Answer to Question #287867 in Macroeconomics for Komal

Question

Current macro economic indicators of the country chosen, current or past economic crisis (hyperinflation, massive unemployment, currency depreciation etc) or a positive economic event( rapid GDP growth). Discuss how the country overcame the crisis

Answer 1

In 2008 and 2009, many countries across the globe were negatively impacted by the global financial crisis that started in the United States. In 2008 and 2009, the United States experienced a negative growth rate in GDP of -0.29% and -2.78% respectively.

To overcome this crisis, the government of the United States employed both expansionary monetary and fiscal policies. The expansionary monetary policy involved an increase in money supply while expansionary fiscal policy involved an increase in government spending and a reduction in taxation. These policies spurred consumption and investment and thus helped this country to overcome the economic downturn.