Business US has faced acute economic crisis since 2008. Present economic crisis started from the downfall of housing sector which lead to the financial crisis such as bankruptcy of Lehman Brothers (at that time fourth largest investment bank in the U.S.A.) and bankruptcy of largest insurance in world, the AIG (which were later saved by introducing bailout packages by U.S. government) which further collapsed production and unemployment plummeted. It is usually termed that it is the worst economic crisis since the Great Depression. (Moseley, 2009)

Even though Fed Reserve claims, the crisis has averted to some extent but the problems of unemployment, recession and inflation still prevails in U.S. economy.

According to U.S. Bureau of Labor Statistics, the unemployment rate staggers to an amount of 8.3% in February 2012. Similarly, U.S. Bureau of Labor Statistics also shows that consumer price index is on upward swing in 2012. Recent wave of agitation under the banner of "Occupy Wall Street" is also embodiment of high unemployment rate prevailing in U.S. economy.

Bernake (Chairman Federal Reserve) says, the U.S. job market remains weak despite recent three months strong hiring. Moreover, he says that further job gains require more policies that are robust. (Economic Crisis, 2012)

Marxist Theory can explain position of U.S. market; it says the significant decline in the rate of profit is the main cause of the twin evils of higher unemployment and higher inflation and hence, lower real wages experienced...

As in the past periods of depression, the decline in the rate of profit reduced business investment, which in turn resulted in slower growth and higher rates of unemployment.
Moreover, international rating agencies like Standard and Poor's have downgraded U.S. credit rating in 2011, which has sent shivers among the international investors, reduces investment from all across the world.

American government has responded to this economic crisis through bailout packages and through fiscal and monetary policy tools. However, so far it looks that bailout packages were only beneficial to prevent the economic crumble down but it has not been able to restore the growth rate. In 2009, President Obama told the Bankers, "I am the only one who is standing between you and the pitchforks, the bankers got the bailouts, they were supposed to extend credit, extend mortgages .They did pretty much nothing and they went back to same actions as before, making money through trading. At this point, I think people are fed up with it. Rightly or wrongly, there is huge amount of anger." (News Sources, 2011)

Fed's FOMC (Federal open market committee) has primary responsibility for conducting monetary policy in USA. Federal Reserve responded aggressively to the economic crisis. From September 2007 to 2008, the Federal Reserve lowered its short-term interest rate target, known as Federal Reserve funds from 5% to effectively zero. Later on to support economic activity, FOMC tries to longer-term interest rates…