Q1. What were the three signs that the U.S economy continued to improve at the beginning of 2016?
Ans: The three signs that showed that U.S economy improved is the consumer spending which grew from 1.8 % to 1.9 % from the previous year. The inflation rate increased by 0.7% from the year 2015 and the GDP growth rate increased from 2 % in the first quarter to third quarter(“U.S. Economy Staring 2016 on Solid Footing”,2016).
Q2. How does the current state of the U.S economy compare to macroeconomic conditions in Japan and Europe?
Ans: The U.S economy was more stabilized than the economies of Japan and Europe as the monetary policies adopted by the Federal Reserve by pushing the dollar against the Euro and Yen made dollar stronger than the other currencies. However, the policy makers f the countries like Japan and Europe decreased the interest rate to negative to fight inflation(“U.S. Economy Staring 2016 on Solid Footing”,2016).
Q3. At how fast a rate did the U.S economy grow in the fourth quarter of 2015, according to the latest revision?
Ans: The growth rate of U.S economy according to the latest revision shows that it increased by 0.4 percent more than the last quarter where the real GDP increased to 2.0 percent in the fourth quarter of 2015(“U.S. Economy Staring 2016 on Solid Footing”,2016).
Q4. Which components of GDP helped lift economic growth?
Ans: Increase in consumer spending that means that the consumer confidence toward the market was much higher which enabled the increase in GDP. The rise in inflation rate and the decrease in the unemployment rate also helped to increase the growth rate of the economy(“U.S. Economy Staring 2016 on Solid Footing”,2016).
Q5. Which components held growth back?
Ans: The components that held the growth was the trade and business investment which was affected by the global slowdown of the world economies and dragged the growth rate. This was due to the disinvestment in the energy sector and the negative gain from the net exports.
Q6. Are these trends expected to continue in 2016?
Ans: The growth rate which was stabilized in the fourth quarter of the U. S economy but due to lowering of oil prices pushed the energy companies thereby increasing the inventory which may be bad for the start of the 2016("Strong consumption to lift US growth above potential", 2016).
Q7. Discuss two recent developments in the U.S economy in the first quarter of 2016. Cite the source of your article.
Ans: Strong consumption in the first quarter of 2016. Private consumption have grow at a rate of 3.3 percent. Wage growth has also increased and employment has also increased and unemployment rate has fallen to 5.0 percent. The strong recovery of the labor market is a sign of development in hues economy. The investment in the real estate sector also grew at a moderate rate("Strong consumption to lift US growth above potential", 2016).
Works Cited
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Torry, Harriet. “U.S. Economy Staring 2016 on Solid Footing.” The Wall Street Journal Version (2016). 4th February http://www.wsj.com/articles/u-s-growth-revised-higher-in-fourth-quarter-1456493673?mod=djem_jiewr_EM_domainid
"Strong consumption to lift US growth above potential". The Peninsula: Qatar Daily Newspaper (2016). 7th February www.thepenisulaqatar.com/business/qatar-business/369348/strong-consumpotion-to-lift-US-growth-above-potential
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