1. Running head: UNEMPLOYMENT WHAT IS AN ACCEPTABLE RATE? 1
Unemployment, what is an Acceptable Rate?
Stephanie D. Walker
sdw19641118@comcast.net
Content
Introduction………………………………………………………………………….2
The Unemployment Crisis ………….……………………………………………2 - 3
Unemployment Table ……………………………………………………………….2
The Recommendations……………….………………….…………………………..3
Conclusion……………………………………………………………………….......3
References……………………………………………………………………….......4

2. UNEMPLOYMENT WHAT IS AN ACCEPTABLE RATE? 2
Introduction
Bungee jumping is a deliberate act of dangerous magnitude that adventurous people engage
in for an all-consuming adrenaline rush. Economics, a social science that seeks to define how
people will act, is the study of how people choose to allocate their scarce resources. And,
unemployment is a non-deliberate situation that United States (U.S.) citizens are currently
facing. In 1993 Former President, Bill Clinton stated that he did not believe that the U.S. could
mend the fundamental fabric of society until everyone willing to work had work (Clinton, 1993).
The Unemployment Crisis
In a statement released following the Federal Open Market Committee (FOMC) meeting on
August 9, 2011 the U.S. was advised of slow economic growth, weak labor market conditions, an
improvement in household spending, and moderate inflation. Most significantly, the Federal
Reserve (Fed) reported that the unemployment rate remains high. Figure 1.1 reflects
unemployment percentages for the previous six quarters.
8.2
8.4
8.6
8.8
9
9.2
9.4
9.6
9.8
10
Apr-10
May-10
Jun-10
Jul-10
Aug-10
Sep-10
Oct-10
Nov-10
Dec-10
Jan-11
Feb-11
Mar-11
Apr-11
May-11
Jun-11
Jul-11
Aug-11
Sep-11
P
e
r
c
e
n
t
a
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Month
Figure 1.1
Seasonally Adjusted Unemployment Rate
Previous Six Periods
Seasonally
Adjusted
Unemployme…

3. UNEMPLOYMENT WHAT IS AN ACCEPTABLE RATE? 3
Additionally, the FOMC reported an increase in the expectancy of recovery in the upcoming
quarters. Moreover, the committee predicts a slight decline in the rate of unemployment;
movement toward levels consistent with their dual mandate (2011).
The Recommendations
All things considered, given the range of policy tools available that promote a stronger
economy the U.S. must indeed practice reasonable and rational restraint. Hence, my position is
that a combination of easy money policy, expansionary fiscal policy, and fiscal policy would be
most appropriate at this time. Easy money policy offers speed, flexibility, and isolation from
political pressure while expansionary fiscal policy helps reduce the unemployment rate. Fiscal
policy involves (1) active programs designed to influence the economy and (2) automatic
programs that respond to economic changes without orders from political officials. The
automatic programs or built-in stabilizers reduce the multiplier effects of spending and offset
undesirable changes in gross domestic product (GDP) (McConnell, Brue, Flynn, 2012).
Conclusion
By law the Fed is responsible for pursuing both low inflation and low unemployment, yet in recent
years they each have experienced fluctuations; neither a success nor a failure. Considering the latitude
the Fed is granted we must remain optimistic that their future decisions are more deliberate than not.
There is no doubt that there will be conflicting arguments in favor of one fiscal or monetary policy over
another, but whenever choice exists cautiousness instead of enthusiasm should be the fiscal motto of the
United States.

4. UNEMPLOYMENT WHAT IS AN ACCEPTABLE RATE? 4
References
(2011, September 22). Text of the Fed's Statement On Monetary Policy Moves. New York Times.
p. 4. Retrieved from EBSCOhost..
EMPLOYMENT, UNEMPLOYMENT, AND WAGES. (2011). Economic Indicators, 116(7),
11-16. Retrieved from EBSCOhost.
McConnell, C., Brue, S., Flynn, S. (2012). Economics: Principals, problems and policies (19th
ed.)., New York, NY: McGraw-Hill.