AggregateDemand and Supply
Theamount of final goods and services that are ordered in the entireeconomy, at any given, time can be referred to as the aggregatedemand. The merchandise is stipulated at different prices, andseveral consumers are considered including the households,governments, and firms among others. On the other hand, aggregatesupply is defined as the total goods and services that the existingindustries in the national economy of any state can sell at thespecified period. The firms should be able and willing to deliver asper the demands of people at the current prices in that financialsystem.
FromTable 1.1.6, the GDP has been increasing since 2014 to the presentyear. In particular, the levels of consumption, government spending,and investment have been rising during this time. The net exportsseem to decrease from one period to the other except on a fewoccasions. For instance, in 2014, it increased during the second andthird quarter. The same was depicted when 2015 ended and during thefirst and second quarters of 2016.
InTable 1.1.7, an analysis is done concerning the changes that occurredin the particular components of GDP when the prices are considered.In general, Y seems to fluctuate in percentage increases, rangingfrom 0.5 to 2.3, except in the first quarter of 2015 where it reducedby 0.1. The same trend is seen in C, where the least change was -1.6at the start of 2015 and most was at the beginning of 2014 and thesecond quarter of 2016 that recorded +2.0 each. The “I” recordedfavorable alterations throughout the period except on the first andsecond quarter of 2015 where they were negative. Lastly, G adjustedpositively except at the end of 2014 where it remained constant.Similarly, it recorded the uncertain change in the first quarter of2015 and 2016 (BEA, 2016).
Fromthe summary reports provided in the month of January 2016, all thetwelve districts show an expansion in their economic activities apartfrom some of them, which include New Yolk and Kansa City. Accordingto the information provided on March, the economy continued to dowell especially in San Francisco and Richmond where there was amoderate escalation. Boston recorded the highest revenues in theprevious year nevertheless, afterwards, the results were notconstant. Homogenous results were shown according to the April surveyconcerning all the twelve Federal Reserve Districts though the ratevaries across them. Consumer spending continued to intensify, and thehousehold expected that the trend would go on for an indefinite time.According to the May review, the economic growth was modest in mostof them compared to the Beige Book Report of the previous month. Frommid-May to the end of June, there was an expansion in the businesscycle in all the Federal Reserve according to the descriptionprovided in July and September where the outcomes were almostindistinguishable from the previous ones though with slight changes(Federal Reserve Government, 2016).
Fromthe account given concerning the twelve Districts, the economicperformance has been thriving from one month to the other atdifferent grades. Dissimilar sectors of the economy are showingsignificant improvement every time, and this is a clear indicationthat the same outcomes are expected in the months and years ahead.The business cycle is explained better by use of the recession orexpansion terms. From the research by Beige, it can be summarizedthat the pattern in the United States in the periods to follow isexpansion.
BEA.(2016). NationalData,Retrieved fromhttp://www.bea.gov/iTable/iTable.cfm?ReqID=9&step=1#reqid=9&step=3&isuri=1&903=6on September 26, 2016.
FederalReserve Government. (2016). Beige Book. of Commentary on Current Economic Conditions by Federal ReserveDistrict,Retrieved fromhttp://www.federalreserve.gov/monetarypolicy/beigebook/default.htmon September 26, 2016.