Analysis of Recent Microeconomics Events in the United States Term Paper

Analysis of Recent Microeconomics Events in the United States - Term Paper ExampleThis paper outlines the magnitude of the influence of microeconomic trends on the overall state of American economy. Issues under consideration of micro economists interpolate from what factors impact the savings of consumers to how much firms should produce under the given circumstances.It is known that microeconomic decisions taken by individuals and organizations are influenced by considerations of cost and benefit. Costs relate to financial cost pertaining to cost of finance, such as total variable cost, opportunity cost and fixed cost. Interest place have always been an forefinger of a rudes economic status. Increase in the interest rates indicates a design of things such as the economys ability to absorb high interest rates, meaning that change magnitude interest rates imply that the central bank assumes that different entities in the country forget continue borrowing at higher interest r ates, meaning that productivity will increase and the economy will grow. Increasing interest rates also tend to reduce inflation. Interest rates in the US have continued to remain around zero, which indicates that the economy is facing difficulties in enhancing production. It is believed that change magnitude interest rates at this time will create economic complexities for the country. Consumer confidence in America is presently rattling low, which is evident from the large numbers of homes that continue to remain on sale. The country needs to focus to a greater extent strongly on issues such as consumer prices, housing market, debt subvert and interest rates. The countrys debt load continues to be massive and is growing steadily, which has depressed the economic environment and minimized growth. Whatever growth that happens is subdivision by the increasing debt, while low interest rates prevent the economy from affecting a recovery in the short run. Low interest does increase borrowings for businesses and individuals but the default rate in the US is very high almost twenty percent. Consumers are reluctant to buy new homes and select to wait and watch as they are not currently prepared to take more loans during multiplication of uncertainty, primarily because assets have the tendency to decline in value in the short term. In run its own debt, the US relies heavily upon foreign money by offering its assets such as organisation bonds to other nations. However, Americas credibility in this regard is gradually declining in view of its increasing debt. Countries such as China have begun to question the ability of the US to repay its debts. The US appears to be losing its status of a world super power because many countries have started looking elsewhere for investing. The craft situation in the US continues to deteriorate and the numbers of good jobs are consistently decreasing. The numbers of American citizens living in poverty are also increasing. Over the last few years, millions of job opportunities, thousands of businesses, and billions of dollars of the country