United States Economy
By Fareed Siddiqui
Economic Growth
Current
In the first quarter of 2018 the GDP growth rate was 2.3%. This is equal to the growth during 2017 showing that this is a sustained number. The diagram to the right shows the effect of economic growth. Aggregate demand shifts because people have more disposable income and can consume more and Aggregate Supply shifts because the producers can produce more of the good at the same price. During the 2008 recession, the United States exoerienced negative econimov growth with it peaking in 2009 at -2.78%.
Government Policy
The GOP has decided on a new Tax Bill concerning 2018 federal income tax rates. The tax rate for most income brackets has decreased. This means that people will be taxed slightly less resulting in more disposable income. This is why it is an effective measure as with more disposable income, people will be more willing and able to buy goods thus increasing aggregate demand, this results in an increase in GDP as consumer spending is an important part of GDP.
