Solution to Spain’s Unemployment

As seen in an article on MarketWatch.com, Spain has seen a big rise in unemployment. This has a lot to do with the global recession and is not helping Spain at all. Unemployment could greatly postpone Spain’s recovery from the recession and could do some serious economic damage.

A solution for Spain is to raise aggregate demand. Aggregate demand is the total demand for final goods and services in the economy. As you can see in the graphs below, courtesy of tutor2u.net, if the government can somehow raise the aggregate demand, then we will see a consequent raise in aggregate supply. This means a greater need for output and companies will undoubtedly need more workers. That is why you can also see in the graph that demand for labour will increase.

Growin’ in the USA

The US’s GDP growth rate has been very low since the recession. An article posted on MarketWatch.com stated that the GPD growth rate “has failed to surge into to 7% to 10% range as typically happens after a deep recession.” GDP, a summation of consumption, investment, government spending, and exports minus imports, has seen recent growth due to a rise in the consumption aspect of GDP. Economists have seen a 3.2% increase and hope to see even bigger growth in the near future.