...creates an impact on taxpayers, social security and Medicare users, unemployed workers, and students. These issues also affect the countries financial reputation, exports, imports and the Gross Domestic Product (GDP). The U.S. economy is experiencing a budget deficit and outstanding debt, and the outlook is not good for taxpayers. If these two items do not get under control, future generations will be left to pick up the pieces and will have to try to find a way to maintain and control the budget. Taxpayers Taxpayers are the people that pay and contribute to state revenue. Government deficits affect taxpayers by increasing taxes and interest. "Inflation also affects the deficits by affecting the size of social security payments, federal pension payments, and interest on the federal debt. The deficit and surplus are sensitive to the business cycle" (Deficits, Surpluses, And Debt, 2015). "If the government use surplus it would "give tax cuts to taxpayers, increase income transfers, pay down national debt and spend it on goods and services" (Deficits, Surpluses, And Debt, 2015). Future Social Security and Medicare users The Social Security program began in 1935 and benefits have always been paid on time, even with modified laws over the years. Benefits are expected to continue to be paid on time through 2037 when the reserves disappear, and taxes will only cover 76 percent of the scheduled benefits. At that point, Congress will need to change the laws once again to secure the...
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...of the unemployed to more than 4 million, according to National Statistics Institute (INE) figures released on April 24. Spanish Economy Minister Elena Salgado said that the first quarter of 2009 will be the worst in terms of increasing unemployment. The International Monetary Fund (IMF) predicts that unemployment in Spain will reach 17.7 percent in 2009 and 19.3 percent in 2010, but the INE figures seem to indicate that unemployment could exceed 20 percent by the end of 2009. Of all the European countries, Spain has in many ways been one of the most gravely affected by the global economic crisis. Even without the global recession, Spain would most likely be undergoing a correction this year due to its extremely overheated housing market. But it is facing a severe housing market correction, an industrial slump, and a banking crisis caused by the housing correction and the recession's overall effects -- simultaneously. These three ingredients make for one bitter stew. As the first large Western European country to be severely tested by the crisis, Spain can serve as a case study for the other European economies, foreshadowing the troubled road ahead for much of Western Europe. The Beginning: The Euro and the Housing Boom Spain's trouble has its origins in one of the most fundamental challenges facing...
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...International Economics The German Economy 10th of December 2015 Groupmembers: Con Brunissandre Baitzouroff Pawel Fedko Ha Pham Thai 1 Morenikeji Aina-Badejo Atiwat Hongupathamchai Table of Contents 1. Introduction………………………………………………………………………………..…….. 4 2. The Structure of German Economy…………………………………………………….. 5 2.1 Import, Export and Trading Partners…………………………………………………………….. 5 2.2 Germany’s Main Economic Sector – The Automotive Industry…………………….. 8 3. The Global Financial Crisis and its effects on Germany……………………….. 9 3.1 What are the origins of the 2008 financial crisis?............................................. 9 3.2 The financial crisis plunged Germany in an economic crisis………………………….11 3.3 Government’s Action to Combat Crisis ………………………………………………………. 16 4. Future Challenges and Outlook for Germany…………………………………...19 5. Conclusion……………………………………………………………………………………….21 6. References……………………………………………………………………………………….22 2 Executive Summary This report provides a concise summary of Germany’s main economic features. It starts off by describing the key sectors and trade patterns that make up German economy. From there, it will further examine how one of the strongest economy in the world was affected by the global financial crisis in 2009, and critically analyze the extensive use of policies used by the German government to counter the crisis. The report will conclude by looking at Germany’s long term key challenges and the prospect...
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...General Motors and the Auto Industry: A Strategic Analysis Drexel University Management 450 5/21/2009 Helena Boe, Diane Ketler, Nicole O’Keefe, Andrew Rubenstein, James Siverio Table of Contents Executive Summary 3 A Snapshot of General Motors Today 4 The Strategic Issue Facing GM: Avoiding Bankruptcy 5 The Economy Today 6 History of the recession 6 Economic Climate 7 Stimulus Package 7 Gross Domestic product 8 Inflation Rate 8 Unemployment Rate 8 The Auto Industry Today 9 GM’s Strategy 11 Threats Affecting GM 12 Threat of Rivalry 12 Threat of suppliers 14 Economic Threats 16 Threat of Substitutes 17 Threat of Buyers 18 Threat of Entry 20 Weakness of Internal Cost Structures 21 Government Intervention and the Restructuring of GM 22 GM’s Outlook/Recommendations 23 Works Cited 25 Executive Summary General Motors (GM) is one of the big three auto makers of the world (GM, Ford, and Chrysler) and has historically been the largest and most successful. They have built some of the most famous and classic vehicles on the road which have portrayed messages of both modesty and display of class for a market of consumers who range from working class to music superstar; as Alfred P. Sloan, CEO of the 1920s put it, GM makes “a car for every purse and purpose.” In recent years however, GM has taken an unexpected turn for the worse due to the changing economic climate that is affecting the world. Many economists argue that the US has been pushed into a...
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...The purpose of this analysis is to obtain an improved understanding of “The Great Moderation”, its causes and effects as well as the end of an economic cycle. Additionally, the information gathered can be used to better understand how and why “The Great Moderation” is no longer a valid method of the business cycle. The global economy as well as international markets stand to surge or fall according to the ebb and flow in the market or the business or economic cycles. According to Diego Comin, (2012), the Great Moderation can be defined as “a decline in aggregate volatility”. If a business cycle or quickly engineered spending policies are implemented revolving around political motives we can realize an increase in the margin of error (Hammond, J.D., 2011). The volatility of today’s global markets is growing at an alarming rate, even more so than during the great depression suffered by America in the later 1920’s and early 1930s. Beginning in 2007 the United States began seeing the effects of the end of a business cycle or “The Great Moderation coming to a close. For years, Americans have seen prominent growth cycles with limited down turns or troughs which culminated into a very strong world market. Todd Clark, (2011) explains that, “most recently, the severity of the recession that started in late 2007 has led some observers to conclude the Great Moderation is over.” There were many contributing factors revolving around the 2007 recession in America. For example, the...
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...US Financial Crisis US Financial Crisis This paper aims to describe the US Financial Crisis in terms of causes, impact, and remedial actions taken by the public and private sectors. It presents the thesis that the financial crisis is also a crisis of values that prompts a reevaluation of the premises of American capitalism. In particular, that prosperity is the foundation of peace and order. A review of literature provides the basis for a short commentary on the subject. Preliminary review of literature on the subject brings to fore some distinct patterns in consumer and investors behavior that make them peculiarly venerable. First is the tendency of investors to join the bandwagon of speculative investment and of putting their money where others put theirs. Second is an apparent lack of understanding on the relationship between risk and returns. Third is an apparent lack of appreciation for the principles of supply and demand. The principle states that excessive supply will reduce the price and demand for a product to the advantage of the buyer, while a lack of supply will increase demand and price of a product to the advantage of the seller. Causes Economists stress the importance of tracing the root causes of the financial crisis in order to provide a systemic solution to the present financial crisis. Most references present the cause of the financial crisis to be the “subprime mortgages.” However, subprime mortgages by itself did not cause the housing bubble...
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...Financial Outcome: Ford Motor Company University of Phoenix FIN 419 Brenda Jaber Financial Outcome of Ford Motor Company Ford Motor Company is an American legend and icon for the automotive industry. Ford’s story is one of hard work, determination, and the American Dream. The company was founded in 1903, by Henry Ford. In 1908 the company introduced the model T and by 1937 had sold more than 25,000,000 automobiles. Ford also halted production from 1941-1945 in order to build B-52 Bombers and assist the government with World War II (Davis, 2003). Ford has enjoyed being the number one American automaker on numerous occasions and has also had its share of struggles. In 2009, Ford narrowly avoided bankruptcy and had to restructure. So far, the Ford Company has been the only American automaker to not file bankruptcy in 2009. With the restructure, the company has begun developing the kind of technology that consumers will want to buy. Ford is becoming “greener” with their eco boost technology and is improving its gas mileage, in part because of the government’s new standards on fuel economy. In addition, Ford is also utilizing new technology that is available on select 2010 models such as “Parallel parking assistant,” which will parallel park the car for a person (Ford Story, 2009). The company will have to remain competitive and innovative to survive. In this paper, a financial initiative from the management’s message to the shareholders will be developed. From the financial...
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...music you listen to were all created by someone else. If you produced everything on your own, you would have little access to medical and dental care. These items are a part of everyday life and would not be available if not for markets and business. For-profit and nonprofit organizations play important roles in the economy. For-profit organizations produce goods and services, and provide employment with the primary goal of generating financial gain, whereas nonprofits are not in the businesses of financial goal. They employ people, take in revenue, and provide goods and services with the fundamental goal of serving humanitarian or environmental needs. For-profit organizations help raise the standard of living through taxes, which the government spends for providing the facilities to the people, and for the well-being of...
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...Resource Allocation A number of factors inhibit effective resource allocation Overprotection of resources, Too great an emphasis on short-term financial criteria, Organizational politics, Vague strategy targets, A reluctance to take risks, and A lack of sufficient knowledge In Japan, some Japanese manufacturing firms, such as Honda and Toyota, have renewed attention back to the importance of cost reduction. They have accumulated this reduction from existing products that will give them more productivity and growth. Strategy Implementation Action Agenda What to do now versus later? What requires much time and personal attention? What can be delegated to others? The insurance industry is undergoing changes that are impacting the types of products created and the business processes required for daily operations. Offers of new services and new distribution systems are driving insurance providers to seek alternate methods to conduct business, as well as innovative technology and a re-engineering of traditional business processes. The expansion and globalization of current products that can exceed expectations and can grow too fast giving rise to several challenges. Managerial Components of Implementing Strategy Strategic leadership to drive implementation forward Shape work environment and corporate culture to fit strategy Setting up appropriate award/incentive systems to...
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...industrial products of our life. It is used from power cables to safety pin. In tools, military weapons, making our homes and so and so on. Steel industry is considered backbone of industrial growth. Its sustained growth is vital given the cascading impact it has on the economic development in many sectors such as oil and gas, electrical and electronics, transport, shipbuilding, building and construction, fabrication, machinery and equipment as well as the national trade balance 2. Overview Malaysian steel industry contributes ~ 4% to the economy, employing ~150,000 people •There’s a ~ 22.4 MTA demand in ASEAN - 18.3 MTA for flat products. •A fully developed steel industry could contribute up to ~6.5% to the Malaysian economy by 2020. •Malaysia steel demand is the 4th largest in ASEAN (Thailand, Viet Nam, Indonesia) and growing at 6% for past 20 years. MITI presentation, SECOND NATIONAL MARINE INDUSTRIES FORUM 2012 (2NMIF) Production: Losses: The Economic Transformation Programme (ETP) initiated by the Malaysian Government has begun to show some positive results. As the ETP is rolled out in stages, the significant impact on steel demand will not be shown until after the full implementation of all these infrastructure and construction projects. However, the Economic Stimulus measures put in place by the Malaysian Government during the global financial crisis continued to stabilise the economy, helping businesses in the country to recover from the downturn. The Group...
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...risk, market risk, distribution and supply chain risk, physical and environmental risk, social and cultural risk, and cyber-risk or technological risk. Political, Legal, and Regulatory Risks Politically, China faces some stability issues. China has a Communist government. In many cases, this regime has led to stability that has helped the country reach the more recent levels of economic improvement, despite some notable discontent among its people (Cai & Li, 2009). However, since reaching a more prosperous economy China has been at odds with itself. Balancing its communistic central government with capitalistic economic centers has been unsuccessful. Additionally, the development of the nation has led to a large disparity between the classes with some rural regions looking as they did decades ago whereas urban centers rival New York and Tokyo in excess (AMBest Co Inc., 2011). This generates a lack of trust in smaller regional centers and towns that threatens to create instability in China (Ke & Zhang, 2003). Political, Legal, and Regulatory Risks Management Companies that have plans of investing, operating or partnering with Chinese company must understand the political process of a Communist government and seek legal and regulatory advice from company, which currently operate in this region. Avoiding legal problems is the best option when conducting business outside of the...
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...The Great Moderation—Dead or Alive? Yolanda Rivera MBA6008 Global Economic Environment Abstract The purpose of this paper is to analyze and critique the Harvard Business Review article, “The Great Moderation” written by Diego Comin. I will discuss its causes and effects as well as the end of an economic cycle. Additionally, the information gathered can be used to better understand how and why “The Great Moderation” is no longer a valid method of the business cycle. According to Diego Comin, (2012), the Great Moderation can be defined as “a decline in aggregate volatility”. If a business cycle or quickly engineered spending policies are implemented revolving around political motives we can realize an increase in the margin of error (Hammond, J.D., 2011). The volatility of today’s global markets is growing at an alarming rate, even more so than during the great depression suffered by America in early 1930s. Beginning in 2007, the United States began seeing the effects of the end of a business cycle or “The Great Moderation coming to a close. For years, we have seen prominent growth cycles with limited down turns which reached a climax into a very strong world market. Todd Clark, (2011) explains that, “most recently, the severity of the recession that started in late 2007 has led some observers to conclude the Great Moderation is over.” There were many contributing factors revolving around the 2007 recession in America. For example, the growth of the housing bubble; the...
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...fact that the US economy has been going through a recession, a working knowledge of this economic was crucial to our success. Our initial strategy revolved around timing trades based on daily market performance and expectations using daily market news and reports. While this strategy was successful to an extent, our group soon focused on diversifying our portfolio, not just through the quantity of equity held, but also by using correlations between firms. Our group began investing in many technology firms as well as some communications firms and futures. An industry analysis of these industries will be given as most of our stocks were held in these areas. Since there are technological advances almost daily, we felt the technology industry could be very promising. The automotive industry was also important due to Toyota’s recall and we quickly learned just how volatile the futures market could be. Portfolio statistics will also be given and a comparison of the NASDAQ Composite Index and our portfolio will be given. In the end, our final strategy consisted of diversifying our portfolio, using daily market news and expectations and by paying close attention to the futures market. Economic Conditions US Economic Analysis The U.S. economy is currently going through an economic recession that has been proceeding since the middle of 2008, which has contributed in producing a global economic downturn; this outcome transpired from a number of factors including the sub-prime mortgage...
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...Summary The automobile industry, a key sector in China’s industrialization and modernization efforts, has been developing rapidly since the 1990s. In recent years, China has become the world’s largest automotive producer, with annual vehicle output of over 18 million units in 2011. China is now also the world’s biggest market for automobile sales. Meanwhile, China’s auto sector development and policies have caused concerns in the United States, from automotive trade, China’s failure to effectively enforce trade agreements and laws, to market barriers and government policies that increasingly favor Chinese manufacturers, which could affect business operations and prospects of international companies doing business in (or with) China. China’s auto industry has developed extensively through foreign direct investment, which has come in the form of alliances and joint ventures between international automobile manufacturers and Chinese partners. These international automobile manufacturers, who generally dominate the higher end of the Chinese market, have focused on making cars for China’s large and fastgrowing market. The domestic Chinese automakers, who occupy the lower end of the market, struggle to improve design and quality to expand sales overseas. China exports and imports relatively few vehicles. Most of the cars produced in China stay in China and its vehicle exports are mostly light trucks and passenger cars shipped to developing country markets. Automotive trade between the United...
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...to boom the prices of houses increased. Many people felt a false sense of security in the value and asset of owning a home could offset the failing stock market. Banks began to repackage these loans into collateralized debt obligations and sold them out to other financial institutions creating complex chains of debts. As the interest rates increased as planed the risks began to unravel. By 2006 many borrowers were defaulting on mortgages they could no longer afford to sustain and the housing market began to decline. In 2007 feeling the financial effects of the bad loans; many institutions were showing hundreds of millions in losses and expecting more each day as more people defaulted on their loans. It was at that point the public panicked realizing that the economy was spiraling with no hope of recovery. Banks came to a financial halt and many began filing for bankruptcy.(Singh). With no other options available the Federal government was forced to step in and began devising a plan of both conventional and unconventional methods to repair the economy. The Obama administration reacted quickly within the first few months to push through several pieces of legislation to aid the crisis. The first piece of legislation was the American...
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