may avoid such circumstances through concentrating on analyzing, as well as formulating an effective measure to adopt in order to safeguard the nation’s economy.
Reference
Censky, A. (2011). June Jobs Report: Hiring Slows, Unemployment Rises. CNNMoney.
Retrieved from: http://money.cnn.com/2011/07/08/news/economy/june_jobs_report_unemployment/index.htm?iid=HP_LN&iid=EAL
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