...The Following are several recommendations to our President regarding our government spending as well as a few tax based economic factors. First we will take a look at our government spending. The initial recommendation is related to lowering our interest rates, lowering interest rates will do several things, one it will increase the money supply, in turn aggregate demand increases growing the bank accounts of many Americans. Most of all the positive affects it will play for those Americans that run small businesses will have no trouble adding expenses to their yearly budgets, further adding otherwise unemployed Americans to the expanding labor force, all this leading to an escalation in the US output ultimately increasing the GDP. As were all-aware we have a looming Fiscal cliff, it seems were all doomed according to the media, are we? Can new and old tax codes make or break a society? “The fiscal cliff is political shorthand for the combination of spending cuts and tax increases scheduled to hit Jan. 1, 2013. It's the result of the expiration of the President Bush-era tax cuts combined with $1.2 trillion in automatic reductions in federal spending made last summer as part of the deal to raise the debt ceiling” ("Money Morning", 2012). To think these tax breaks and spending cuts alone will propel us out of this recession is wrong. Although, investing in the labor markets, creating infrastructures, growing our law enforcement and financing the correct areas of the education...
Words: 344 - Pages: 2
...Aggregate Demand and Supply Models The US economy is highly dynamic and subject to a wide range of economic forces. Based on the latest economic data, our learning team will analyze the forces that drive the economy of the United States. The analysis will cover the following topics: • Macroeconomic topics related to unemployment, expectations, consumer income and interest rates • Factors that control the aggregate demand and supply in the United States • Government leaderships choices regarding • Additional recommendations based on Keynesian and Classical model perspectives. Unemployment rates fluctuate when the supply and demand for human resources are out of balance. The supply and demand are a result of the interaction of economic, policy and structural factors. Economic factors affect both supply and demand. The demand for goods and services increases production which results in the demand for workers, increasing the employment rate. The common thought among economists is that market-driven economies move in cycles and when they drop below certain levels unemployment may result. The moving of production from high wage countries to low wage countries is another factor that increases unemployment. A declining manufacturing sector will result in not enough jobs to go around along with third world competition. While new jobs are being created in the technology and service sectors it is not enough to make up for the amount of jobs that have been lost due to moving the manufacturing...
Words: 1224 - Pages: 5
...8 issues found in this text Report generated on Fri, Mar 7 2014 02:25 PM Grammar 4 issues Use of articles (1) Comparing two or more things (2) Passive voice use (1) Punctuation 3 issues Punctuation within a sentence (3) Style and Word Choice 1 issue Vocabulary use (1) Definitions GDP (Gross Domestic Product), which is the total value of all the products and services produced by a country within a given year less the net income from investments in other countries. 1 Real GDP is the GDP once changes in inflation have been taken into account once that has 2 3 been done you are left with the "Real GDP". Nominal GDP is the current market value of the nation's GDP. Unemployment Rate is an estimated percentage of people that qualify as 4 unemployed as long as certain guidelines are met under the rules. Inflation Rate is a term that 5 6 is used that refers to the rise in prices in a given product or service over a given time period . Interest rate is a monthly or yearly charge a lender puts on a loan to a borrower. The rate is in most cases a percentage of the total amount of the loan. In the purchasing of groceries, a household needs to add this to the overall budget of running the house. It is a need of the household and must 7 be budget for , or a family might not have the money needed for the purchase. The company that sells the groceries counts on the consumer to buy from his/her store and has a goal 8 of the number of product he/she must...
Words: 1119 - Pages: 5
...Economic Critique ECO/372 University of Phoenix Economic Critique Aggregate supply and demand are two of the most important elements to consider in all of macroeconomic, regardless of which of the many theories or models one applies. Understanding how various economic factors influence supply and demand is very important particularly vital to the government while determining economic policy. Factors like unemployment, expectations, consumer income, and interest rates all have an affect on the aggregate supply and demand. These factors will be discussed from both the Keynesian and Classical macroeconomic perspective. Current State of Unemployment, Expectations, Consumer Income, and Interest Rates Unemployment The unemployment rate has been steadily dropping over time. As of the summer of 2012 the unemployment rate was at 8-1/4 percent, and fell to a little below 8 percent as of January 2013 (Board of Governors of the Federal Reserve System, 2013). However, this improvement is still well above unemployment rates pre-recession. Also, a larger portion of the unemployed have been so for six months or longer (Board of Governors of the Federal Reserve System, 2013). In more recent months according to "Bureau Of Labor Statistics" (2013), “the unemployment rate edged down to 7.4 percent as of July 2013” (News Release USDL-13-1527 ). Economists try to interpret this information in order to better determine which way government policy should go. According economist, John...
Words: 1695 - Pages: 7
...Week Four Reflection Summary ECO/372 November 5, 2012 University of Phoenix Week Four Reflection Summary In week four, Team D—Joe, Beverly, Kevin, and Rachel—learned about deficits, surpluses, and debt in relation to the macroeconomic health of the United States. The group as a was very comfortable with the discussion of the week while learning new information about the health of the economy. The following is a summary of what the team learned in regard to deficits, surpluses, debt, and the health of the economy. Budget Deficits Budget deficits occur when government expenditures exceed the amount of revenue coming into the economy through income and taxes. A deficit is a summary of how the economy measures the state of using and accounting procedures. Since World War II, the United States government has run a large amount of deficits, as opposed to surpluses. A deficit can be good or bad, depending on the specific condition of the economy. When the government runs a budget deficit, the goal is to improve the economy. When the economy is not progressing at a rate the country expects, the government will spend money to help stimulate economic growth. If the government spends money to improve revenue for the long-term, both the government and society benefit by the added debt. A budget deficit can help businesses create more jobs to limit the amount of unemployment and improve consumer income. The debts accumulated may be the result of spending on worthwhile projects like road...
Words: 918 - Pages: 4
...International Trade and Finance Speech ECO/372 International Trade and Finance Speech Macroeconomics consists of the large scale economic factors such as interest rates and national productivity. International trade, finance and exchange rates are a large part of this study. Today, we will dive into the basic definitions and descriptions of simple terms and concepts as they relate to macroeconomics. “The trade balance is the difference between a country’s exports and imports” (Colander, 2010). When a country is exporting more than they are importing a surplus is created, so there is more production than consumption. The opposite is true for a trade deficit. A country that imports more than it exports is running in a deficit; consumption is more than production. An example of a product in the United States with a surplus is oil. Seven years ago the U.S. imported about two-thirds of their oil consumption. By 2014 it is expected that the U.S. will only import 6 billion barrels of crude oil per day; this is about one-third of what the country uses and by 2020 U.S. oil production will exceed Saudi Arabia’s (Phillips, 2010). The problem is that the oil produced in the U.S. is high-quality crude and the oil imported is heavy, sour oil. Since the refineries are currently equipped to refine the heavier oil the U.S. has a surplus of the high-quality crude. One would expect lower oil prices with the surplus, but as the current gas prices reflect this is not the case. While the process...
Words: 1074 - Pages: 5
...Individual News Article Daniella Baca ECO/372 October 21, 2013 Dr. Darryl Baker Individual News Article A factor that consumers must consider today is the impact that interest rates have on the United States economy. Economists believed that the housing market would begin to heal, auto sales would hit a record high, and the government would begin running a surplus. However, the only correct prediction was the rise in auto sales. Auto sales rose tremendously, and was a good sign of the economy slowly recovering. Even though the government has full control of the economy their actions greatly affect the economy. In this paper I will analyze the effect that interest rates have on the economy and how aggregated supply and demand is affected. The U.S. economy remains weak and the government has considered tapering. Tapering would mean that the government would have to reduce its asset purchase program. This process would have to be slow and gradual so that the markets will not be affected. Economists believe that tapering would result in an increase in interest rates and could have bad effects on the economy. The first part of the economy to be affected would be mortgage rates. The housing market is critical to a thriving economy and higher interest rates would slow it down drastically. For this reason tapering would be risky to the economy. Higher interest rates will hurt everyone except the investors who rely on interest income. Higher interest rates leave...
Words: 922 - Pages: 4
...International Economics Paper Lisa Bailen ECO 372 September 9,2015 Brian Leben International Economics Paper The test for distinguishing good stimulus ideas from bad ones; is the proposal likely to raise the economy to a sustained, higher level of growth? Presidents have limited powers, particularly with something as big and ungainly as the U.S. economy. The president has little control over the massive forces such as technological advances, consumer-buying habits, outlines of international trade and variations in demographics (Heritage.org, 2008). In order to cut taxes, boost government spending or change laws to encourage investment, a president must gain the backing of Congress, which is not always easy. The president has little control over the government agency that probably wields the economic power, the Federal Reserve (Heritage.org, 2008). Congress on the other hand is the legislative, or lawmaking, branch of our national government. It shares power with the president and the Supreme Court. The writers of the U.S. Constitution thought Congress was so important, they listed it first! Congress has two parts, the Senate and the House of Representatives (scholastic.com, 2015). Congress has the ability to help pass stimulus plans or assist in stopping inflation. Example of the stimulus plan, lowering interest rates, increasing government spending and quantitative easing, to name a few. To stop inflation, raise interest rates and decrease government spending...
Words: 633 - Pages: 3
...Macroeconomics Robert Kehr ECO372 June 6, 2013 James Harris Macroeconomics Giving a personal view on Gross domestic products (GDP), real, including, the unemployment rate, inflation rate and how interest rates are applied in America. Gross domestic product (GDP) GDP = Consumption + Investment + Government spending + Net exports. Economist measure growth as it changes within a country or in the case of the United States of America in a given year. The GPD information given is private consumption, or consumer spending in a nation’s economy. Given the nation’s imports and exports calculated will gives the nation’s monetary value for a time period calculated annually. Real GDP Real GPD = Nominal GPD over GPD deflator multiplied by 100. Real GPD is calculated by dividing the population. Even if the output is increasing the population may be growing faster given the real output may be decreasing. Nominal GDP GPD is calculated at existing prices. Nominal GPD is the GPD that has not been adjusted for inflation. The GPD can be higher than it actually is without adjustment of inflation Unemployment rate Unemployment is the percentage of people willing to work and able to work not working and people looking for employment. Number Unemployed over Labor Force multiplied by 100. This does not account for the underemployed that choose not to work or look for work. Inflation rate Inflation rate is the rise of prices in goods and services over a period of...
Words: 548 - Pages: 3
...International Trade and Finance ECO372 - Macroeconomics When there is a surplus brought into the United States there is excess of gross income over cost. Domestic and foreign businesses compete for sales in the country. Due to the standard of living production in most cases is cheaper overseas. It needs to be balanced in order to keep domestic businesses going and only allowing so much of an import into the country. With a surplus of an important product it can keep the price of goods down. The plus side to having a surplus of imports is it can generate jobs and create more work for citizens of the country. With cheap supplies means more room for companies to expand and grow. The United States imports billions of dollars of seafood each year. The fish are farm raised and come from China According to U.S. Department of Agriculture (2010). The fish being imported are catfish, salmon, shrimp and tilapia. Too much of the imported fish can drive the prices down for our very own commercial fisherman that raise and catch the seafood domestically. Imports can mean cheaper pricing for consumers in America because it is cheaper to raise the seafood in China than it is in the United States. International trade is good for a country and GDP. The surplus from the country’s exports versus imports will allow the country to import other products at a cheaper cost to the consumers. Consumer demand should increase because of the cheaper goods imported contributing to economic...
Words: 801 - Pages: 4
...Fundamentals of Macroeconomics ECO372 The business cycle is like a car, it must have several key components to operate and if one part fails it must be fixed to continue forward. The gross domestic product (GDP) is known as the price of all goods and services a country produces in a given time. It is equal to government spending, investments and consumer spending minus the value of imports. The GDP is part of the moving car, but it needs more to keep going. The real GDP is known as taking inflation and summing the total of a certain time period. It is the number reached by valuing the sum of all productive activity with countries borders. Purchasing powers can be seen because of the comparison within the year. Just because a product is selling for the same amount of money it doesn’t mean the company is making the same profit. There are many factors to consider when making a product and getting it from one place to another. The nominal GDP is a figure used without inflation making the GDP appears higher than it actually is. This can be confusing because a company could have made 10 Percent more this year but if inflation is gone up 3 percent it was actually 7 percent. The unemployment rate is the labor force divided by the number of unemployed workers who are able and willing to work, but just cannot find a paying job. The unemployment rate is not measured the same by different countries depending on situations. The inflation rate is known as the term used to describe...
Words: 718 - Pages: 3
...Fundamental of economics ECO372 week 2 Student’s Name Institutional attachment The purpose for this paper is to analyze the some of the macroeconomic scenarios that we always see or her in the business community. Firstly, we will look how the purchasing of groceries can have effect on the economy. Next, the paper will study how massive employ layoffs can cause ripple in the economy then lastly to examine the impact of decrease taxes. All these concepts will underline the fundamental importance of macroeconomic principle in the business society. Purchasing of groceries The demonstration of purchasing goods is impact by numerous elements in the business world. The sustenance we purchase from some foodstuffs were cultivated and transported in from a separation far from some staple goods. Each nation revels in distinctive benefits with regards to importation of produce from outside the nation along these lines making it more paramount to get to basic need item. At the point when a nation endeavors to create various sorts of goods items generally it would be less proficient and the cost and supplies would be influenced antagonistically. The interest of customers will dependably be high for some perishables items and the nation with high similar preference in the free global exchange will succeed. Gathering to extra layer to intricacy to buying staple goods is controlled by government. Government can force duty, amounts, administrative...
Words: 756 - Pages: 4
...Federal Reserve Bank Lovey Brown ECO/372 August 9, 2012 The United States, was economically influenced by both domestic and global events in 2011. The Japanese earthquake left a major fiscal effect on the world. Monetary situations of importance is the reason states have central banks. These banks act as the state's money directors. Purpose and Function of Money Money has a main purpose and function in the economic world. It functions as a regulation of well-known dealings for government systems. Monetary units can be calculated by the quality of the other forms of currency such as commodities. The economic value of each unit of measurement is normally discovered by the government of which it is settled. In the United States, the Federal Reserve controls the domestic monetary system policy. There are primarily two ways a central bank controls its state's monetary system policy. The Federal Reserve can allocate interest rates to banks acquiring money from the Central Bank. The Federal Reserve can also regulate and set the Federal Reserve obligation for banking organizations. Managing a Nation's Monetary System Without an organization that controls states’ money, there would not only be a diverse nation, and possibly open to improper growth. Our nation faced prevailing economic depressions in the 1800s because of the want of a domestic monetary control system. In 1913, Congress decided that it was necessary to proportion the fiscal...
Words: 516 - Pages: 3
...Fundamentals of Macroeconomics Paper Jeremy Noah ECO372 May 7, 2012 Watson Ragin Fundamentals of Macroeconomics Paper In the following, there will be a breakdown of different terms that are involved in the macroeconomic conversation. There will also be a few different examples that affect government, households, and businesses. An explanation of how each scenario affects these entities will be given as well. Economic Terms The first term that will be described is gross domestic product. This term takes a couple different actions and puts them into a final amount. When a country makes investments, exports goods, and imports goods, there will be a final amount of a positive amount or negative amount that comes back as profit or loss to it. Along with this amount, the entire private and public sector companies report their profits and losses and these numbers are figured into the gross domestic product figure. Real gross domestic product refers to a more inflated figure when it comes to an accurate number. Basically, normal gross domestic product refers to a base year such as 2010. If prices have gone up since then and someone is looking for a real gross domestic product number for 2012, then the adjustment for inflated prices will affect the normal gross domestic product number to accurately reflect the real amount. Nominal gross domestic product is the next term. This refers to the gross domestic product minus the inflation factor. This would mean that if the nominal...
Words: 997 - Pages: 4
...Fiscal Policy ECO372 August 14, 2012 Fiscal Policy Introduction Depending on whether a country is running a deficit, a surplus, or a debt, businesses and individuals are affected differently. “The most important budget in the world is that of the United States government. The U.S. budget impacts not only the United States of America but foreign investment, trade, and the economies of nations throughout the world.” (Boothe, 2003) The objective of this paper is to provide examples of how the United State’s deficits, surpluses, and debt affect individuals and business both domestically and internationally. Deficits, Surpluses and Debt; an Overview Summary measures of a budget are denoted by deficits and surpluses. Whereas a deficit is a shortfall of revenues under payments, a surplus is an excess of revenues over payments. Debt is accumulated deficits less accumulated surpluses (Colander, 2010). These summary measures indicate the health of an economy. This indicator helps both domestic and foreign companies determine if it is beneficial to invest in United States assets. Heading into the year 2000, the United States was running a surplus. This quickly changed as the government invested in The War on Terrorism, consumers changed spending habits, unemployment rose, and growth decreased. To increase the money supply, government implemented monetary policy and to get the economy moving again, implemented fiscal policies. These policies have wiped out the surpluses...
Words: 1065 - Pages: 5
