...or potential results of macroeconomic changes in the components of the economy. Using the Fairmodel tool, we can use a comprehensive computer model to predict the impact of a “shock” to the economy. We can analyze the impact of this “shock” on overall Real GDP (Aggregate Expenditure) as well as the impact upon the individual components that make up GDP (i.e. other macroeconomic components and indicators such as bond rates, money supply, etc.) For this analysis, we have created two models of the U.S. economy and will look specifically at the short run case (the first 5 - 8 quarters spanning 2012-2013). First, we created a “baseline” model which assumed that no change in aggregate expenditures occurred. Next, we created a model with a shock to the economy starting in the first quarter of 2012 by reducing state and local government purchases (COS) by $20 billion per quarter. By comparing the resulting data sets for these two scenarios across several variables, we can predict the impact that the “shock” to government spending would have on both the overall economy and the specific components of GDP. The reduction in state and local government spending was spurred by an overall reduction in tax collections. The government decided to reduce spending as a result. What is not initially clear is why there was a reduction in tax revenues, but there are several possibilities. The reduction in tax revenue could be due to fiscal policy changes, where the population was taxed at a...
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...Supply and Demand Simulation Angela Moore ECO/365 May 19, 2014 The examination will distinguish two microeconomics and two macroeconomics standards or ideas from the recreation, and demonstrate why every guideline or idea is in the class of macroeconomics or microeconomics. The examination will distinguish no less than one movement of the supply bend, and one movement of the demand bend from the reproduction and what causes the movements. The investigation will demonstrate for each one movement, how it might influence the balance price, quantity, and choice making. It will detail provision to take in material about supply and demand from the reenactment to working environment or true product. It will detail how ideas of microeconomics help understand the variables that influence moves in supply and demand on the balance price and quantity, and it will additionally detail how ideas of macroeconomics help understand the components that influence moves in supply and demand on the equilibrium price and quantity. The investigation will demonstrate how the price flexibility of demand influences a firm’s pricing strategy in relation to the simulation. Microeconomic theory recognizes economic reasoning from the perspective of people and firms and develops to an examination of the entire economy. Microeconomics is the investigation of one's decision, and how that decision is impacted by economic forces. Microeconomics studies such things as the evaluating strategies of firms, family...
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...Finance 3101: Key Questions Chapter 1 1. What does Financial Management involve? 2. What is the “Cycle of Money”? 3. How do lenders and borrowers benefit from financial intermediaries? 4. What are the four major areas of Finance? 5. What are the four types of markets for financial assets? 6. What are three ways of classifying financial markets? 7. What are the three main questions financial managers must answer? 8. What is the overriding goal of financial managers? 9. What are the five major determinants of stock prices and which are unambiguous in their impact on stock prices? Chapter 2 1. What are the principal financial statements and what does each one tell us? 2. What is the basic structure of the BS and IS? 3. Why is cash flow more important than Accounting profits? 4. What three factors make cash flow not equal to net income? 5. What are OCF, CFFA, CFTC and CFTO? 6. What is the cash flow identity and how does it relate to the BS identity? 7. Why might a firm’s OCF not all be available for distribution to investors? Chapter 3 1. How do we compare cash flows that occur at different points in time? 2. What is meant by “compounding” and “discounting”? 3. What is a time line and what purpose does it serve? 4. What are the four variables in the simple PV/FV relationship and how does each affect either PV or FV? 5. What specific question does each of the four variables answer? 6....
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...external environment. These forces can be divided into two components, the specific environment and the general environment (Robbins et.al 2012, p.86). The specific environment includes components that are directly involved with the organisation; customers, suppliers, pressure groups and competitors. In contrast, the external environment includes economic, political/legal, sociocultural, demographic, technological and global conditions (Robbins et al. 2012, pp.87-8).The purpose of this essay is to highlight an external environmental factor that has had a significant impact on Generic and discuss how this has been managed in accordance to relevant academic theory. In particular, the scope of this paper will be confined to legal conditions that have changed in the general environment. A discussion on how this has impacted Generic Health, the management approaches of understanding environmental uncertainty and environmental influence will be presented, following a review on the effectiveness of approached used to manage impacts of the external environment. is a manufacturing company that provides generic pharmaceuticals to over 5,200 pharmacies which has been impacted by legal conditions from the general external environmental. Legal conditions refer to regulations, policies and legislation set out by federal, state and local governments which influence what organisations can and cannot do (Robbins et al. 2012, p.89). Recent changes to the Pharmaceutical Benefits Scheme has impacted...
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...Stock Market’s Reaction to Federal Reserve Policy? Ben S. Bernanke Kenneth N. Kuttner∗ February 7, 2003 Abstract This paper analyzes the impact of unanticipated changes in the Federal funds target on equity prices, with the aim of both estimating the size of the typical reaction, and understanding the reasons for the market’s response. On average over the May 1989 to December 2001 sample, a “typical” unanticipated 25 basis point rate cut has been associated with a 1.3 percent increase in the S&P 500 composite index. The estimated response varies considerably across industries, with the greatest sensitivity observed in cyclical industries like construction, and the smallest in mining and utilities. Very little of the market’s reaction can be attributed to policy’s effects on the real rate of interest or future dividends, however. Instead, most of the response of the current excess return on equities can be traced to policy’s impact on expected future excess returns. JEL codes: E44, G12. 1 Introduction The reaction of the stock market to monetary policy is clearly a topic of intense interest both to market participants and policymakers. Those holding equities would obviously like to know how possible Federal Reserve actions might affect the value of their portfolios. Similarly, an estimate of the likely effect of policy on asset prices is an important ingredient in assessing the transmission of monetary policy through the “wealth effect.” The size of and of Governors of the...
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...liquidity of the market. Without the advantage of liquidity, every stock began to fall. The panic of investors came from the anticipation of the future market. This paper will investigate if the stock price correctly reflected the health of business or it was only the fear of investors. I will use the most famous market indicator: Down Jones Index and net profit from incomes statement of 30 stocks in Down Jones Index. Down Jones index uses 30 large value stocks in the market to represent the entire market. We expect to see if the Down Jones Index line shared the trend with the profit of 30 companies in Down Jones index. Introduction Financial Market during the Great Recession “It is well known that the Lehman Brothers’ default severly increased counterparty risk because the failed company had $729 billion of notional derivative contracts” From:STOCK MARKET REACTION TO THE GLOBAL FINANCIAL CRISIS: TESTING FOR THE LEHMAN BROTHERS' EVENT by Leonardo Becchetti and Rocco Ciciretti “Probably, it is the largest crisis after great recession of 1930s that has affected both real and financial sectors (Llanto and Badiola, 2010). This crisis originated in United States in second half of 2007 with the spark of subprime mortgage crisis and got worst momentum in the year 2008. “ From: Impact of global financial crisis on stock markets: Evidence from Pakistan and India by Rafaqet Ali “Many of these countries, particularly those with emerging markets, have been pulled down by the ever...
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...Impact of Macro-Economic Variables on the Stock Market Impact of Macro-Economic Variables on the Stock Market Arunabha Dhar (Roll No. 008) Gaurav Bhatt (Roll No. 017) Amartya Ray (Roll No. 067) Bodhisatva Basu (Roll No. 075) Rahul Jain (Roll No. 094) Arunabha Dhar (Roll No. 008) Gaurav Bhatt (Roll No. 017) Amartya Ray (Roll No. 067) Bodhisatva Basu (Roll No. 075) Rahul Jain (Roll No. 094) Contents UNDERSTANDING ON RESEARCH PROBLEM IDENTIFICATION & DEFINITION 3 ABSTRACT 3 INTRODUCTION 3 LITERATURE REVIEW 6 GAP in Research 8 MOTIVATION 8 DATA COLLECTION/SAMPLE SELECTION 9 HYPOTHESIS 10 Research Methodology 10 FINDINGS 11 CONTRIBUTION TO LITERATURE 23 CONCLUSIONS 23 References 25 UNDERSTANDING ON RESEARCH PROBLEM IDENTIFICATION & DEFINITION Relationship between macroeconomic variables and broad market index: A causal relationship between Nifty CNX and macroeconomic variables in India ABSTRACT The relationship between macroeconomic variables and broad market index by now are well documented in the literature. However a void in the literature relates to examining the causal relationship between Nifty CNX and macroeconomic variables such as FDI, FPI, weighted average lending rate (WALR), GDP and oil import in India and correlation among the macro variables. INTRODUCTION Globalization of Indian economy post liberalization has been spurred by capital and stock investment in terms of FDI & FPI. Indian stock market both securities...
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...forecast 1: .............................................................................................................. 6 STRATEGY 1: Clear pending inventory and prepare launch of new generation. ................. 6 Economic forecast 2 ............................................................................................................... 7 Strategy 2: Launch the new generation of Components and Custom .................................... 7 Economic forecast 3 ............................................................................................................... 8 Strategy 3: Take advantage of new products generations. ..................................................... 8 Economic forecast 4 ............................................................................................................... 9 Strategy 4: New generation of custom, reduce costs for components. .................................. 9 Economic forecast 5 ............................................................................................................. 10 Strategy 5: Try to clear the components inventory accumulated and benefit from custom . 10 3. 4. What we did well? ............................................................................................................ 11 What went wrong? ............................................................................................................ 11 1. What did Marketing and Sales department do? With the goal of increasing...
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...Analyzing World Commodity Prices René Lalonde* Principal Researcher International Department Bank of Canada Zhenhua Zhu Economist Research Department Bank of Canada October 18, 2002 Frédérick Demers** Economist Research Department Bank of Canada Abstract This paper develops simple econometric models to analyze and forecast three components of the Bank of Canada commodity price index (BCPI), namely non-energy commodity prices (BCNE), the West Texas Intermediate crude oil price (WTI), and other energy prices. In the paper, we present different methodologies to identify transitory and permanent components of movements in these prices. A structural vector autoregressive (SVAR) model is used for real BCNE prices, a multiple structural-break technique is employed for real crude oil prices, and an errorcorrection model is constructed for real prices of other energy components. Then we use these transitory and permanent components to develop forecasting models. We assess our models’ performance in various aspects, and our main results indicate: (a) for real BCNE prices, most of the short-run variation is attributed to demand shocks, (b) the world economic activity and real U.S. dollar effective exchange rate explain much of the cyclical variation of real BCNE prices, (c) real crude oil prices have two structural breaks over the sample period, and their link with the world economic activity is strongest in the most recent regime, (d) real prices of other energy components are highly correlated...
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...Environment Components on Trade Companies in Romania Authors: Elena Pîndiche, The Christian University Dimitrie Cantemir of Bucharest, Romania; Roxana Ionita, Lecturer, The Christian University Dimitrie Cantemir of Bucharest, Romania This paper deals with the impact of micro and macro environment components on trade companies in Romania. Trade companies organize and operate under specific environmental conditions impact or both. In the activity of any companies the environment plays a key role in defining its strategies in seizing and using opportunities of development, being practically the support in achieving the objectives of growth, profitability or just survival. Trade companies should have the best possible perception of the components on each macro, because some of them are heavily dependent than others. Dealing with environmental factors allow detection trading company strengths and weaknesses, and to measure responsiveness and anticipation. Keywords: micro environment; macro environment; company Introduction Trading company designs and operates under specific environmental conditions impact or both. The external environment of the firm identifies two major components: the microenvironment - the firm has direct links, reciprocal often imposed by the need to achieve its object and macro environment - the firm has indirect relationships in most cases only company suffering its influence. The micro and macro environment components of the...
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... 443.8 118.2 151.5 5.6 61.72 16.44 21.07 0.78 change (1.42%) (-2.39%) (0.76%) (0.19) 1975 1638.3 1034.4 230.2 357.7 16 63.14 14.05 21.83 0.97 change (1.32%) (3.39%) (1.00%) (3.7%) 1985 4220.3 2720.3 736.2 879 -115.2 64.46 17.44 20.83 -2.73 change (2.8%) (-1.98%) (-2.32%) (-1.5%) 1995 7397.7 4975.8 1144 1369.2 -91.4 67.26 15.46 18.51 -1.23 change (2.93%) (1.06%) (0.54%)...
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...buying center it consists of a purchasing manager, buyers who identify domestic and international sources of materials and components, and representatives from research and development, production and quality control. Also at Trek, purchasing managers are most likely to comprise the buying center in a decision to select a new supplier. Sometimes, in important technical purchases, it will be representatives from research and development, production, and quality control. It is very important to Trek that these new suppliers must benefit the company, for example in a way that has an environmental impact. These individuals are the deciders who have formal/informal power to select or approve when a supplier should receive a contract. 2. Trek requires four criteria when identifying potential suppliers. These are quality, delivery capabilities, price, and environmental impact of their production process. In regards to these criteria, current suppliers receive scores on the number of defects in large quantity of supplies, whether just-in-time orders made their deadlines, if the target prices were maintained, or if recycled packaging was used. Once a business is selected, it is continuously evaluated based on the elements of those four criteria. 3. One of treks criteria for evaluating existing and potential vendors is their environment impact. Trek slogans the phase “ We Believe in a Better World”. In a sense, they are saying implying that they want to help contribute...
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...EXCHANGE RATE, COMPETITIVENESS AND BALANCE OF PAYMENT PERFORMANCE Exchange Rate, Competitiveness and Balance of Payment Performance U P Alawattage Abstract This paper examines the effectiveness of exchange rate policy of Sri Lanka in achieving external competitiveness since liberalization of the economy in 1977. The conventional two-country trade model that explains the traditional approach to Balance of Payment (BOP) was applied using quarterly data covering the period of 1978:1 to 2000:4. Results reveal that the Real Effective Exchange Rate(REER) does not have significant impact on improving the Trade Balance (TB) particularly in the short run implying a blurred J-Curve phenomenon. Even though the cointegration tests reveal that there is a long run relationship between TB and the REER it shows very marginal impact in improving TB in long run. (JEL F40, O24) I. Introduction The exchange rate is the price of national currency in terms of foreign currency. The close linkage of the exchange rate to the general price levels of the economies produce an economy wide importance of policy making since it affects the real income and wealth of those economies. One of the major objectives of the exchange rate based stabilizations is to improve the Balance of Payment (BOP) performance through international competitiveness. Countries have been using this strategy for a considerable period of time producing varying results. The empirical observations reveal that some countries were...
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...Problem 1 a. How is Dow Jones index computed? Write 1 paragraph on the history of when the Dow Jones Index was first initiated. Computation Method: Dow Jones is a price-weighted index. So, to calculate the DJIA, the sum of the prices of all 30 stocks is divided by a devisor which is named the Dow Divisor. The divisor is adjusted in case of stock splits, spinoffs or similar structural changes, to ensure that such events do not in themselves alter the numerical value of the DJIA. Early on, the initial divisor was composed of the original number of component companies; which made the DJIA at first, a simple arithmetic average. The present divisor, after many adjustments, is less than one (meaning the index is larger than the sum of the prices of the components). That is: Where p is the prices of the component stocks and d is the Dow Divisor. Events like stock splits or changes in the list of the companies composing the index alter the sum of the component prices. In these cases, in order to avoid discontinuity in the index, the Dow Divisor is updated so that the quotations right before and after the event coincides: History: Dow Jones & Co. was founded in 1882 by Charles Dow, Edward Jones and Charles Bergstresser. Despite popular belief, the first averages were not published in the Wall Street Journal but in its precursor, called the Customer's Afternoon Letter. The first averages didn't even include any industrial stocks. The focus was on the growth stocks of...
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...pair of leather boots illustrations that prioritizing my needs before any of my desires. The theory of economics is divided into two individual categories known as the microeconomics and macroeconomics theories. Microeconomics theory teaches of how individual choice is influenced by economics forces. Example, the high prices of the new IPhone6, is based on the how many people want or are willing to buy them. Then there is macroeconomics, which is the study of the whole economy. Such as the inflations problem that is seen on a daily basis and rising unemployment rates throughout the country. When speaking of microeconomic discuss main principles one of which is explain in details in weeks two simulation. This concept is known as supply and demand. These principles describe how the price and quantity rely on one another. First and foremost, is the Law of Demand. This law states that quantity demand increases as price fall, other things constant. And vice versa when quantity demanded decreases as price rises. We can graph the demand on an x and y axis as a curve that has downward to the right slope that indicates the connection between price and quantity. There are times where there will be movement along the demand curve or a shift. A shift in the demand curve happens when quantity demanded wants or needs an amount per unit of time at a specific price. Our textbook explains that are several influences such...
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