...The attack on the World Trade Center on September 11th, 2001 had a profound effect on the economy in both an immediate and lasting way. While the economy prior to 9/11 was not an ideal one, it cannot be compared to how horribly it was hurt immediately following 9/11. 9/11 immediately and effectively crippled the economy in a massive way. The effects of 9/11 on the economy can, in fact, still be felt today. 9/11 turned an already declining economy into an economy that was utterly crippled and affected the economy on such a scale that its effects remain to this day. Prior to the 9/11 attacks, the U.S. economy was already weakening and declining. According to wiki.dickinson.edu, the American economy was doing very well from the mid-1900 to the early 2000’s. The GDP began declining during the first quarter of 2001. During this time, the growth of the GDP slowed. In addition, production fell, unemployment increased, inflation rose, stock prices decreased, and, as a result, America saw a strong decrease in consumer spending. Because of the decreasing economy, American companies saw a decrease in profits and had to downsized, which increased unemployment even more and led to unemployment reached...
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...The Great War, commonly known as World War I was one of the bloodiest wars in history. Central Powers formed from four different countries: Germany was the strongest, Austria-Hungary, The Ottoman Empire and the Bulgarians who joined later on. These four countries were ruling Europe and expanding their empire. Something had to be done about this and the central powers had to be stopped. Their expansion had a huge impact on France and Britain because they were the strongest countries in the European Union which lead them to fear The Central Powers. So the Allied Powers who fought the Central Powers were formed from France, Great Britain, Russia, Italy and the United States who also joined later on. For many American citizens, U.S entry into...
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...the stock market the most. While current events such as natural and human made disasters can cause an immediate reaction in the stock market, what drives long-term trends is the future. The stock market is all about what will economic and political conditions today mean to corporate profits in the future. Current events that shake the market, but have no long term effect on the economy or business climate are often shaken off and market conditions return to the previous conditions”. (Ken Little, About.com Guide). Stocks are shares of ownership of a public corporation that are sold to investors to allow the companies to raise a lot of cash at once. The investors profit when the companies increase their earnings, which keeps the U.S. Economy growing. Mutual funds give you the ability to buy a lot of stocks at once. In one way, this makes them an easier tool to invest in than individual stocks. By reducing stock market volatility, they have also had a calming effect on the U.S. economy. When stock prices go up, bond prices go down. There are many different types of bonds, including Treasury bonds, corporate bonds, and municipal bonds. Bonds also provide some of the liquidity that keeps the U.S. economy functioning smoothly. It is important to understand the relationship between Treasury bonds and Treasury bond yields. When bonds go down yields go up to compensate. When Treasury yields go up, so do mortgage interest rates, when Treasury values decline, so does...
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...When we think about GDP, it is important to determine the country’s output. When I say the country’s total output I mean everything produced by the people of the country, as well as all the companies within the country. Today I will be discussing to you all the recent history and expected future conditions of the American economy. In the current American economy, we must concentrate on the future. The current trends that are taking place in our economy are essential for determining the future of the U.S. economy. Some of the trends in the U.S. economy consist of business cost rising due to uncertainly. What this means is that as a result of the 2008 financial crisis, businesses have to change their way of doing business just to keep up. Another trend is companies hiring less full-time workers and more part-time, and temporary employee. The reason that companies do this is because they want to keep their overhead low, remain flexible in an unstable environment, and to keep from paying higher health care benefits. The U.S. economy is gradually declining in global economic power. According to current trends the U.S. will take part in another major crisis, but will not have an economic downfall. Current statistics about the U.S. economy indicates that the economy is growing at a fast rate. The moderate growth rate is about 2-3% which is good enough to create more jobs but it will create more inflation. Some of you may be wondering how the GDP is determined. The way GDP is determined...
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...Is U.S. manufacturing signaling a recession? By Heather Long @byHeatherLong America's manufacturing sector is losing its spark. Demand has cooled as the global economy slows down, especially in China. What happens in manufacturing is often seen as a leading indicator of U.S. recessions. It's an alarming sign when it starts to look queasy. On Monday, the ISM Manufacturing Index -- the official thermometer of the U.S. manufacturing sector since 1915 -- declined for a fourth straight month. It came in with a reading of 50.1. That's just above the red flag zone. Anything below 50 would signal a manufacturing contraction. The hit to manufacturing is due to three reasons: 1. The dramatic plunge in oil prices 2. The sluggish global economy 3. The strong U.S. dollar None of those factors is likely to change soon. Oil and gas prices are expected to stay low as the world remains flooded with oil. Similarly, the U.S. dollar will probably remain strong, making American goods more expensive relative to European and Asian products. Now there's concern about what this could mean for jobs. Manufacturing had been making a solid recovery from the Great Recession. Over 850,000 jobs came back. Those gains could be in trouble if the sector officially starts shrinking. Related: U.S. economy only grows 1.5% as global slowdown hits Not as bad for the U.S. economy as it looks Still, some experts say it's too early to get concerned. The reality is that manufacturing plays a much...
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...of compensation of US and China c) comparison of hourly manufacturing compensation cost of US and selected economies and regions. China manufacturing statistics don’t follow regular international standards and sometimes could be hard to understand the data. China does not systematically collect labor statistics like other countries and all of their information about manufacturing has been collected by a set of hypotheses and estimates by U.S. Bureau of Labor Statistics. Even though China data collection has many gaps, the International Community accepts the accumulated data as valid. Hourly compensation costs of manufacturing employees of China compared to U.S. manufacturing from 2002-2008. The data tables suggest that China manufacturing cost has risen on a constant steady pace. In 2008 China manufacturing cost was $0.57 and in 2008 it $1.36 (Manufacturing in China). Largely there is still a big gap compared to U.S. manufacturing and you can where China has gain many manufacturing jobs due to their relative low cost of manufacturing. Hourly compensation cost of manufacturing employees in selected economies and regions suggest that China has the lowest manufacturing cost out of U.S. , Japan, Europe, Mexico, Philippines and all East Asia countries (Manufacturing in China). The U.S had the highest manufacturing cost following closely by Japan (Manufacturing in China). U.S seems to be at a disadvantage on manufacturing hourly rates and companies will find that it is easier to manufacture...
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...China’s Economic Growth 1978-2025: What We Know Today about China’s Economic Growth Tomorrow Views of the future China vary widely. While some believe that the collapse of China is inevitable, others see the emergence of a new superpower that increasingly poses a threat to the U.S. This paper examines the economic growth prospects of China over the next two decades. Extrapolating past real GDP growth rates into the future, the size of the Chinese economy surpasses that of the U.S. in purchasing power terms between 2012 and 2015; by 2025, China is likely to be the world's largest economic power by almost any measure. The extrapolations are supported by two types of considerations. First, China’s growth patterns of the past 25 years since the beginning of economic reforms match well those identified by standard economic development and trade theories (structural change, catching up, and factor price equalization). Second, decomposing China’s GDP growth into growth of labor and other variables, the near-certain information available today about the quantity and quality of Chinese laborers through 2015, if not several years after, allows inferences about future GDP growth. Short of some cataclysmic event, demographics alone suggests China’s continued economic rise. If talent is randomly distributed in the world population and if agglomeration of talent is important, then the odds are strongly in China’s favor. Introduction The rapid economic growth of China since the...
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... Does the Selective Service Act address the need for an effective fighting military in the U.S.? How or how not? How would a draft affect morale of soldiers? Looking at the soldier’s experience in Vietnam, how would a draft today affect soldiers both during and after a modern conflict? If the U.S. enacted the draft today, what would the American public response be? Would this have a positive or negative impact on the U.S. overall? If a draft were reinstated today, how might domestic issues in the U.S. be influenced? How would domestic issues such as the economy, political leadership and contemporary American culture influence foreign policy either with or without a draft? Is an all-volunteer military a more effective fighting force? Why or why not? Is it an American’s patriotic duty to serve in the military during their lifetime? Would a powerful, drafted military force enhance or impair U.S. foreign relations? According to the Selective Service Act, men ages 18 to 26 must register. Should women be required to register as well? Enacting a draft is the best solution for engage American youth in domestic and foreign politics. How do veterans contribute to American society upon their return, and are their contributions defined by whether they were drafted or volunteers? Does American media today accurately inform the public regarding military actions in other countries? Does the media...
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...how it affects our economy. Some people think that the dollar has not changed and has always been worth the same price, but the price of the dollar has also gone up and down in value since 1900. The first dollar was created in 1862 and has changed many times since. Congress also changed U.S. currency in 1960 when they got rid of the silver certificate and stopped using silver in quarters and dimes. The dollar bill today was actually created in 1963, most of the illustrations on the dollar bill are from 1929 when it changed in size. Not only did congress get rid of the silver certificate, but they also...
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...The role of government in the U.S economy extends far beyond its activities as a regulator of specific industries or gatekeeping. The government is also responsible for managing the overall pace of economic activity, with its objective of maintaining high levels of employment and controlling price stability (inflation). It has two main tools for achieving these goals: fiscal policies, which is done through taxes and spending and monetary policies, through which it manages the supply of money. In this paper, I will discuss the why high deficits of today will reduce growth rate of the economy in the future, look at the history of our nation’s debt and deficits, different elements that causes of deficit and why the cause actually matters, what role the fiscal and monetary policies have to lead to higher or lower budget deficits and how deficits affect the overall long-term economic growth and debt of the U.S. Let us first begin by learning the difference between the terms debt and deficit. In economics, the term deficit means a shortfall in revenue of a fiscal year. It is when the government’s revenue called receipts, which are collected taxes (payroll, corporate, excise, income and social insurance), fee revenues and tariffs that are called receipts are lower that what is spent called outlays. In other words, the federal budget deficit is the yearly amount by which spending exceeds revenue. The term debt is described as an accumulation of deficits so the national debt is the...
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...domestic automotive manufacturing, and an Italian clothing company, and the importance behind the Gross Domestic Product (GDP). Fiscal Policy Economics is a daily issue that concerns personal and business financial activity. The United States is known as one of the strongest financial countries. It is complicated to understand how the United States deficit, surplus, and debt can affect the population economy. The economy can affect different areas and individuals, such as taxpayers, unemployment individuals, GDP, importer and exporter companies, college students, social security and Medicare users. The economic is not affecting only the present but will influence in the future financial activity. Unemployed individuals A deficit is a loss under payments and surplus is the excess over payments. Debt is equal to deficit minus surpluses. If the government has a surplus on the budge, it means there is money saved that can be used to generate employment. When a deficit is negative, it means that the economic has a very low opportunity to growth. The U.S.’s deficit affects unemployed individuals when a government expense exceeds their available income. In theory, when people spend...
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...EC 301 Intermediate economics | The American Economy | Keynesian and Monetary Theories, Budget Deficits, Trade Deficits, and Supply-side Economics | | Nathan Johnson | 5/5/2013 | | The past twenty years has seen a great shift in economics of this country. In the early 1990’s the U.S. economy was struggling and was a major topic of the previous presidential election. Fast forward twenty years and an economic boom and bust later, the presidential election again was based on a struggling economy. By taking a closer look at the policies and practices that took place in that span we might be able to find a better understanding of how our government can influence our economy. In the field of economics there are several varying sets of ideals of how policies should be implemented. Two of those groups are the Keynesian theorists and the monetary theorists. These two groups offer different perspectives of what is “right” in the world of economics. Each option provides its positives and negatives, but it is up to each economist to determine which negatives are worth giving up. The Keynesian theorists believe in correcting economic downturns with fiscal policy actions. Actions that would please Keynesian theorists would include changes in government spending, changes in the amount of taxes, and changes made to investments in long term productive growth. During the most recent fiscal crisis, these theorists were happy with the stimulus package that was created by the...
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...for the opportunity to speak to you today on such an important topic of our economy. I will attempt to simply address concepts and terms which focus on international trade and foreign exchange rates. Much of the discussion will focus around the surplus of imports brought into the U.S., and the impact it has on the U.S. businesses and consumers involved. I will also describe the effects of the international trade to GDP, domestic markets, and university students. It is important to understand how the government’s choices, in regards to tariffs and quotas, affect international relations and trade; so I will describe the interactive relationship in regards to tariffs and quotas, and how the government’s choices affect international relations and trade. We will also understand how foreign exchange rates are determined, and identify the reasons the U.S. does not restrict goods from China and minimize imports from other countries. The U.S. imports many goods from various countries around the globe; and the trading of these goods plays an important role in the stability of economic growth for the U.S. The U.S. imports goods or products from other countries such as China; and if the U.S. has a surplus of imports it means there is an increase in the trade deficit, which is not good for the U.S. because trade deficits usually increase unemployment. Examples of products with an import surplus in the U.S. are China’s auto-parts. The U.S. auto-parts...
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...two countries. Today, China has become one of the largest trading partners with the United States, trailing only behind Canada and Mexico. The United States benefits with this trade agreement due to the large and growing consumer market for U.S. firms and the Chinese imports cost less due to the low labor cost in China. The nation of China benefits due to the increased integration with world economy through overseas education and trade, creating awareness on issues such as environment and human rights. The numerous benefits of this union between two powerhouses of the world economy bring many negative issues. The first issue that affects many Americans today is the loss of jobs due to outsourcing and importing rather than producing goods here in the United States. From the years 2001 to 2010, the trade deficit with China caused the loss of 2.8 million jobs in the U.S. This affects the Untied States’ economy by increasing the number of Americans receiving unemployment insurance and food stamps. One example of this outsourcing is Nike, Incorporated which produces an estimated forty percent of its shoe output in Chinese factories. However, Nike Inc. justifies this outsourcing because profit margins are dependent on labor cost. Another issue with the union between U.S. and China is the lack of flexibility of China’s exchange rate. Many experts argue that China’s exchange rate is the main cause of the international imbalance currently present in the world economy. China’s goal...
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...3, 2, 1: Global Debt Meltdown We are steamrolling toward a massive global debt meltdown, and at this point world leaders seem to be all out of solutions. Over the last 30 years or so, the greatest debt bubble in the history of the planet has produced unprecedented prosperity in the western world. But now that debt bubble is starting to burst and the bills are coming due. Many believe that "ground zero" for the coming global debt meltdown will be in Europe. Unlike the U.S. and Japan, the nations of the EU can't just print more money to cover their debts. Nations such as Greece, Portugal and Italy must repay their debts in euros, and those nations are rapidly getting to the point where their debts are going to overwhelm them. Unfortunately, major banks all over Europe are very highly leveraged and are also very heavily invested in the sovereign debt of nations such as Greece, Portugal and Italy. If even one EU nation defaults it will start tipping over financial dominoes. If more than one EU nation defaults it could cause a cataclysmic wave of bank failures all over Europe. But Germany and the other more financially stable countries of the EU cannot bail out nations like Greece, Portugal and Italy indefinitely. Pouring money into Greece is like pouring money into a black hole. When you take money from financially stable countries and pour it into hopeless messes, you may stabilize things for a little while, but you also cause the financial condition of the financially...
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