...of goods and services in a specific country or region. The United States of America is known across the entire world as having the largest economy. The economy in the United States today is now where near what it was many years ago. The current economic situation has the country trying to regain its high economic status. The United States economy is really not good in its current state, but somewhat better than it was five years ago. Many people are not aware of the problem that we have in this country. I think that the biggest question in this country in reference to the economy is how we got to this place, with this economy. There is so much blame and finger pointing as to how the United States economy ended up this way. My opinion is that part of the problem in this country is that we depend on other countries to produce things for us that we could or should produce ourselves. The United States economy has changed and somewhat stayed the same as compared to five years ago. Points in this paper that will be discussed will be exports, imports, interest rates, inflation and unemployment. Exports are defined as goods or services produced in the United States and sold in another country. (O'sullivan) Imports are goods and services produced in a foreign country and purchased by residents of the home country. (O'sullivan) The United States is the world’s largest importer. The main import of the United States is crude oil and the problem with oil prices has been the...
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.... In comparison between the United States and Russia and their GDP, the United States has a GDP of 17.46 trillion while Russia’s is 3.568 trillion. The United States GDP per capita is 54,800 while Russia’s is 24,800. It is very clear when you compare the two that the United States has the bigger GDP by far. I believe that the United States has a better standard of living for its citizens than Russia. To evaluate the standard of living I looked at the real GDP per person statistics. Also, I looked back through the textbook to page 44 where you can see the income per person for different countries. It was figure 2.3 to be exact. For the United States I browsed on the statistics chart in the textbook on page 133. Another thing that I wanted to add is if you wanted to look deeper into this you could research life expectancy in each country. We have a better idea for the United States. However, I would not have a guess for Russia. We learned that could make a difference when it comes to standard of living. 3. The unemployment rate in the United States is a bit higher than it is in Russia. As we can see in the United States it is 6.9% and in Russia it is 4.9%. We have to remember that these stats are from 2014 though. It could be slightly different for both countries for this year. The labor force participation rate for the United States is 63.41% and for Russia it is 86.49%. The United States is two percent higher on unemployment. Being that Russia has more than a 20 percent...
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...1. Introduction Money demand is an important element in macroeconomic analysis especially in constructing monetary policy. The demand of money is the quantities of money that people willing and able to hold at alternative interest rates, ceteris paribus. There are several models of money demand used to explain why individuals and businesses hold money balances like cash and checkable deposits. Those models of money demand shows how do the behavior of individuals and businesses causes the fluctuations of money balances in the economy. According to the liquidity preference theory by economist, John Maynard Keynes, he determined that there are three primary motives that people holding money.The first motive is transaction motive which explained that people holding money and used it to buying things. In this motive, money demand depends on size of income, spending habit and slightly affected by interest rate. The second motive for holding money is for precautionary motive which means that people hold money in anticipation of wishing to make huge transactions in the future. People will keep money on hand just in case to overcome unforeseen emergency. The demand of money in order for precautionary motive is depend on size of income, nature of person and farsightedness. The last is speculative motive which people will like to keep money in the liquid form and invested in securities when the interest rate are rises thus it can be said that hold wealth as money to store value. This motive...
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...There are three major economic problems in our economy. They consist of economic growth, unemployment rates, and inflation. In the midst of this project, I will touch on all three of these major concepts. First let me start off with economic growth. The definition of economic growth is an increase in the amount of goods and services produced per head of the population over a period of time. So in reality this means “an increase in capital stocks, event is in technology, and improvement in the quality and level of literacy Are considered to be the principal cause of economic growth.” (1) Economic growth can be measured in two ways, by an increase in real GDP over appeared of time and an increase in real GDP per capita over sometime period. According to my macroeconomics book, the real GDP for the United States in 2011 was around $15,052.4 billion and $15,470.0 billion in 2012, which means economic growth rate for 2007, was 2.8%. Usually growth rates are positive, but they don’t always have to be, for example in 2009 the US growth rate was a -2.4%, which means a decrease in the country’s gross domestic product (GDP) during any given year. Let’s talk about modern economic growth, modern economic growth is defined as “sustaining an ongoing increases in living standards that can cause dramatic increases...
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...of the United States of America. The Federal Reserve was first established on December 23, 1913. It was enacted by the Federal Reserve Act. This is an act to provide for the establishment of Federal Reserve banks. Mostly it was to furnish an elastic currency, to afford means of rediscounting commercial paper, to establish a more effective supervision of banking in the United States of America, and also for other purposes. Over the years different responsibilities and roles have occurred within the Federal Reserve. It did not just consist of the same functions but over time it changed and changed for the good of the country. The major factor that has contributed to most of the change within the Federal Reserve is the Great Depression. The Great Depression was known as a severe worldwide economic depression. There was a high unemployment rate, poverty, deflation, plunging from incomes, and many more consequences. These components sent the United States into a deep state of unstableness. The Federal Reserve System is made up of several different components. These components consist of appointed Board of Governors, the Federal Open Market Committee, and twelve regional Federal Reserve Banks, which are located in major cities throughout the nation, numerous privately owned U.S. member banks and various advisory councils. There are seven members that make up the Board of Governors in the Federal Reserve System. The members are appointed by the President of the United States and confirmed...
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...in the UK. The company Apple is a private limited company and the company is open to the public to buy shares in the organisation. The company is based in the secondary sector of business. Here is a table stating some of the economic factors that may affect Apple. China United Kingdom GDP China GDP is worth 5879 billion dollars or 9.48% of the world economy, according to the World Bank. from 1960 until 2010, China's average GDP was 839.37 billion dollars reaching a massive rate 5878.63 billion dollars in December of 2010 and a record low of 46.46 billion dollars in December of 1962 The United Kingdom GDP is worth 2246 billion dollars or 3.62% of the world economy, according to the World Bank. From 1960 until 2010 the United Kingdom's average Gross Domestic Product was 862.04 billion dollars reaching 2810.97 billion dollars in 2010. Inflation The inflation rate in China was last reported at 4.1 percent in December of 2011. From 1994 until 2010, the average inflation rate in China was 4.25% reaching 27.70 percent in October of 1994 and a record low of -2.20% in March of 1999. The inflation rate in UK was last reported at 4% in December of 2011. From 1989 until 2010, the average inflation rate in United Kingdom was 2.72% reaching 8.50 percent in April of 1991 and a record low of 0.50 percent in 2000. Unemployment The unemployment rate in China 4.1% in the third quarter of 2011. From 2002 until 2010, China's Unemployment Rate averaged 4.15% reaching 4.30 percent in...
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...to receive full credit. Do not round in any intermediate steps (i.e. only round your final solution – round to six decimal points please). 1.) Assume that a fixed exchange rate system exists between the United States and the fictional country of Neverland. Note that the currency of the United States is the U.S. Dollar, while the currency of Neverland is the Gold Doubloon. Assume that the inflation rate becomes much higher in Neverland, relative to the inflation rate in the United States. Clearly explain how a fixed exchange rate system between Neverland and the United States could make the United States more vulnerable to economic problems (high inflation in this case) of Neverland while a floating exchange rate system between Neverland and the United States could lead to compounded economic problems in Neverland. Please use the countries given in the problem (the United States and Neverland) in your explanation. Clearly explain your logic and use graphs, as necessary. (45 Points) With a fixed exchange rate system existing between the United States and Neverland, the United States could definitely be vulnerable to high inflation. Since Neverland’s inflation rate is much higher than the United States’, Neverland’s goods and services are more expensive. The United States will demand fewer Neverland’s expensive goods and services (so demand fewer Gold Doubloon as well). So instead the US start to purchase more goods and services from their own...
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...Inflation, Unemployment, and the Monetary Policies in the United States Macroeconomics is all about the economy on a large, or aggregate scale. That means a focus on the portions of the economy that deal with inflation, GDP and how it changes over time, recessions, expansions, the business cycle, and government policies that influence the macro economy. The articles I have chosen focus on all of these ideas, but have a more direct focus on it inflation, unemployment, and monetary policy. Jerome Powell is the head of the Federal Reserve (Fed) which is responsible for Monetary Policy in the United States. The Fed’s decisions have a direct correlation on the macro economy. The Fed and their management of the United States is a difficult task,...
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...currently concerned about unemployment, inflation, recession, etc.)? What fiscal policies and monetary policies would be appropriate at this time? The information that’s being reported on the news by the news, web, and paper states the U.S. economy is current conditions greatly concerned about unemployment, which is due to the present recession. The current macroeconomic situation is instilling fear in many, because of the unstable and uncertainties of how we’ll recover and things remission from such state of being. The grime view and predictions the media is reporting it as the “decade’s depression”. Unemployment Rate in the United States decreased to 7.40 percent in July of 2013 from 7.60 percent in June of 2013. Unemployment Rate in the United States is reported by the Bureau of Labor Statistics. The United States Unemployment Rate averaged 5.82 Percent from 1948 until 2013, reaching an all-time high of 10.80 Percent in December of 1982 and a record low of 2.50 Percent in May of 1953. To be frank, there many people that do not understand these figures; and most will be assuming or estimating what it could possible mean for them without a real reason. According, to the Trading Economics, “The Gross Domestic Product (GDP) in the United States expanded 1.70 percent in the second quarter of 2013 over the previous quarter. GDP Growth Rate in the United States is reported by the Bureau of Economic Analysis. The United States GDP Growth Rate averaged 3.23 Percent from...
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...2014 | TABLE OF CONTENTS Contents 1. Balance of payments, inflation and interest rates of United States and Japan. 3 2. Balance of payments forecast. 3 3. Purchasing power parity forecast. 4 4. Forward rate as unbiased predictor forecast. 4 5. Compare forecast. 5 6. Compare past five day forecast and results. 5 Appendix 6 Table 1: Interest Rates 6 Table 2: Inflation Rates 6 Table 3 : Balance of Payments 6 Table 4 : Spot Exchange Rate 7 Explanation and Usage of Data: Using the website Data World Bank interest rates, inflation rates and balance of payments are consolidated in the tables section. Forecasted future spot exchange rate between Japanese yen and US dollar: A country’s import/exports affects exchange rates just as exchange rates affect the level of imports and exports. Generally application the balance of payments approach to forecasting foreign exchange rates imply that a country running a balance of payments deficit will eventually see its currency depreciate. This is due to the fact that there is a surplus of that country’s currency in the market vs. what is held domestically. The supply of the currency will drive the price for the currency down. Occasionally, countries will devalue their currency in order to exports more competitive. In theory the fall of the domestic currency will push the BOP closer to zero. Based on the data provided we can see that the United States continues to operate at a BOP shrinking deficit and the Japan BOP...
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...The United States economy has experienced many ups and downs for the past 42 years. There are many changing factors that influence the economy which includes the Gross Domestic Product, the government deficit, inflation, unemployment, and employment. Each of these factors give an indication to some degree of the current state of the United States economy. However, the strength of the economy has done anything but stay constant since 1970. Since 1970, each of the previous stated factors have changed year to year. By looking at each of the factors individually, one can get a general sense of the current state of the economy and possibly make future predictions as to where the economy is headed. Since 1970, GDP has steadily grown linearly. There has only been a few years where the real GDP has dropped but only by an insginificant amount. However, there was one year where the GDP dropped by $126 billion in the year 1982. During this year, the United States experienced a recession. However, the following year, the GDP was able to grow more than the amount it decreased the previous year; it increased $300 billion, thus, offsetting the loss of the prior year. After this minor recession, there was little to no decrease in GDP in the subsequent years. From 1997-2000, GDP experienced a huge amount of growth each year for four consecuvtive years. This growth was during the internet stock bubble. There were many new internet startups during these years and many people investing into...
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...Final market report- Foreign exchange rate Group 4- Team 5 Bui Ai Phuong- s3445871 Nguyen Ha Phuong- s3445955 Nguyen Thi Minh Tam- s3360710 Bui Khac Xuan- s3342375 Table of contents Introduction 3 Market past performance 3 USD/VND exchange rate 3 AUD/USD exchange rate 4 Analysis of historical macro factors 4 GDP 4 Interest rate 6 Inflation rate 7 Government Intervention 8 Commodity Price 9 Market view and forecasting 10 GDP 10 Interest Rate 10 Inflation Rate 11 Commodity Price 12 Trading strategy 12 Risk anticipation 13 Conclusion 13 References 13 Introduction Vietnam bank for industry and trade- Vietinbank was established in 1988, after the separate from the State Bank of Vietnam. Over more than 20 years of development and growth, Vietinbank is one of the largest commercial bank, holding key role in the current market in Vietnam. As a foreign exchange dealing team working for Vietinbank, in this report, we will first explain the behavior of two currency pair: AUD/USD and USD/VND from 2013 to 2014 by analyzing some historical macro factors that affect the foreign exchange rate during the period. And then we will explain the behavior of these exchange rates over the next six months, after that undertake foreign exchange trading strategies to achieve maximum profit for Vietinbank. Market past performance USD/VND exchange rate According to the graph, in the first three quarter of the year 2013, USD/VND rate flutuated...
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... What is Inflation: Five Types of Inflation Defined Inflation is a situation of sustained and inordinate increase in the prices of goods and services. When there is a rise in general price level for all goods and services it is known as inflation. An inflationary situation could be because of the rise in any single price or a group of prices of related goods and services. Types of Inflation There are no less than five different types of inflation: • Commodity inflation, better known as cost-push inflation • Wage inflation, otherwise known as demand-pull inflation • Monetary inflation, • Fiscal inflation, and • Foreign exchange inflation. Cost-push Inflation: As the name suggests, if there is increase in the cost of production of goods and services, there is likely to be a forceful increase in the prices of finished goods and services. For instance, a rise in the wages of laborers would raise the per-unit costs of production and this would lead to rise in prices for the related products. This type of inflation may or may not occur in conjunction with demand-pull inflation. Demand-pull Inflation This type of inflation occurs when total demand for goods and services in an economy exceeds the supply of the same. When the supply is less, the prices of these goods and services would rise, leading to a situation called demand-pull inflation. This type of inflation affects the market economy adversely during the wartime. Fiscal inflation Fiscal inflation is due to...
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...1. What is the inflation rate? Is inflation a worry or are we in a period of stable prices? Inflation is the overall increase of price for goods and services. Inflation rate is the percentage in which the prices increases on goods and services. This rate is typically determined by the Consumer Price Index (CPI) and the Producer Price Index (PPI). The Bureau of Labor Statistics generates data monthly on the changes of prices. To calculate the inflation rate, you would take the difference in price from two different period of times (years), divide the answer by the original price and multiply that by 100 to get the percentage. The current inflation rate of the United States was calculated through August 2014 and published on September 17 at 1.7%. Price stability is achieved when prices stay constant over an extended period of time or the fluctuation is minimal and easily determined. Currently inflation is at a low but does not necessarily mean the economy is out of trouble. These lower prices may be a prediction to possible problems in the future of the global market. Therefore current inflation is not a concern but its current decrease may be a concern for the future. Websites: http://www.investorwords.com/2452/inflation.html www.bls.gov/cpi/ www.usinflationcalculator.com/inflation/current-inflation-rates http://www.marketwatch.com/story/fading-inflation-good-for-consumers-but-hints-at-lurking-threats-2014-10-19 2. What is the unemployment rate? Will a high unemployment...
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...real GDP has risen every year by at least 1.5%. This indicates the continued development and purchase of new domestic products, contributing to a healthier economy. The United States has seen growth for four straight years, and is going on it's fifth now. While its growth hasn't been as high as 2004-2007's has been, it's still an obvious marked improvement from the economic downturn of 2008 and 2009. REAL POTENTIAL GDP (IN BILLIONS) 2004-2013 17,000.0 16,000.0 15,000.0 REAL POTENTIAL GDP 14,000.0 13,000.0 12,000.0 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 Real potential GDP has consistently risen every year over the last ten years, including during the economic downturn of 2008-2009. A rise in real potential GDP generally indicates the economy is capable of producing more goods and services at their full potential every year. Real potential GDP tends to coincide with rises in real GDP. The United States is consistently rising in real potential GDP, and that indicates the economy has more and more economic potential every year. REAL GDP GROWTH (2004-2013) 4.00% 2.00% 0.00% -2.00% -4.00% REAL GDP GROWTH 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 Real GDP growth is a percent change of how much real GDP has been produced by the year. The United States has had a positive increase in real GDP growth every year except 2008 and 2009. While it hasn't always been the same growth rate, it's been pretty consistently positive. ...
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