American economy over the last two years (2009-2010) Essay

American thrift over the last two years (2009-2010) - Essay ExampleThe loss of setors morale to invest and become active in the capital and financial markets has had a great disallow impact to on the overall American economy. The scotch crisis can be closely attributed to the decline in collective economic power of consumers, businesses, and investors. In the fiscal year of 2009 and 2010, several Americans lost their jobs, a phenomenon that negatively impacted on consumer and household spending, although Obamas job creation plan had reduced the rate of joblessness significantly through investment in new infrastructure. The politicss investment in infrastructure has however created a negative impact on the countries work out, as there is a possibility of the government incurring a budget deficit in the next years to recover the huge amount spent on infrastructure. The economy has taken a long time to recover due to reduced consumer and business spending and much particularly loss of investor confidence in the financial markets. However, real estates and undervalued stock during that period could offer the beaver investment opportunity as many investors have shifted focus from investing these industries. On the other hand, descend in consumer spending as result of bankruptcies of consumers may exert economic strain on discretionary spending sectors and retailers. This calls for socio economic approach to solve the vicious circle of economic decline of the American economy. The government introduced economic policies alongside Obamas fiscal stimulus package to stop the economic decline and relate its stability and development. However, the economic disruptions of 2009 and 2010 had varying effects on different sectors of the economy with the recession affecting peculiar(prenominal) industries. The financial, real estate and tourism industries were adversely affected while technological, export and alternative energy industries were not affected. Aggre gate Demand Aggregate demand is the measure of collective spending on goods and operate in a particular country. Outputs, employment levels, and general prices of goods and services are affected by variations in the countys aggregate demand. Aggregate demand consists collectively of consumers expenditure, capital investment, government spending, exports and imports of goods and services. Expenditure on consumer goods and services allow in durable and non-durable goods consumed and repurchased by the specific consumers. In aggregate demand, expenditure on consumer goods and services is the biggest component. peachy coronation comprises of the total spending on capital goods that are used and applied for production of more goods and services such as plant, equipment and buildings, which will allow us to produce more consumer goods in the future. Capital investment also comprises of expenditure on working capital, which includes both work in progress and stocks of finished goods. C apital investments have bigger percentage being spent by the private sector and a little percentage being spent by the government in undertaking such as braid of new schools and road networks. Capital investments, particularly in the private sector of the American economy declined in the fiscal year of 2009 and 2010 due to the world recession that had affected