Principles of Economics

1. Analyze the current economic situation in the U.S. as compared to five (5) years ago. Include interest rates, inflation, and unemployment in your analysis.

The news informs everyone on a daily basis that the United States has the largest economy and that it is looking to be in great shape since four years ago. To some Americans it seems otherwise. The unemployment rate in 2007 was 4.6% compared to unemployment rate in 2012 at 7.5%. The U.S inflation rate ended in October 2012 after twelve months was 2.16% which is 0.11% higher than the one in September. The U.S inflation forecast consists of apparel, education and communication, energy, food and beverages, housing, medical care, recreation, and transportation. The U.S Government's inflation economics policy tries to control inflation. High inflation and negative inflation (deflation) can have damaging effects on the economy.

2. Propose two (2) strategies that the federal government could implement that would encourage people to spend more money in order to create employment opportunities.

Two strategies that the federal government could implement that would encourage people to spend more money in order to create employment opportunities is to give free college training to low income and unemployed. This would allow them to get paid for going to school or training. It would also provide an automatic job after training. By providing the free college training to low income and the unemployed would not stop consumer spending and would encourage people to continue to spend money.

3. Identify a situation in the past 50 years in which the government used antitrust policies to stop a monopoly from occurring. Include the circumstances of the proposed monopoly and the reason the government stepped in. Predict what would have occurred had the monopoly succeeded.

A trust is an arrangement under which the owners of several companies transfer their decision-making powers to a small group of trustees. The purpose of the antitrust policy is to promote competition among firms. This leads to lower prices for consumers. A situation in the past in which the government used antitrust policies to stop monopoly from occurring was the American Telephone and Telegraph (AT & T) that was broken up into seven regional phone companies. The government stepped in because of the long eight gear battle. AT & T agrees formed seven operating companies. The new AT & T was faced with new competition from MCL, Sprint, Mitel, and Northern Telecom. If the government did not stepped in the other companies that AT & T were facing competition would have not have the chance to compete in the market for long distance service. This allowed other firms to share the market.

4. Propose two (2) methods of identifying groups of customers who should receive a discount for a product or service without alienating

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