...Introduction Government spending has been an instrumental component and reflection for the United States economy. As an integral part of the business cycle, the last several years have been through the trough since the recession in 2008. While government spending has been increasing, for a couple years it did reduce in addition to maintaining a steady quantity of spending up until the past few years of recovering and growth. As a result, there has been a steady increase of spending in the past three, with anticipation of greater spending in the years ahead. While the overall amount of spending has been increasing as a result of a stronger economy, there has been a surplus of oil and petroleum drilling. Given the lower demand for drilling, the oil and petroleum industry has been greatly affected with Exxon Mobil reporting lower profits, and BP has been reporting a loss, with anticipation of mass layoffs ahead. (Krauss, 2016) Fiscal Policy, Tax Rates, and the Economy Roughly 35-36% of our total government spending accounts for the gross domestic product (GDP). After the government bailout funding for banking and stimulating the economy with an additional $700B after 2008, over 42% of the annual GDP was of government spending. Federal income tax hovering between 16.8-17.2% for median class income has been consistent for the past several years. “Today's government spending levels are indeed too high, at least relative to the average level of tax revenue the government has generated...
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...Fundamentals of Macroeconomics paper ECO 372 January 20, 2014 Fundamentals of Macroeconomics paper In this assignment we have been asked to dive into the fundamentals of macroeconomics. Macroeconomics looks at the economy and attempts to answers the questions such as economy to growth over time, short-run fluctuations in the economy, and performance issues. In order to understand and answer these questions one must first understand the fundamentals and the components that drive the economy. Throughout this paper we will describe the fundamentals that make our economy; these fundamentals are Gross Domestic Product (GDP), Real GDP, Nominal GDP, Unemployment rate, Inflation rate, and Interest rate. The gross domestic product or GDP, measures countries output of all goods and services that are produced in the country (Amadeo, 2014). The factors of the gross domestic product are personal consumption expenditures plus business investments plus government spending plus exports minus imports (Amadeo, 2014). After one understands the factors of the gross domestic product it is easy to calculate the gross domestic product if one fallows this simple formula C + I +G+ ( X – M ) (Amadeo, 2014). The next component is the Real GDP. The Real GDP is a measurement of the economic output of a country minus inflation. This allows a person to evaluate the economy's production for each quarter more accurately (Amadeo, 2014). By doing this a person can tell if more product is being produced...
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...the discretionary spending of the United States, which has grown by at least 40% since 2002 (heritage.org). A key reason as to why the Budget Control Act mainly targets discretionary spending is because it is viewed as being a more flexible fiscal tool than mandatory spending. Discretionary spending covers costs such as federal and military wages and salaries, the purchase and development of public assets, education programs, transportation maintenance and development, etc. To summarize, the Budget Control Act establishes caps on discretionary spending through 2021, as an attempt to reduce the national deficit by more than $2.5 trillion. In 2011, Congress passed a law saying that if the parties cannot agree on methods to cut spending, about $1 trillion in automatic, arbitrary cuts would begin in 2013 (whitehouse.gov). The proposed cuts include a fixed 2% per year decrease of Medicare, cutting non-defense spending such as education by 7.8% in 2013 to 5.5% in 2021, and reducing defense spending to a total of $454 billion (Congressional Budget Office). In FY 2013, military spending accounted for 56.94% of discretionary spending (City Data). That astoundingly large fraction, coupled with the current administration’s shift towards a more hands-off foreign policy, and a survey that shows that 37% of Americans think the government is spending too much on defense, has unsurprisingly steered the government towards attempting to reviewing national defense spending (Gallup). There...
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...the various types of indicators are classified by timing or direction in relation to business cycles. Because of the vast amount of data available, it is important to understand which one are necessary for a particular study; indicators are only helpful if they are used or interpreted correctly. This paper will list some ofthe top reports used in a business analyst, discuss its relevance in decision-making and the economy. GDP One of the most common indicators is the Gross Domestic Product (GDP). It is the primary measure of a nation’s performance; peruses annual total outputs of goods and services (McConnell, Brue & Flynn, 2009).To measure GDP all of the spending on final goods and services are summed upevery quarter or year. The items include personal consumption, gross private domestic investments, government purchases, and net exports (McConnell, Brue & Flynn, 2009).GDP is a goodestimator for profit growth and in determining the expected rate of return on capital.The Federal Reserve uses the data to adjust monetary policies. For example,the Federal Reserve reduced the federal fund rates to nearly zero percent, and implemented different programs to support the liquidity of banks to aid in improving...
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...if a higher growth rate of GDP meant that a higher percentage was spent in the public sector. Data was gathered from the ECLAC, The World Bank and also the International Monetary Fund. Introduction The reason I was very attracted in this research is because as someone born in South America and lately Latin America has been doing better than before, and visiting South America the past year I have seen how infrastructure has improved lately so I was very interested in seeing how big of a role public expenditure plays in countries that are developing. Expenditure on welfare, health and education are an essential part of what governments do to enhance the quality of life of their citizens and the human capital base of their societies. My focus on public and social expenditure in Latin America is mainly guided by the concern of how Governments utilizes existing policies and seeing how these theories and policies have helped increase Latin America’s GDP. In Latin America we find a great variation in social policy regimes; ranging from Uruguay and Argentina, where a large majority of the population is covered by social policy and has decent education and health services, to El Salvador and Guatemala, where social policy and quality of education and health services does not have a big reach or covers the majority of the population. Public expenditure is and has been very important for the economies of every country because, it has a big role in the determination of level...
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...Phase 2 IP Assignment David Bailey ECON 210 12/1/2014 Richard Fendler Phase 2 IP Assignment Part I Assume that Country A has a population of 500,000 and only produces 1 good: cars. Country A produces 100,000 cars per year. The people in Country A purchase 90,000 cars, but there are not enough cars to fulfill all the demand. They decide to import 50,000 more. The government buys 25,000 cars for its police force, and 10,000 cars are bought by companies to transport employees to other locations to work. They also export 65,000 cars to nearby countries for sale. Discuss the following (for all three of these questions, merely record your numerical answers). 1. What is Country A’s GDP? GDP = C + I + G + (X - M) G=25,000 C=90,000 I=10,000 X=65,000 M=50,000 GDP= 90,000+10,000+25,000+(65,000-50,000) GDP= 125,000+ (15,000) GDP= $140,000 2. What is the composition of GDP by percentage? 3. What is the GDP per capita? GDP per Capita= GDP/ Population a. GDP Per Capita = 140,000/500,000 b. GDP Per Capita= .28 Part II Go to the Bureau of Economic Analysis at this Web site (http://bea.gov/newsreleases/national/gdp/gdpnewsrelease.htm), and look up the latest new release for real GDP. Address the following questions after reading the latest release: 1. What is the real GDP today? 3.9% 2. What is the largest component of GDP? Consumption 3.What is the smallest component...
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...Fundamentals of Macroeconomics Paper Brainard C. Simpson II ECO 372 September 29, 2014 Paul Updike Fundamentals of Macroeconomics Paper Every country measures its overall economic health by measuring GDP (Gross Domestic Product). It represents the total dollar value of all goods and services produced over a specific time period. The income approach, which is sometimes referred to as GDP (I), is calculated by adding up total compensation to employees, gross profits for incorporated and non incorporated firms, and taxes minus any subsidies. The expenditure method is the more common approach and is calculated by adding total consumption, investment, government spending and net exports. This paper will focus on this approach highlighting the three specific variables that effect GDP, households (buying groceries), business (massive layoffs), and government (decrease in taxes). All of these inputs have an effect on a nation GDP. I will illustrate how all these inputs affect GDP directly, and how they are interrelated. Households Every household plays a role in the measure of GDP. A household represents the purchasing power of the individual. The more disposable income in a household, the more they can spend, which in turn stimulates the economy. Buying groceries is the simplest measure of disposable income. Grocery purchasing is important to GDP because the state of the economy will determine how much a family would be able to purchase from the local grocery store. If there...
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...government’s way of stimulating or slowing down the economy. Actions taken by the government can slow growth if things are moving too fast or stimulate growth if the economy is in a lull. Walmart, a major retailer in the United States, is one of the many organizations that are influenced by fiscal policies. Tax rates and spending can affect the organization’s ability to sell goods and services as well as create jobs for the economy. Based on fiscal policies implemented and economic predictions, there are a few recommendations that can be made to Walmart in order to positively influence the economy and their business. Federal Government Spending Fiscal policy is changes in government spending and taxes in order to influence the economy in some way. It works by changing the level or composition of aggregate demand (AD). Government spending in the United States has steadily increased from 7% of GDP in 1902 to almost 40% today (Chantrill, 2015). A decent amount of federal spending has gone for health care, education, pensions, and welfare programs. Defense spending in the United States has fluctuated in the last century, rising from 1% of GDP, peaking at 41% in World War II, declining from 10 percent in the Cold War to five percent today (Chantrill, 2015). Government spending on education has expanded from about one percent of GDP in 1900 to peak at 6 percent in the second decade of the 21st century. Government did not intervene significantly in the provision of health care until the...
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...Technological * Government spending on research and development In the aftermath of the economic crisis that began in 2009, the governments in many countries averted this threat.6 The significant drop of private R&D in these countries was efficiently offset by government R&D investments in 2010 and 2011.7 Still, the stabilization or fall of government R&D budgets in advanced countries, the slowdown in emerging markets, and the decreased appetite of business investment have slowed the advance of innovation combined global private and public R&D expenditure followed a path of constant growth, Gross domestic expenditures on R&D (GERD) in the high-income economies of the Organisation for Economic Co-operation and Development (OECD) increased The worldwide recovery of business enterprise expenditure on R&D (BERD) was quick Two main policy strands form the core of present innovation policy. On the one hand, there is a need to improve the framework conditions for innovation; these include the business environment, access to finance, competition, and trade openness, as captured in the Innovation Input Sub-Index of the GII model. On the other hand, nations also need dedicated innovation policies targeting both innovation actors and the linkages among them; these include collaborative research projects, public-private partnerships, and clusters.13 Business executives in charge of innovation surveyed in Chapter 5 by Engel et al. stress the importance of...
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...Brazil Brazil is one of South America’s most influential and powerful Countries, and leading its cause to become one of the world’s most influential counties. Brazil is one of the BRICS countries. BRICS refers to Brazil Russia India China and South Africa becoming economic figures due to their newly advanced economic development. Much of brazil’s increase in wealth comes down to the vast amount of natural resources in the country such as Iron ore a resource craved by many large manufacturing nations, furthering this Brazil has recently been able to capitalise on their offshore oil resources allow them to become self-sufficient for energy an area where they previously struggled and relied heavily on other nations. Gross National Income (GNI) refers to the level of economic activity produced in a country in any one year. Since 2007 Brazils GNI per capita (per person) has nearly doubled, from $6,100 in 2007 to $11,630 in 2012 with a yearly rise around currently around 5% very much likely to continue. (data from http://data.worldbank.org/country/brazil ) This increase in both GNI and GNI per capita shows Brazils continuing success and development. Brazil currently have a GDP (Gross Domestic Product) of $2.45 trillion meaning its ranked 6th in the world charts a massive growth of a once mass poverty stricken undeveloped country (data from http://www.statisticbrain.com/countries-with-the-highest-gdp/ ). The main cause of the GNI increased levels along with its vast levels of natural...
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...the output in monetary terms, and you can check current trends of the GDP by taking a look at the Bureau of Economic Analysis document GDP decline in First Quarter. In the BEA release highlights document, you can see a decrease in the GDP in the first quarter of 2014, which caused corporate profits to decline drastically. The document states that “decreased 13.0 percent in the first quarter of 2014, according to the “second” estimate released by the Bureau of Economic Analysis”. In the fourth quarter of 2013, real GDP increased 2.6 percent. The first-quarter real GDP growth rate was revised down 1.1 percentage point from the advanced estimate released in April” (2014, bea.gov). Within the highlights, it mentions how the main driver of the decline was a “significant decline in inventory investment, notably by motor vehicle dealerships.” It also makes note that real final sales of domestic product rose 0.6 percent in the first quarter (2014, bea.gov). The BEA release highlights further note that declines in exports, in business investments, state and local government spending, and in housing investment contributed to the first quarter real GDP decline (2014, bea.gov). However, consumer spending in health care and in home utilities increased in the first quarter. Profits of financial corporations fell 15.0 percent in the first quarter after rising 1.3 percent, whereas profits of nonfinancial corporations fell 8.1 percent after rising 1.5 percent, with profits from the...
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...http://www.ibisworld.co.uk/market-research/marine-fishing.html Primary Sector: 1. Fishing: the industry of fishing in the UK is declined from 2005 to 2010, the reason are the falling fishing quote, the industry has been left floundering by volatile seafood price and sharp economic downturn. After the 2010 they had a growth of 2.5% forecast including the years 2014 and 2015. The reason for the growth is the demand of seafood moderately and the seafood price rise. They employs 12.150 people and they have 6.291 businesses in the UK. Also, the annual rate was 0.9% of £819.1 million. 2. Foresting and Logging: the industry of Foresting has always increase in the years, and the reason why are increased each year is from the governments, local authorities and woodland owners as government bodies that give to the industry more services over the period and replanting the level as risen. The annual growth for the foresting industry is 1.3% over 5 years including 2014 and 2015 to reach £945.5 million. For the first 2 year of the demand of the industry fell. Also, they planned to increase the forecast by 2.1 in the 2014 and 2015. Their employs 14,000 people and have 3,221 businesses around the UK. Secondary sector: * Plastic packing goods manufacturing: the plastic packing goods in during 2005 and 2010 they increased...
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...Philippine economy managed to grow in the first semester of 2014 despite the haunting effect of Typhoon Yolanda that hit the country during the fourth quarter of 2013 and the lingering weakness of the global economy. For the first semester of 2014, Gross Domestic Product (GDP) grew by 6.0%, relatively slower than 7.8% reported in the first semester of 2013 and below the 6.5% -7.5% National Government’s target for the year. Meanwhile, Gross National Income (GNI) accelerated by 7.2% from 6.8% in the first semester of 2013. The Philippine is usually described as domestic-demand driven economy, but because of logistical challenges this year, the second quarter growth of 2014 was driven by net exports. Total exports grew by 10.3 % in the second quarter of 2014, a rebound from the 7.7% contraction in the same period last year. The growth was fuelled by exports of goods and exports of services. Total exports of goods increased by 10.0% in the second quarter of 2014 from a decline of 8.8% in the same period last year. Electronics manufacturers, the country’s largest exporters, improved their export growth forecast for the year to 8.0% from the previous 5.0% with demand expected to improve on the back of the economic recovery in the industry’s major export markets like the United States and China, and the lifting of Manila’s extended truck ban. Household Final Consumption Expenditures continued to expand in the second quarter of 2014 by 5.3% relative to the 5.1% reported in the same period...
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...SYSTEM: INDONESIA Indonesian Economy Overview The largest economy in Southeast Asia, Indonesia – a diverse archipelago nation of more than 300 ethnic groups -- has charted impressive economic growth since overcoming the Asian financial crisis of the late 1990s. The country’s gross national income per capita has steadily risen, from $560 in the year 2000 to $3,630 in 2014. Today, Indonesia is the world’s fourth most populous nation, the world’s 10th largest economy in terms of purchasing power parity, and a member of the G-20. It has made enormous gains in poverty reduction, cutting the poverty rate to more than half since 1999, to 11.2% in 2015. Indonesia’s economic planning follows a 20-year development plan, spanning from 2005 to 2025. It is segmented into 5-year medium-term plans, called the RPJMN, each with different development priorities. The current medium-term development plan – the third phase of the long-term plan -- runs from 2015 to 2020, focusing, among others, on infrastructure development and improving social assistance programs in education and healthcare. Such shifts in public spending has been enabled by a reform of long-standing energy subsidies, allowing for more investments in programs that directly impact the poor and near-poor, as well as vast improvements in infrastructure investment. Considerable challenges remain in achieving Indonesia’s goals. Due to weaker demand for commodities – the fuel for Indonesia’s economic boom in the past decade –...
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...A RESEARCH PAPER PORK BARREL: TO BE ABOLISHED OR NOT OUTLINE Thesis : The recent scandal of government officials allegedly channelling their pork barrel funds to fake non-governmental organizations with nothing but ghost projects to show for has yet again raised the issue of abolishing the pork barrel. I. Introduction to Pork Barrel A. Definition of Terms B. PDAF in the Philippines C. Importance of PDAF II. PDAF scam A. People involved B. Reactions and Protests III. Abolishment of Pork Barrel A. Benefits B. Consequences C. Alternatives D. Opinions about the issue E. What the government will do after abolishing the Pork Barrel IV. Conclusion V. Recommendation I. Introduction to Pork Barrel A cure, a treat, an alliance, a devastation or just a play. What do we really know about that so called Pork Barrel? A. Definition of Terms The Priority Development Assistance Fund (PDAF) is a discretionary fund in the Philippines available to members of Congress. Originally established as the Countrywide Development Fund (CDF) in 1990, it is designed to allow legislators to fund small-scale infrastructure or community projects which fell outside the scope of the national infrastructure program, which was often restricted to large infrastructure items (Nograles and Lagman ). The PDAF is commonly called the "pork barrel", and has been the subject of much public criticism following exposés on abuses perpetuated by members of Congress on use of the fund...
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