...------------------------------------------------- mACROECONOMICS RECOMMENDATION FOR OPENING A GAS STATION June 16, 2014 DeVry University June 16, 2014 DeVry University TABLE OF CONTENT Contents TABLE OF CONTENT 1 INTRODUCTION 2 ECONOMIC FACTORS 2 GROSS DEMESTIC PRODUCT 2 INTEREST RATES 3 UNEMPLOYMENT 3 BUSINESS CYCLE 4 FISCAL POLICY 5 INTERNATIONAL TRADE 5 POPULATION AND DEMOGRAPHICS 5 RECOMMENDATION 6 REFERENCES 7 INTRODUCTION Starting a successful business depends on how well you understand and research macroeconomic factors, despite the common belief that you will succeed as long as you work hard. To determine the level of risk associated with opening a new business there are several key economic factors you need to look at. These factors are Gross Domestic Product (GDP), interest rates, level of Unemployment, business cycle, fiscal policy, monetary policy, international trade, and finally population and demographics. I would like to talk a little on each of these factors followed by my recommendation ECONOMIC FACTORS GROSS DEMESTIC PRODUCT The GDP, also known as The Gross Domestic Product, is the total value of the production of goods and services in the United States (Hubbard & O’Brien, 2013). The GDP is an indicator of how well businesses are doing, in the present economy, because if companies are spending money they must also be making money. According to the Bureau of Economic Analysis, there was an increase of 3.2% as of...
Words: 1176 - Pages: 5
...TO: FROM: DATE: December 2, 2010 SUBJECT: Larson Incorporated’s Economic Future This memorandum summarizes our recommendations for Larson Incorporated based upon foundational Milestones 1 through 3 and the predicated economic futures for Larson Incorporated. The recommendations include underlying attention to: pricing strategies, non-pricing barriers, business cycles, macroeconomic conditions, credit markets and affected global conditions over the next five years from previous Milestone research. Description of Three Alternatives Economic Futures Business cycles are alternating rises and declines in the level of economic activity, sometimes over several years (McConnell, Brue & Flynn, 2009). An understanding of cycles and their impact on Larson will allow Larson to react to changing economic conditions. The three alternative economic futures are recession, depression and expansion. (See Figure 1) Figure 1 The rising and descending of the economy is reflected below for the months between Jan 2006 and June 2010 (The National Bureau of Economic Research, 2010). Understanding this data and preparing for future expansions and contractions enables Larson to sustain through recessions and build smartly during times of expansion. Figure 2 Recession and Depression * Economic Future Recession is marked by a period of decline in total output, income and employment (McConnell, Brue & Flynn, 2009). There is widespread contraction of business activity...
Words: 1160 - Pages: 5
...Economic Recommendations August 7, 2012 ECO/372 In December, 2007, an economic downturn began. A recession ensued and by September, 2008, it earned the name of the Great Recession (Yglesias, 2011). The unemployment rate, declining values in the housing market, increasing foreclosures, bankruptcies, the swelling federal debt, increasing food prices, and multiplying fuel prices demanded an economic response through fiscal policy and monetary policy. As a result of those responses, the United States is in a slow recovery phase. An analysis and recommendation of the current economic state includes an observation of the proprietorship of policy interventions. Economic Factors and the Impact on Aggregate Supply and Aggregate Demand Unemployment The current unemployment rate is 8.2% which is essentially unchanged from the previous month of 8.3%. There were 163,000 new jobs added in July. The government reports 9,000 fewer jobs, and the private sector lists an increase of 172,000 on the payroll. In contrast to these figures, the job deficit in comparison to the employment numbers prior to the recession is 9.7 million. At this pace, it will take 10 years to return to full employment. The unemployment rate is shifting the aggregate demand to the left. This is due to less spending power of the consumer. Output will follow shifting short aggregate supply downward. Long aggregate supply remains vertical. Expectations The central bank predicted...
Words: 1718 - Pages: 7
...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...
Words: 589 - Pages: 3
... Return on Capital Employed 4 Gross Profit Margin 5 Operating Profit Margin 5 Net Profit Margin 6 Conclusion 6 Recommendation 7 Bibliography 7 Introduction: For this assignment the company I have chosen is The Carphone Warehouse Limited. The services they offer is mobile phone contracts pay monthly, pay as you go or sim only tariffs, but what's unique about this company is that they have different mobile companies like Orange, Vodaphobe, T Mobile, 02 and other phone company under one roof so that customers are able to compare different mobile tariffs before making a decision. For this assignment I will be looking at The Balance Sheet and Income Statement for the last five years. I will use date collected from the Income Statement and Balance Sheet and work out ratios to explain how the company is performing, this data will be presented in a table and line graph formant. l will be focusing on Profitability ratio so that I can see the company's performance in the last five years, I will analyse Return On Capital Employed, Gross Profit Margin, Operating Profit Margin, and Net Profit Margin. I will conclude on the findings based on the research and give recommendation to shareholders whether to invest or not. Working Out Table: | 2011 | 2010 | 2009 | 2008 | 2007 | Return on Capital Employed | Net Income (Net Profit)x 100%Non Current Liabilities +Shareholders’ Funds (Equity) | 169,265x100%22,725 +897,287 | 59,962x100%25,486 +728,002 | 36,747x100%41,701...
Words: 2119 - Pages: 9
...The Last Rajah: Ratan Tata and Tata’s Global Expansion Name: Student Id: Lecturer Unit Name: International Management Unit Code: BUS323 Table Of Content 1.0 Source of Problem 2.0 Secondary Problems • Short Term: 2.1 Recession 2.2 Human Resource and Organisational Culture 2.3 Union Strike and Rebels • Long Term: 2.4 Corus Company Debt 2.5 Jaguar and Land Rover Take over 2.6 Chairman Replacement 3.0 Analysis • 3.1 The Economy and Tata Group • 3.2 Loss of Control Within Tata 4.0 Criteria Of Evaluation: Goals (Objectives/Performance Targets/KPI’s/Decision Criteria and Their Time Frames. 5.0 Alternatives • Short Term • Long Term 6.0 Recommended Strategy • Short Term • Long Term 7.0 Justification of Recommendations 8.0 Implementation, Control & Follow Up 9.0 Bibliography 1.0 Source of Problem The case study reviews the global expansion and progress of the Tata Groups of Companies under the leadership and vision of Ratan N. Tatan. Over the years, there were several challenges the Tata Company faced in order to expand globally and to be able to achieve global top status. The slowing down of the economy in Asia, as mentioned in the article would be one of Tata company key challenges. Secondly, a fundamental problem would be the continuity of Tata Group in recruiting new talents capable of retaining the Tata group value system and ethical standards as the company grows and becomes...
Words: 2040 - Pages: 9
...Keller Graduate School of Management Business Economics GM545 Online Graduate Course Summer Session A, July 2010 You Decide 14 August 2010 The deep recession that we have found ourselves experiencing in this example doesn’t deviate far from our current economic situation as we stand as a nation today. With economic analysts predicting that recessionary conditions may persist for at least another year, the economy requires some government intervention to put it back on track. With prices falling and unemployment rising, a combination of both monetary and fiscal policy will be needed in order to bring the nation out of this severe recession. Prices are falling, with the inflationary rate at -2.4%, making it evident that both businesses and individuals are not spending and overall aggregate demand (AD) is falling. The Economic Consultant to the President, Mr. Raymond Burke, has recommended that the President lower interest rates to further help businesses and consumers “get back on their feet.” There are some inaccuracies in what Mr. Burke is recommending. The President has neither the ability nor the authority to make adjustments to interest rates. The Federal Reserve (the Fed) is responsible for the discount rate and for setting the reserve requirements. I do not agree with Ms. Patricia Lopez’s (Consultant to the Federal Reserve) recommendation to leave interest rates alone, sell bonds and raise the bank reserve. Raising the bank reserve will discourage banks from lending...
Words: 633 - Pages: 3
...Business report for Sky City Entertainment Group Limited and tourism industry. Contents Introduction 3 Discussion of findings 3 Industry background 3 Investigation of Financial information 5 Accounting elements 5 Ratios analysis 6 Profitability and Efficiency Ratios 6 Financial Stability Ratios 7 Financial Structure Ratios 7 Investment Ratios 8 Share Market Data 8 Brokers Recommendation 8 Share performance 9 Conclusion: 9 Recommendations 9 Reference List: 10 Appendix 11 Introduction The purpose of investigating the Sky City Group Limited (SKC) and tourism industry is to give a financial advice to a client who has recently asked for it in Vision Consultancy Limited. The sources of information and data used are reliable as it was retrieved from trustworthy websites such as: company’s website, Statistics NZ, NZX company research, tourism industry association New Zealand and Investorwords. The limitations of this business report are that financial statements of SKC used are for previous business year. And SKC does not disclose inventory turnover figure, consequently this ratio cannot be calculated. Also, there might be an increase in tourism after the Hobbit movie is released. Discussion of findings Industry background According to Tourism Industry Association New Zealand (2012), tourism is a fundamental contribution to New Zealand’s economy and way of life. It contributes close to 10% of gross domestic product (GDP), the earning for...
Words: 2308 - Pages: 10
...The deep recession, in this example, doesn’t deviate far from our current economic situation we are experiencing as a nation today. With prices falling and unemployment rising, a combination of both monetary and fiscal policy will be needed in order to bring the nation out of this severe recession. Due to falling prices, with the inflationary rate at -2.4%, it is evident that both businesses and individuals are not spending and overall aggregate demand (AD) is falling. The Economic Consultant to the President, Mr. Raymond Burke, has recommended that the President lower interest rates to further help businesses and consumers “get back on their feet.” I agree with lowering interest rates as Raymond Burke said because lowering interest rates should encourage consumption and investment. However, there are some inaccuracies in what Mr. Burke is recommending. The President has neither the ability nor the authority to make adjustments to interest rates. The Federal Reserve (the Fed) is responsible for the discount rate and for setting the reserve requirements. I do not agree with raising taxes as Kathy Lee states because that would mean less money would go to the economy, and as result there would be an increase in prices and/or job cuts. I also 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 (GDP). I do not agree with Ms. Patricia Lopez’s, Consultant to the Federal Reserve...
Words: 501 - Pages: 3
...AD/AS Models, U.S. Economic Critique ECO/372 April 20, 2015 Professor Godwin Quashigah AD/AS Models – U.S. Economic Critique The U.S. economy is primarily based on aggregate demand and aggregate supply (AD/AS), and significantly influenced by the factors of unemployment, expectations, consumer income, and interest rates. In addition, fiscal policies introduced by government leadership can affect the economy if they are effective. In the following paragraphs, we will examine the current state of the four factors above and how each affects AD/AS. Further, we will identify important fiscal policies currently being recommended by government leadership and evaluate those recommendations from the Keynesian and the Classical economic model perspectives. Unemployment Unemployment is an important statistic used by the U.S. government to gauge the health of the economy. Defined by the Bureau of Labor Statistics (BLS), the unemployment rate includes people who do not have a job, have actively looked for work in the past four weeks, and are currently available for work, including people who were temporarily laid off and are waiting to be called back to that job (Bureau of Labor Statistics, 2015). Those who have not looked for work within the past four weeks, and marginal workers that have given up searching for employment, are no longer counted among the unemployed and removed from the labor force total. In the United States, there are currently 13.5 million individuals...
Words: 1456 - Pages: 6
...consolidated the recommendations and have some advice for the President. Raymond Burke made a good point about lowering the interest rate, but he was incorrect about the President having the ability to control the interest rates. I would however encourage the President to make effort to persuade the Federal Reserve to lower interest rates. The lower interest rates will stimulate business, consumer spending and investments. Businesses can borrow at a lower rate and have more money available for investments. This will increase business confidence and lead to increased consumer consumption. Kathy Lee recommends that the President should increase taxes and decrease government spending. While this may work to decrease the deficit, it will not do much to help the current recession or the unemployment rate. I recommend that the President lower taxes. The lower tax rate will allow consumers to have more disposable income to spend on domestic goods produced. This will increase the overall aggregate demand, and increase consumer confidence helping to turn the recession around. With more goods being purchased it will increase the demand, and businesses will produce more goods, and hire more works for production, thus decreasing the unemployment. Allison Tanney our economic consultant believes we should increase government spending and lower taxes. I agree with Allison as I recommended earlier lowering taxes should lead to increasing the aggregate demand and help turn the recession around. I...
Words: 329 - Pages: 2
...RECOMMENDATION REPORT Access Mortgage-Employee Retention Plan October 17, 2012 A detailed analysis and recommendations on retaining current employees in this economic recession. LETTER OF TRANSMITTAL TO: FROM: DATE: October 17, 2012 SUBJECT: Recommendation Report Dear Ms. Mason: This report provides recommendations on employee retention in this economic recession. In an effort to prevent dissatisfaction in the workplace environment, I’ve compiled this report that will provide an in-depth analysis of the situation. Access Mortgage could potentially lose key staff based on the lack of financial compensation. In order to limit turnover and unpleased workers, this report will include the best recommendations on retaining employees. I’ve compiled data with the assistance of internal and external research, case studies, and industry specific analysis. If there are any question or concerns please reach out to me and I’ll be happy to answer any of your questions. Thank you. Farin Clementine TABLE OF CONTENTS LETTER OF TRANSMITTAL………………………………………………………ii EXECUTIVE SUMMARY…………………………………………………………………………..iv PROBLEM……………………………………………………………………………5 BACKGROUND……………………………………………………………………...5 BODY…………………………………………………………………………………6 CONCLUSIONS……………………………………………………………………....8 RECOMMENDATIONS…………………………………………………………..….9 WORKS CITED……………………………………………………………………...10 EXECUTIVE SUMMARY This report serves to recommend best policies and procedures...
Words: 2132 - Pages: 9
...Demand and Supply in the Macroeconomy ECON 372 Demand and Supply in the Macroeconomy The current state of our economy in the United States is no secret to anyone. In the United States over the past couple years, the economy has been lower than ever and not increasing as it should. Gas prices are at an all time high, home prices are at an all time low, and unemployment rates continue to stay on the rise. We’re still the largest and most powerful country in the world and our GDP holds steady at $47,200. That is an increase of 1.9% for the first quarter in 2012. The consumer spending rate has increased, although still not at a high for the United States. The current consumer spending increase was the largest that the U.S. has seen since late 2010. Although, the economy is picking up, it’s still at a low and that is due to Unemployment rates, Consumer Income, Expectations and Interest rates. Current Analysis Unemployment Unemployment is one of many causes for a bad recession and or trying to get out of one, so what is affected by the unemployment. There are many factors affected by unemployment which when one is affected a second one is right behind and so on which turns in a snowball effect. Let’s look at how unemployment affect these factors. First there are four different types of unemployment, a structural which is caused when an organization lays-off workers due to low demand for their goods and services, or the restructure of the organization in order...
Words: 2372 - Pages: 10
...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 businesses to hire back employees. My third recommendation would...
Words: 370 - Pages: 2
...TAKE HOME ASSIGNMENT Ukraine Module: Please add Faculty Name Faculty: Please add Faculty Name Due Date: January 5, 2015 Macro Economics: Ukraine 1. Executive summary Geo-political tensions have pushed Ukraine into a deep crisis. Real GDP is in sharp decline, expected to contract by 8% in 2014 with a continued retrenchment in 2015. The conflict in the East has disrupted economic activity, which in its turn made the collection of taxes difficult. The exports have declined and the overall consumer and investor confidence fell significantly. At the same time weak national revenue performance, rising expenditure to tackle the crisis along with a growing Naftogaz deficit make fiscal adjustment more challenging. Ukraine government has allowed a free floating exchange rate resulting in a 50% devaluation of the currency (figure 4). Import gas prices are high and energy efficiency of the national industries is poor. The balance of payments pressure remains high due to large external debt refinancing needs, low FDI and limited access to external financing. This means that challenges are ahead of Ukraine with deteriorating relations with Russia, a weak banking sector, low FX reserves, large debt repayments needs (for the next 2 years) together with constrained domestic consumption altogether pose risks and affect prospects for recovery. Positive factors for Ukraine are as follows: (i) the strong external support for Ukraine ($27bn in the next 2 years), (ii) authorities...
Words: 2862 - Pages: 12
