Interpreting Macroeconomic Conditions

In: Business and Management

Submitted By staylor
Words 1000
Pages 4
1







Interpreting Macroeconomic Conditions - Assignment 4

Managerial Economics and Globalization – ECO 550












Interpreting Macroeconomic Conditions 2

This assignment involves analyzing several indicators of the of the macroeconomic conditions in an economy, such as interest rates, income, and other indicators such as CPI, inventory levels, wage rates, consumer confidence, etc. Analyze these indicators and prepare a 3-4 page report explaining the expected short impact on firms in the following industries, retail business and automobile industries in terms of product sales and operating costs.

I feel it would be better served to explain exactly what macroeconomics means. Macroeconomics evaluates or examines the overall performance of the economy as a whole and in this process we can determine what causes the economy to grow and how indicators such as interest rates, income, wage rates, employment and unemployment can affect the overall performance of our economy in its current state as well as forecast predictions for the future. This type of activity and performance is often measured through the GDP (Gross Domestic Product); the total value of all goods and services in the market. This information can be applied to any firm/business to evaluate how these changes impact their product sales and operating costs in the United States.
If were to evaluate a local retail business in the Birmingham area, we could observe a company called Kirkland’s Home. Kirkland’s Home is a leading retailer that specializes in home décor. They were founded in 1966 in Jackson, Tennessee and have spread throughout thirty five states. Kirkland’s is among a few elite businesses that claim they are debt free; all revenue is in the black, never in the red.…...

Similar Documents

Macroeconomic

... factors affect GDP growth rate? • What need to be done to foster GDP growth? e.g. saving, investment, education, or exploit natural resources? -4 -6 2 9/26/2012 Why employment? • Employment is an macroeconomic indicator that are most directly felt by individuals. • Macroeconomic objective is high employment and low unemployment. • Unemployment rate: is the percentage of labor force that is unemployed. Why stable price level? • The most common measure of the overall price level is the consumer price index (CPI) • The CPI measure the cost of a fixed basket of goods (including shelter, food, clothing, and medical care) bought by average urban consumer. • Inflation rate is the rate of growth or decline in CPI Vietnam Inflation rate e.g. High inflation rates make people poorer, and people’s life become more difficult. High inflation rates erode people pension funds. e.g. low inflation rates shrink economic activities and raising unemployment. •Rapid price changes distort the economic decision of firms and individuals. Therefore, countries are looking for a golden rate of inflation, that allow a gentle upward creep of price as the best way of allowing the price system to function effectively. 3 9/26/2012 • Concerns of macroeconomics: 1. Why do national output and employment increase/decrease? 2. How can a nation increase the rate of economic growth? 3. What are the sources of inflation? How to control it? •......

Words: 887 - Pages: 4

Interpreting Macroeconomic Conditions

...1 Interpreting Macroeconomic Conditions - Assignment 4 Managerial Economics and Globalization – ECO 550 Interpreting Macroeconomic Conditions 2 This assignment involves analyzing several indicators of the of the macroeconomic conditions in an economy, such as interest rates, income, and other indicators such as CPI, inventory levels, wage rates, consumer confidence, etc. Analyze these indicators and prepare a 3-4 page report explaining the expected short impact on firms in the following industries, retail business and automobile industries in terms of product sales and operating costs. I feel it would be better served to explain exactly what macroeconomics means. Macroeconomics evaluates or examines the overall performance of the economy as a whole and in this process we can determine what causes the economy to grow and how indicators such as interest rates, income, wage rates, employment and unemployment can affect the overall performance of our economy in its current state as well as forecast predictions for the future. This type of activity and performance is often measured through the GDP (Gross Domestic Product); the total value of all goods and services in the market. This information can be applied to any firm/business to evaluate how these changes impact their product sales and operating costs in the United States. If were to evaluate a local retail...

Words: 1000 - Pages: 4

Nervous Condition

...Men In Nervous Conditions: An Ignored Matter The men of Zimbabwe struggled to assert the independence of their people against political, cultural and religious colonial pressure (Vembe), but reduced women to silent supporters (Stone 113). This dynamic still holds true on the literary front, where male writers of Zimbabwe, and Africa in general, present to the west male-centered, idealized pictures of traditional women and culture. Women, however, uncertain that men will revalue them, concern themselves with the pressures within the culture (McLeod). For this reason, the men of Africa generally discourage female authors from revealing their gritty perspectives. Further, E. Kim Stone writes, “Under colonialism, female storytellers were excluded from the few powerful positions the British system of colonization allowed in Rhodesia,” suggesting the traditional place of women as storytellers, somewhat ironically, was also suppressed by the colonizers. Only women are interested in revealing the internal pressures of postcolonial Zimbabwe. But these hidden pressures are just the ones that cause the “nervous conditions” in the book titled as such. A female character narrates this text about women, bearing to light women's struggles to be themselves within a constraining environment. But even as critics revel in this rare, realistic portrayal of Zimbabwean women, they seldom explore the significance of Tsitsi Dangarembga's representation of men, too often passing them off as flat...

Words: 4225 - Pages: 17

Macroeconomic Theory

...Macroeconomic Theory: Econ 2220 1 Math For Econ 2220 B 1 1.1 Shifts of a Curve vs. Movement along a Curve Parameter and variable y = f (x, a) (1) Suppose y is a function of x, and where a is a parameter, which represents the impact of other exogenous variables. Given a certain value of a, we can plot the function y = f (x, a) as a curve in a two-dimension graph. A change in x implies a movement along the curve, while a change in a means a shift of the curve. 1.2 An example Suppose the firm’s daily output, Y , depends on both the number of workers that the firm employs, N , and the number of machines that the firm uses, K. The relation between input and output is specified as the following, √ √ Y =2 K N (2) Output Y is a function of both the number of machines, K, and the number of workers, √ √ N . For example, if there are 100 machines and 4 workers, the output Y = 2 100 4 = 2 × 10 × 2 = 40. Now suppose we are concerned with the relation between output and the number of workers employed. That means that we hold the number of machines constant and study the relation between Y and N . Graphically, we plot Y against N , where N is on the horizontal axis. If we hold K constant at 100, the relation reduces to √ √ √ Y = 2 100 N = 20 N (3) It is shown as the solid curve in Figure 1. If the firm increases the number of workers employed from 4 to 9, the output would increase from 40 to 60. In the graph, the combination of Y and N moves along the solid...

Words: 2198 - Pages: 9

Macroeconomic

...MACROECONOMIC ANALYSIS ECON 545 Keller Graduate School of Management April 13, 2014 Introduction The idea Edgar has for opening up four new gas stations is based on a well based argument making it viable as a profitable business venture. The evaluation on the American consumer to accept the high price for gas oil prices forms the first approach towards establishing a business. Gasoil businesses in the world run as cartel where it supply and prices are determined by the few stakeholders in the industry. The stakeholders form an agreement among their competitors on the price, making and, marketing of the product (Fredy, 2010). The cartel though the production affects the GDP growth rate. Gross domestic product represents the monetary value of the goods produced in the country within a year. The enterprise runs as an oligopoly. An oligopoly represents a business type where there are few sellers in the market. The few sellers are due to the restriction imposed on entry to a monopoly. The production rights are restricted by the producer and the producer also controls the prices of the commodity (Brake, 2011). Unemployment will be apparent as the restriction holds down people with the relevant skills to join in the trade. Price control is done through price fixing and determining the market share. The market shares will go a long way to influencing international trade. International trade represents trade past the nation boundaries (Derik, 2010) . The main purpose of...

Words: 1229 - Pages: 5

Macroeconomic Factors

...Macroeconomic factors are large scale events or trends which affect the economy (for example recession and unemployment). Macroeconomic factors affect many things and are therefore closely monitored by governments, businesses and investors. Jamaica's economy faces many challenges to growth: high crime and corruption, large-scale unemployment and underemployment, and a debt-to-GDP ratio of about 140%. Government Fiscal Policy Gross Domestic Product - GDP The Jamaican economy is heavily dependent on services, which accounts for nearly 80% of GDP. The country continues to derive most of its foreign exchange from tourism, remittances, and bauxite/alumina. Remittances and tourism each account for 30% of GDP, while bauxite/alumina exports make up roughly 5% of GDP. The bauxite/alumina sector was most affected by the global downturn while the tourism industry and remittance flow remained resilient. Debt Management The attendant debt servicing cost consumes a large portion of the government's budget, limiting its ability to fund the critical infrastructure and social programs required to drive growth. Jamaica's economic growth rate in the recent past has been stagnant, averaging less than 1% per year for over 20 years. Jamaica's onerous public debt burden is largely the result of government bailouts to ailing sectors of the economy, most notably to the financial sector. In early 2010, the Jamaican Government initiated the Jamaica Debt Exchange to retire high-priced domestic...

Words: 580 - Pages: 3

Fin571 Interpreting Fiancial Results

...Interpreting Financial Results Lisa Edwin FIN/571 March 9, 2015 Arnold Harvey Interpreting Financial Results Businesses in the United States creates financial documents in order to explore how each part of the company is doing and in return make changes to any department that’s not doing well financially. For instance if accounts payable is high compared to previous years then it will determine that the company isn’t paying their debts. The comparison shows the failure and the success of the company. It also helps with improvements as well. Best Buy is one the world’s largest company in home improvement. Best Buy is heavily traded on the stock market along with its competitors such as Amazon. The question is has Best Buy maintained financial throughout the years? Let’s take a look at the various ratios and compare the last three years. A ratio is the method of finding the value of a company by comparing the book value of a firm to its market value (Investopedia.com, 2014). Market Value Ratios tells the equity of the business. The greater the ratio the greater the capital (Investopedia.com, 2014). ROE = Net Income + Net Sales + Total Assets Net Sales Total Assets Total Equity 2012 1,277M + 49,747M + 17,849M 0.03 + 2.79 + 2.45 = 5.27% 49,747M + 17,849M + 7,292M 2013 (1,231M) +50,705M + 16,005M 0.02 + 3.17 + 3.67 = 6.86% 50,705M + 16,005M + 4,366M 2014 (441M) + 39,827M + 16,787M .011 + 2.37 + 4.52 = 6.90...

Words: 412 - Pages: 2

Condition Monitoring

...MOM350 CONDITION MONITORING AND MANAGEMENT PROJECT 2 – SPRING 2013 LINN WETTELAND STUD.NR 204592 “USING FAULT TREES TO DETERMINE THE ROOT CAUSE OF ROTATING EQUIPMENT FAILURES” (Robert X. Perez) In the paper “Using fault trees to determine the root cause of rotating equipment failures”, the author, Robert X Perez, explains through his own experience as a senior reliability engineer at Citgo Petroleum Corporation, and through examples of various events in different systems the importance of finding the root cause(s) of failures in rotating equipment. The author explains these “major failures causing significant undesired events are the result of a series of events, and compares it to the reaction of a domino line being tipped over by a single domino chip. And studying chain of event, or probable scenarios is at the heart of RFCA’s” (Perez) The author focuses on FTA (Fault tree analysis) as a tool to determine such root causes. And gives examples of cases where use of these tools could have OR have prevented multiple damages due to one component failure causing failure in surrounding components. RCFA – Root Cause Failure analysis “Root Cause Failure analysis is a structured process to identify any physical, human and latent causes of undesirable event(s).And how such a process can be used in achieving continuous plant reliability improvements by targeting mechanical and organizational deficiencies in a process facility” (Perez). A tool for “Identification and...

Words: 1529 - Pages: 7

Interpreting Macroeconomic Conditions

... macroeconomic variables. A business cycle is not a regular, predictable, or repeating phenomenon like the swing of the pendulum of a clock. Its timing is random and, to a large degrees, unpredictable. A business cycle is identified as a sequence of four phases: •Contraction: A slowdown in the pace of economic activity •The lower turning point of a business cycle, where a contraction turns into an expansion •Expansion: A speedup in the pace of economic activity •Peak: The upper turning of a business cycle In general from these numbers we can say the economy is in contraction. In Europe seems to have a little of the lower turning point. The World Bank has predicted a global growth of 3.3% for 2011. Europe’s debt crisis is a huge factor which could derail any global recovery. The European Central Bank has asserted that inflation may be around for months in Europe which would probably require a European interest rate hike which would make borrowing from global banks tougher than it already is. However, major companies are lean and mean now and sitting on trillions of dollars of cash. In addition to inflation and a debt crisis, the 17 member European nation is still facing 10% unemployment which was after a recent drop. Also, housing prices continue to drop in Europe although it appears that it has bottomed out. Is America’s dominance in capitalism clearly over? I would say no since nothing is clear right now with global economies, global financial...

Words: 1546 - Pages: 7

Macroeconomic

...Macroeconomic Picture of Agriculture sector in Indian Economy Theodore Schultz began his acceptance speech for the 1979 Nobel Prize in Economics observing: “Most of the people in the world are poor, so if we knew the economics of being poor we would know much of the economics that really matters. Most of the world's poor people earn their living from agriculture, so if we knew the economics of agriculture we would know much of the economics of being poor” (Shultz, 1979). Existing empirical evidence on the impact of macroeconomic variables on agriculture remains mixed and inconclusive. This paper re-examines the dynamic relationship between monetary policy variables and agricultural prices using alternative vector auto regression (VAR) type model specifications. Directed acyclic graph theory is proposed as an alternative modeling approach to supplement existing modeling methods. Similar to results in other studies, this study Â’s findings show that over the time period analyzed (1975–2000), changes to money supply as a monetary policy tool had little or no impact on agricultural prices. The primary macroeconomic policy instrument that affects agricultural prices is the exchange rate, which is shown to be directly linked to interest rate, a source of monetary policy shock. The Transmission of Exchange Rate Changes to Agricultural Prices (July 2009) provides empirical evidence that price and exchange rate transmission for agricultural products is low in most...

Words: 670 - Pages: 3

Condition 8503

...If condition 8503 appears on the last visa you held since entering Australia you cannot make a valid application for the visa within Australia. Condition 8503 may be waived in rare circumstances. More information on seeking a waiver of condition 8503 is contained in IARC’s Condition 8503 – no further stay information sheet. It is important that you seek advice from a registered migration agent in relation to this. Have you had a visa refused or cancelled? Since 14 September 2009, if you have had a visa refused or cancelled since you last came into Australia you may still be able to apply for this visa. However, you must: • submit both form 47SP (completed, signed and dated by you as the applicant) and 40SP (completed, signed and dated by your partner) • submit 2 statutory declarations dated no later than 6 weeks prior with the application from – each statutory declaration must declare that you and your partner are in a married relationship and must be made by an Australian citizen, Australian permanent resident or eligible New Zealand citizen (see form 888) • not have previously been refused a Spouse, Partner or Interdependency visa since last entering Australia, and • not have had your visa refused or cancelled on character grounds. In addition, if you do not hold a substantive visa (eg you are unlawful or hold a bridging visa) then you must meet the requirements set out below. IMPORTANT! If you do not hold a substantive visa When can unlawful non-citizens......

Words: 382 - Pages: 2

Interpreting Italians

...Interpreting Italians by Jeffrey Bailey Jeffrey Bailey gained the motivation to write his book “Interpreting Italians” since his first visit to Rome in Italy when he was studying Language center in France. That is when he said to himself, “This is where I want to be”. Jeffrey was later adopted by and Italian family, and continued his studies in Italy. The son of this family was a photographer, and cover picture of Jeffrey’s book “Interpreting Italians” was on of his pictures taken. In 2003, Jeffrey went back to Rome, as he knows many things about Italy and its people by then, one of his Friends, Tom; suggested to him to write a book. However; Jeffrey was not sure about that. Later in 2007, he finally decided to write his book, based on his long-term interests. Most of his ideas were written just in draft, and the book has a working title back then, which is “ Italian rhythm” The author has choose a specific target audience for his book, this audience can be people like him, people who are more curious about Italy, therefore, his book can be of their help, as they put them in the wanted environment. Jeffrey said that being an outsider was much of a help to his book, as he had seen things that Italians may never had paid attention to in Italy. As a result, he had some personal characteristics he wanted to address in his book along with casual ones. Interpreting Italians consists of a series of essays on historical, political and cultural topics that have had a...

Words: 412 - Pages: 2

Macroeconomic Terms

...------------------------------------------------- University of Phoenix Material Macroeconomic Terms Define the following terms in your words. Term | Definition | Definition Source | Gross Domestic Product (GDP) | GDP is the total market value of all goods and services produced within an economy in a one year period. | | Real GDP | Real GDP is the total amount of goods and services produced, adjusted for price level changes. | | Nominal GDP | When the current prices are used to measure the amount of goods or services. | | Unemployment rate | The unemployment rate is the amount of individuals in a society that are not working. It can be calculated by dividing the unemployed individuals by the amount of people actually in the labor force then multiply by 100. | | Inflation rate | The measurement of how fast money loses its value. Measures the prices of items and services increases over a period of time.Inflation may happen when too much money is printed or important or necessary expenses increase in price. | | Fiscal Policy | Government policies that are related to interest rates, taxes and how much people spend. Affects economic variables such as tax rates, interest rates, and government programs that influence prices. | | Monetary Policy | The actions the Board of Governors of the Federal Reserve System make in order to influence the money supply and interest rates. | | Aggregate Demand (AD) Curve | “A demand curve is the graphic...

Words: 418 - Pages: 2

Interpreting Financial Ratios

...Week 8 – CheckPoint – Interpreting Financial Ratios Problem 6.2 Upon review of Luna Lighting’s financial ratios there are a few items that indicate their inability to improve profitability. Their fixed asset turnover and total asset turnover ratios are down. These are two approaches to assess management’s effectiveness in generating sales from investment of assets. The fact that these ratios are lower that prior year means that more investment is required in the generation of sales. The gross profit margin, operating profit margin, and net profit margin, represent the firm’s ability to translate sales dollars into profits. Although the gross profit margin stayed the same, the operating profit margin declined almost a full point. The operating profit margin is a measure of the overall operating efficiency incorporating all of the expenses associated with normal business activities. The net profit margin was down most likely due to the operating profit margin decline. The last indicators are the return on assets and return on equity. Both of these ratios dropped considerably. These two ratios measure the overall efficiency of the firm in managing it’s total investment in assets and in generating return to shareholders. The return on assets indicates the amount of profit earned relative to the level of investment in total assets was low. For Luna Lighting this number dropped a point and a half from the previous......

Words: 286 - Pages: 2

Interpreting Macroeconomic Conditions.

...Interpreting Macroeconomic Conditions. Walmart Stock Performance During the 1970’s, Walmart offered common stock to the public. The stock was traded on New York Stock Exchange. The first cash dividend was declared. Shareholders were provided an annual dividend and paid quarterly every year (http://investors.walmartstores.com/ phoenix.zhtml? c). In 1970, Walmart offered 300,000 shares of its common stock to the public at a price of $16.50 per share. Since that time, Walmart have had eleven two for one stock splits. On a purchase of 100 shares at $16.50 per share on their first offering, the number of shares has increased. In March 1974, Walmart declared its first cash dividend of $0.05 per share. Walmart has increased its dividend every year since its first dividend (http://investors.walmartstores.com/ phoenix.zhtml?c). Walmart Current and Future Sales Revenue According to all the data that has been evaluated, Walmart is the largest retailer in the world. By the end of January 2010, Wal-Mart had more than $400 billion in revenue, $24 billion in operating income, about 8,500 stores, and nearly 1 billion square feet of space. According to statistics from the U.S. Census Bureau, about 10% and 20% total of retail and grocery sales in the US. The company controls the US retail surroundings and is growing globally at a fast pace. The company recorded revenues of $408.214 million during the financial...

Words: 1253 - Pages: 6