...GM 545: Business Economics Chapter 16, Question 5 Unemployment rates in the U.S. are classified under two types, the frictional and structural unemployment. Frictional unemployment depends on the level of demand while structural unemployment depends on the relationship between labor skills and industrial changes that are mostly related to technology (Gilpatrick 1966). Frictional unemployment will always be present in any economy, even a high performing one, and is also vital and beneficial to every economy. A recent study suggested that the industrial structure of cities plays an important role in determining the national rate of unemployment. The more industrially diversified the city is, the lower the rate of unemployment and the more evenly distributed employment is across industries (Simon 1988). Frictional unemployment occurs naturally and appears when an individual is between jobs. This is typically a temporary transition from one position to the next. These individuals may be classified as first time job seekers, recent college graduates, or career advancers looking to hold out for corporate climb. These individuals are frictionally unemployed because they are not taking other career opportunities and are holding out for a better position. When a person quits their job to relocate, they are also considered frictionally unemployed. Another example of frictional unemployment is when a company decides not to hire due to lack qualified applicants that would be able to...
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...Kelly L. Hester Business Economics GM545 January 2013 kellyl.hester@gmail.com Q1 – Everyone’s Gasoline Problem Gas prices fluctuate almost daily. Along with it are the pain and frustration of having to fill up my Jeep with gas weekly while hoping to get the lowest price in town. In my quest I have narrowed it down to the HESS station on one corner where there are two other competing gas stations in the city in which I live and the HESS station in the city where I work which are about 25 miles apart. While the demand for gasoline is inelastic, the elasticity for specific brands of gasoline is elastic. Brand preferences for homogenous commodities such as gasoline are weak (Stone, 115). If the QT Station offers a lower price than my preferred HESS station, I will definitely buy from the QT Station regardless of my preference. Competition among retail outlets thus affects pricing. More choices generally mean more competition for business. The marketplace forces of supply and demand determine the price of fuel. If demand grows or if a disruption in supply occurs, there will be upward pressure on prices. By the same token, if demand falls or there is an oversupply of product in the market, there will be downward pressure on prices (http://www.thepriceoffuel.com/whataffectsfuelpricing/). . Because of the disruption of supply during Hurricane Katrina, gas prices in my area of Charlotte, North Carolina rose to over $4.50 per gallon. As more and more...
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...Business Economics GM545 Summer B, 2010 Exercise 1: Everyone’s Gasoline Problem “In recent years, the world's appetite for gasoline and diesel fuel grew so quickly that suppliers of these fuels had a difficult time keeping up with demand. This demand growth is a key reason why prices of both crude oil and gasoline reached record levels in mid-2008. By the fall of 2008, crude oil prices began to fall due to the weakening economy and collapse of global petroleum demand, which had pushed oil prices to record levels earlier in the year. These factors helped gasoline prices drop below $2 per gallon of regular gasoline in late 2008 and early 2009, the lowest prices in three years (U.S. Energy Information Administration, 2010).” According to the U.S. Energy Information Administration (EIA), the single biggest factor in the cost of gasoline is the cost of crude oil. So what affects the cost of crude oil? As with most costs, the answer is supply and demand factors. “On the demand side of the equation, world economic growth is the biggest factor. One of the major factors on the supply side is the Organization of the Petroleum Exporting Countries (OPEC), which can sometimes exert significant influence on prices by setting an upper production limit on its members, which produce about 40% of the world’s crude oil. OPEC countries have essentially all of the world’s spare oil production capacity, and possess about two-thirds of the world’s estimated crude oil reserves. Oil prices...
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...Business Economics GM545 December 7, 2010 Exercise 1 Economists break unemployment down into three distinct varieties - Structural, Frictional, and Seasonal. Structural unemployment is unemployment that comes from there being an absence of demand for the workers that are available. The two major reasons that cause an absence of demand for workers in a particular industry are: 1) Changes in technology, as personal computers replaced typewriters, typewriter factories shut down. Workers in typewriter factories because unemployed and had to find other industries to be employed in; 2) Changes in tastes: If bagpipes become unpopular, bagpipe companies will go bankrupt and their workers will be unemployed. Policy suggestions to reduce structural unemployment include providing government training programs to the structurally unemployed, paying subsidies to firms that provide training to displaced workers, helping the structurally unemployed to relocate to areas where jobs exist, and inducing prospective workers to continue or resume their education. Frictional Unemployment is unemployment that comes from people moving between jobs, careers, and locations. Sources of frictional unemployment include the following: 1) People entering the workforce from school; 2) People re-entering the workforce after raising children; 3) People changing employers due to quitting or being fired (for reasons beyond structural ones); 4) People changing careers due to changing interests. 5) People...
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...You Decide Exercises. The U.S. economy has fallen into a recession. It is a severe and deep recession, and one that some economic analysts say may persist for at least another year. The unemployment rate has risen to levels not seen in over 20 years. The current unemployment rate is at 8% and is expected to rise further. The inflation rate is -2.4 percent, meaning that overall, prices are falling. After I read all the recommendation I can conclude: * I agree with lower interest rate as Raymond Burke said because lowering interest rates should encourage consumption and investment. * I do not agree with rise taxes as Kathy Lee said because that means that less money go to the economy, and as consequence there will be an increase in prices and/or cut jobs. * I do not agree with reducing government spending as Kathy Lee said because this would exacerbate the situation with more contraction in the gross domestic product. * I do not agree to leave interest rate intact as Patricia Lopez said because it would not be a stimulus to consumption or investment to the economics. * I do not agree with selling bounds and raising the bank reserve as Patricia Lopez said because this action can lead to restrain lending and reducing the rate of economic growth. * I agree with buying bounds as Allison Tanney said because is putting money into circulation by paying investors who has these bonds, so the money supply increase. * I do not agree with increasing interest...
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...| | Business Economics GM545 Project 2 | | Chapter 16-Question #5 Frictional unemployment Unemployment that is always present, it occurs when employees are transitioning from one place of employment to another or employees searching for new or better positions (Frictional Unemployment, 2013). Frictional unemployment is a natural part of our economy, and is considered to be necessary and beneficial. Frictional unemployment gives people time to search for jobs that they really want. It allows employers to choose the best employees to suit their demand. Without frictional unemployment, employees will be forced to continue to remain in jobs that they do not want, and employers will be forced to continue to employ employees that are not best suited for the jobs that they are in (Stone 2008). Chapter 16-Question #6 Hyperinflation is described as an extremely high rate of inflation, in the past it was thought that hyperinflation occurred when inflation was 50% a month, but now it has been redefined as when inflation is 100% per year. Hyperinflation is caused when government spending exceeds is tax revenues, and government is forced to print more money to finance these debts without concrete backing. During the peak of inflation, workers are paid hourly and they scramble to purchase whatever their earnings will allow them. In the end, money has no value, and other forms of trades such as barter takes over. This causes a distrust in the money and consumers are...
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...GM 545 Week 6: You Decide Scenario: The U.S. economy has fallen into a recession. It is a severe and deep recession, and one that some economic analysts say may persist for at least another year. The unemployment rate has risen to levels not seen in over 20 years. The current unemployment rate is at 8% and is expected to rise further. The inflation rate is -2.4 percent, meaning that overall, prices are falling. What should the government do to fix this problem? As the senior economist to the President of the United States, I believe it’s my goal to get more people back to work and slow down the inflation rate. It is clear that both business and the individual don’t have enough money or don’t feel confident enough to spend (consumer confidence) so the overall aggregate demand (AD) is falling. The first recommendation focuses on getting people back to work. To do this, companies need to have more money available to them. To do this, I believe that the President should encourage the fed to lower interest rates. Lower interest rates will encourage consumers and business to increase investments. It should also increase consumption as consumers will borrow at a lower rate. My second recommendation is for the government to lower taxes. Once taxes are lowered, the individual’s disposable income is increase thus; spending would increase (AD). Spending would also help increase consumer confidence. Once consumer confidence increases, money will flow back into business, allowing...
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...Business Economics GM545 Summer Session A July 2011 One Question One: Everyone’s Gasoline Problem Gas prices are constantly fluctuating with reviewing the text we see where the United States has depended on the Middle East to purchase the crude oil to manufacture the gas needed to fuel our cars. (Stone, 2007) It was evident that there were issues during the years of 2006 and 2007 when we seen the biggest rise in gas at that time there was not much we could do we needed to purchase the gas to use for everyday functionality throughout the United States we seen here in the state of Florida (Jacksonville) particularly that the prices went from $2.10per gallon to an all time high of $3.06 this increase was not gradual it was almost overnight when this increase was a period just about a month. This tended to come from some events that occurred in the following countries Mexico, Iran, Iraq, Israel, India, and North Korea that have energy markets on edge and the crude oil prices were heavily elevated at that time. (Jacksonville Bussiness Jornal, 2006). When looking at recent information that has been collected on gasoline prices we tend to look at earlier month May 2011, Jacksonville Florida was getting near the $4.00 per gallon with that we then seen a drop in prices from $4.00 down to $3.85. Typically this is when the summer driving season is starting and the elasticity for fuel starts to rise and continues to do so along with that need for gas the prices rise along with it...
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...Business Economics GM545 Feb/2012 lynnettehamrick@yahoo.com The gas prices in my area have significantly increased within the past few weeks. I reside in Silver Spring Maryland and my Nissan Maxima requires premium fuel. The current price at Shell for premium gasoline is $3.999. I'm paying $4 a gallon for gas. Fox five dc news reported that last year around this time, the price for regular gasoline was $3.25 a gallon (http://www.Thepriceoffuel.com). The gas prices lately have not been stable and since the recession started in 2008 the gas has been fluctuating around $4 a gallon for regular oil. Gas prices fluctuate for many reasons which include the price for crude oil in the world market, supply and demand for gasoline, local competing gas stations, government regulations, and taxes. Crude oil prices are 55% of the price of gas and distribution and tax account for the remaining 45% (http://www.Thepriceoffuel.com). The demand for gas occurs around summer vacation and major holidays where motorist consume the most gas. When people drive less and use other means of transportation like, car pools, public transportation, and bicyclist, this brings the demand down. The average price in Maryland for regular gas is $3.626 compared to a month ago at $3.416. The highest gas stations in the area our in Montgomery county, where as locations like Baltimore county and Waldorf have cheaper priced gas. Another aspect of the lower prices is that these our locally...
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...Mr. President, I would like to start off by thanking you for allowing me to have a voice on how the nation’s economy is controlled. I have three suggestions that I have concurred from my research. As President I think you should cut taxes, initiate a stimulus, and increase the Federal Reserve action. I say cut taxes because it’s a sure way to put more money in the hands of consumers and companies. Tax cuts, when used properly, have stimulated the economy. Former President George W. Bush got a lot of credit for moving the economy out of a recession with his tax cuts. The biggest problem that arises from this is that it reduces government revenues, which creates a budget deficit. All we have to do to counter this deficit is to cut government spending. When spending by consumers and companies shrinks, the economy contracts, but the government can fill the gap with a stimulus. The extra spending that we anticipate is meant to stimulate the spending of households and firms until the economy is expanding without need for outside help. We would have to address the problem that the stimulus adds to debt and many not fix the worst of the leftover finance problems. Last but certainly not least the increase of the Federal Reserve action can keep short-term rates low and push down the value of the U. S. dollar. Experts say a weaker dollar has been good for American exports and job growth. Our biggest point of worry here is that when and or if the economy rebounds then the Fed...
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...Course Project Part 1 GM545 Business Econcomics (Fall Session A 2010) November 9, 2010 Ethical Issues in Business Ethics is an everyday occurrence in the corporate world as well as one's personal life. Business ethics is the same as normal ethics. In both cases, ethics is knowing what is right or wrong, and/or learning what is right or wrong in the environment in which one is involved. An ethical issue may not have a concrete answer; therefore a person's decision may depend on that person's situation. This may happen because "ethics is a broad and murky area and the workplace is full of ethical dilemmas and issues" (Orinsi, 1999). Therefore, employees feeling the pressure to perform may resort to unethical decisions in order to meet the goals that they feel are unreasonable. This can happen at any level of management (Orinsi, 1999). I work in a industry full of healthful living and fitness plans, one of the most recent corporate ethical dilemas I believe is reasonable to discuss, centers around Susan G. Komen (SGK) for the Cure and chosing cause-marketing partner, Kentucy Fried Chicken (KFC). Questions have been raised by various media, including The Washington Post and The Huffington Post (one specifically about pesticides and their link to corn, chickens and cancer) to which Andrea Rader' SGK's director of commnications, responded with dollar amounts of SGK's contributions to research and education. (Stengel, 2010) In the majority of its responses to the media...
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...A CASE STUDY ON THE INDIAN SMALL CAR INDUSTRY Prof. Tapan Panda A Case Study on the Indian Small Car Industry A BRIEF OVERVIEW ON THE INDIAN SMALL CAR INDUSTRY If there is one big market that is forcing the global auto majors to think small, it is India. Until yesterday, all the world's auto-manufacturers expected to create success out of their midsize products. There were as many as five players in the mid car segment and just one--the Rs 7,956-crore Maruti Udyog Ltd (MUL)--in the small car segment. Suddenly Daewoo Motors India and Hyundai Motors India--are changing lanes midway, making the small car market as the pivot of their marketing strategy in India. Couple that with the fact that two domestic manufacturers--the Rs 10,074-crore Tata Engineering & Locomotive Co. (TELCO) and the Rs 223-crore Kinetic Engineering--are ready with similar indigenously-designed products to compete in this market The last two years has really been the period of war in the small car market The story Behind…. The auto majors read the market wrong. Since the small segment was dominated by MULwith a market share of 96 per cent and given that the Trans –national brands already had tried-and-tested mid-size models in Indian market, this segment was more attractive than the existing ones. This perceptual change was because of two reasons. • • The clutter in the large and midsize segment due to entry of many international players. The small segment grew faster than the mid-size one, driven...
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...Women face greater challenges at the workplace. Do you agree or disagree? Write an essay, giving reasons to support your viewpoint. A photograph recently caught my attention. It was a mother carrying her 18 month old daughter in one hand and a document in the other. What’s special about it? She is a member of the European Parliament, Licia Ronzulli, and this photograph was taken when she was addressing the parliament. This epitomizes modern motherhood, and takes multitasking to new dimensions. Just stringing together the two words “women” and “workplace” automatically conjures the third word in our mind- “Challenge”. But as work places are constantly evolving, what one perceives as a challenge is indeed changing. A few decades ago nurse , receptionist or secretary was all a working woman could aspire to be. Any woman who dreamed beyond was ridiculed and her integrity was questioned. Corporates viewed women as weaker and less committed than male counterparts. “Lady Candidates Need Not Apply”- was the common last line in job advertisements. Those 5 words in a ‘TELCO’ advertisement sparked Sudha Murthy to send the famous postcard to JRD Tata in 1974 saying “I am surprised how a company such as Telco is discriminating on the basis of gender”. When I first walked through TML factory, I wondered how Sudha would have felt 37 years before, knowing that hers were the first feminine footsteps there. Did she possibly know then that she had taken a giant leap for her kind in TELCO...
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...Daewoo Cars: Changing the Rules about How to Compete I. Introduction Daewoo-the South Korean corporation- was highly successful launched in entering the UK car market. It was successfully selling 35,000 vehicles in less of two years. This corporation continuously invests for £ 700 million in setting up a car factory in Britain, which considered to the large scale investment in design, development, and marketing and sales. In preparing the car launched, they were promoting themselves as ‘the biggest car company you’ve never heard of’. Daewoo was the second Korea’s bigger car maker and the 33rd largest business group and also has an aggressive plan for expansion and globalization. The pre-launched was stated the Daewoo presence and the market strategy in controlling the distribution chain by dealing direct customers. Daewoo’s market position was based on an innovative packaging of benefits and services around the car, a totally new approach to distribution, and the customer’s purchasing experience, and an emphasis on customer service. For evidence, Daewoo achieved 0.9 percent share of UK new car market by selling 10,000 vehicles within six month. The competitiveness in UK market car was fiercely challenging. According to the market research by Daewoo, motorist found that traditional motor dealers were not making customers feel welcome. The researches also found that one third of buyers were women. This market opportunity was used by Daewoo in implementing the...
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...Global Expansion Strategies of Two Korean Carmakers- Case Analysis B6110: Supply Chain Optimization and Outsourcing January 27, 2012 Two Korean Carmakers- Strategic Situations Daewoo and Hyundai are two Korean carmakers who enjoy many structural similarities. Yet the two are direct competitors in the Korean automobile industry, where they are jostling for position, pushing for economies of scale, and hoping to sure up a competitive advantage. Both Daewoo and Hyundai look to international expansion as their recipe for success. Each has formulated a specific expansion strategy in the past based on its particular market situation. Both Daewoo and Hyundai now look to international global expansion for future success. Expansion & Supply Chain The direct competition with each other in the Korean car market had an enormous influence on each firm’s past globalization strategies. The Korean automobile industry has been dominated by Hyundai since the 1970’s. By 1993, Hyundai had established a 50% market share in the Korean market, whereas Daewoo only held 20% (Bowon, 2005, p. 148). In 1993, Hyundai also enjoyed 58% of the market share of automobile exports by Korean companies, whereas Daewoo’s exporting efforts had failed (Bowon, 2005, p. 148). Moving forward from 1993, Daewoo and Hyundai took into account their competitive position against each other when deciding how to conduct their global expansion strategy. “Daewoo focused on expeditiously achieving...
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