Ever since the terrorist attacks on America a weak economy has seemed to fall apart. People have been reluctant to travel which is hurting the airline and hotel services, and have been saving more in case of their own sudden lay-off. Before the terrorist attacks ever happened there was an economic slow down. This slow down was mainly because of a misjudgment by merchants who over stocked their inventories, which hampered production and people had to be laid off. I believe that within the next couple of months, and with the support an aggressive government policy, the economy will turn around for the better.
             Unemployment in the United States is at its lowest point in nearly five years. The jobless rate is up to 5.4% at the end of October according to www.dismal.com. The recent terrorist attacks against the U.S. prompted many of these layoffs. The attacks are not the only thing to blame though, since for the fifth month in a row aggregate weekly hours declined. The chart above (www.economicharts.com) shows how drastic the decrease in jobs has been over the past couple of months. The drastic decrease in jobs was far worse then even the most pessimistic forecasts. The worst losses were suffered from the manufacturing and services industries. "The data is weak everywhere one looks, even in sectors that one would have expected to hold up, one being construction," said economist Alan Ruskin of 4CAST Ltd. in New York. " We are seeing extreme weakness in the service-producing sector, suggesting a marked broadening of the slowdown." According to dismal.com "there are now well over 7 million unemployed people in the U. S. Of these, 3.2 million have been unemployed for 5 weeks or less."
             Schiller defines inflation as, "an increase in the average level of prices of goods and services". Because of the build up of inventories by businesses there is either no or little inflation. As one can...