The college graduates of 2000 could hardly have asked for better luck. The unemployment rate dropped to 4.1 % in May 2000- roughly, the lowest level in a generation- and employers were literally scrambling for new hires. Starting salaries rose, many graduating seniors had numerous job offers, and some firms even offered $10,000- $20,000 bonuses to students who signed the dotted line. Three years later, the job market for the Class of 2003 was rather different. U.S. economic  growth had slowed to a crawl, and then to a halt. Companies that had stocked up on recent  college grads in the tighter labour markets of 1998-2000 found themselves with more than they  knew what to do with in 2002 and 2003. They were not eager to hire more. Bonuses and other  “perks” disappeared; job offers became scarcer. With the unemployment rate around 6% in May  and June of 2003, the job market was far from the worst ever. But it was nothing like the glory  days of 2000.   Discussion: (i) Briefly explain and justify what prevailing situation was taking place in the year 2000. (ii) Identify and explain two fiscal policies and two monetary policies that the US government may have used based on the situation in the year 2000.  (iii) Use a diagram to illustrate the implemented measures for the year 2000.

ENGR.ECONOMIC ANALYSIS
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Author:NEWNAN
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The college graduates of 2000 could hardly have asked for better luck. The unemployment rate
dropped to 4.1 % in May 2000- roughly, the lowest level in a generation- and employers were
literally scrambling for new hires. Starting salaries rose, many graduating seniors had numerous
job offers, and some firms even offered $10,000- $20,000 bonuses to students who signed the
dotted line.

Three years later, the job market for the Class of 2003 was rather different. U.S. economic 
growth
had slowed to a crawl, and then to a halt. Companies that had stocked up on recent 
college grads in the tighter labour markets of 1998-2000 found themselves with more than they 
knew what to do with in 2002 and 2003. They were not eager to hire more. Bonuses and other 
“perks” disappeared; job offers became scarcer. With the unemployment rate around 6% in May 
and June of 2003, the job market was far from the worst ever. But it was nothing like the glory 
days of 2000.

 

Discussion:
(i) Briefly explain and justify what prevailing situation was taking place in the year 2000.
(ii) Identify and explain two fiscal policies and two monetary policies that the US
government may have used based on the situation in the year 2000. 
(iii) Use a diagram to illustrate the implemented measures for the year 2000.  

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