What is the "current Macroeconomic situation" in the U.S. (e.g. is the U.S. economy currently concerned about unemployment, inflation, recession, etc.)? What fiscal policies and monetary policies would be appropriate at this time?

In each economy, the policy creators play a vital role in controlling macroeconomic activities with a main target of maintaining stability. Basing on U.S Macroeconomic condition presently is disturbing to many. From information being reported in the news, papers and even websites, the US economy is greatly concerned with unemployment which is as a consequence of the present recession. The media predicts and reports unemployment as a decade depression. In July 2013, the US the unemployment rate decreased from 7.60 to 7.40 percent as was reported by the Bureau of Labor Statistics which was lesser than the past usual rate. In relation to this, there is a call for U.S adopting proper policies in order to reduce unemployment back to the manageable levels (Acocella et al, 2014).

Gomis-Porqueras et al (2012) explains that unemployment will rise further, but not be greater than 10 percent due to the fact that there is no lack of liquidity in the system. And this comes at the cost of inflationary pressures that indicate that it is likely to modify monetary and fiscal policies. Normally a country when in expansion should pay attention on inflation as the combined demand is increasing that may cause the rise in price levels. In such a state, fixed monetary and fiscal policies are called for to play a key role in financial stability

From the United States Trading Economics, the GDP (Gross Domestic Product) expanded by 1.70 percent in the second quarter of 2014 over the preceding quarter.

The growth rate of Gross Domestic Product in the US usually is reported by the Bureau of Economic Analysis. Its GDP rate of growth is averaged 3.24 percent from the year 1947 till 2014.The US has one of the mainly diversified and most technologically sophisticated economies in the globe. Healthcare, real estate, finance, insurance, rental, professional, education services and leasing in the US account for above 40 percent of GDP (Acocella et al, 2014). The Federal Reserve plays a major role in fighting recession. It is worth noting that U.S economy has not yet fully improved from the 2008 recession. In order to improve from recession, the Federal must boost the money flow by participating in open market as well as reducing the reserve requirement proportion (Acocella et al, 2014).

.           In conclusion, the monetary and fiscal policies that are suitable at a given time depend on the macroeconomics condition a country is at that moment as different macroeconomic conditions, calls for diverse policies. For the US, the best policies will be somewhat expansionary ones that are intended to allow the economy to develop a bit faster than it is. This policy is applied when a country is in recession. It endorses the financial strategy that is intended to boost the money supply. But in fiscal policy more money is put into hands of the consumers, enabling total demand to increase. Therefore, the government has to peruse policies that are intended to expand the economy smoothly. In other words, if the government buys government securities, it has to buy reasonable quantity even if it increases the spending. But the US economy is not on a recession so the government of US should not take hard line actions and abstain from steps that will cool the economy down (Gomis-Porqueras et al, 2012).

References

Acocella, N., Di Bartolomeo, G., & Tirelli, P. (2014). U.S. TREND INFLATION REINTERPRETED: THE ROLE OF FISCAL POLICIES AND TIME-VARYING NOMINAL RIGIDITIES. Macroecon. Dynam., 1-15. Doi: 10.1017/s1365100513000837

Gomis-Porqueras, P., Julien, B., & Wang, C. (2012). OPTIMAL MONETARY AND FISCAL POLICIES IN A SEARCH-THEORETIC MODEL OF MONEY AND UNEMPLOYMENT. Macroecon. Dynam., 17(06), 1330-1354. doi:10.1017/s1365100512000016