...consumption, but President must aware there is high chance this will affect the whole economic system flow. President must cooperate with Federal Reserve for this specific action to negate of negative impacts may happen and let Federal Reserve more concern about their duty and task to deal with interest rates. Reducing taxes, not only personal taxes but also corporate taxes may trigger the spending power of the households and businesses because their budgeting expense increases. Of course, the government income also may have deficit and cause higher inflation. President must cut-off the expenditure for unnecessary expense from all sectors such as cultural activities, diplomacies, government press meetings, hosting dinners, etc. Tighten up the budget and keep low the government debt. Government must spending the budget into healthcare, education and technologies sectors because it effective to help the economic growth as people need healthy to keep productive, education to maintain career competitiveness and technologies to sustain the modern area growth competition. Government must care into domestic area to stimulate domestic production and buying more local goods even it is higher than import, maintain import level as lowest level necessary while increasing export. Government may buy more bonds; it can increase the money supply. Sell bond can raise the bank reserve as it will restrain the economic growth. All these action combines to stimulate the...
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...PROJECT PAPER II LISA JOHNSEN BUSINESS ECONOMICS-GM545 SUMMER 2012 LCJOHNSEN@YAHOO.COM Ch. 16 Question 5 “Frictional unemployment is important to any economy because people need time to search for new jobs, and employers need time to interview and evaluate potential new employees.” (Stone, 443). This involves short-term unemployment of people who are changing jobs, careers, or locations. The people looking for jobs are the jobless and are searching but have not found a job yet. Due to the mismatch of the characteristics of supply and demand in the job market this type of unemployment exists. The characteristics mentioned previously include skills, payment, location, timing, tastes, attitudes, as well as other factors. When people hold on for the ideal job extend frictional unemployment short-term while reducing unemployment long-term because they are less likely to change jobs. The good sign of frictional unemployment is that it signifies a healthy economy. This type of unemployment can only survive in a fast-growing economy. Frictional unemployment benefits workers by giving them time to search or jobs in which they are a good-fit while allowing companies to choose from the best talent available. Absence of frictional unemployment signifies a stagnant economy; one without growth, innovation, and tires skillsets. Ch. 16 Question 6 “Hyperinflation is an extremely high inflation rate of at least 50 percent per month. Currently most economies...
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...Mr. President: Mr. Burke discussed the issue of fiscal policy and monetary policy, he suggested to “lower interest rates further”, honestly, lowering interest rates does not seem to be a horrible idea. Fiscal policy can be used to regulate the recession and further prevent us from another depression. It involves adjusting some of the government spending. On the other hand monetary policy controls the money supply. The government finances its deficit by issuing Treasury bonds controlled by monetary policy. Mr. Burke’s point from a traditional view of lowering interest rates that would increase consumption and reduce the national savings. Something that I do not agree with is the opinion of Kathy Lee. Lowering government spending makes sense, but increasing taxes on the consumers seems to be a huge mistake in my opinion. I believe that they should be left alone and possibly even allow for more tax cuts. I believe this because things are already extremely difficult financially for the majority of Americans, and increasing taxes would lead to more tax avoidance and evasion, which will only dig us deeper in a hole, as consumers have even less incentives to work towards recovery financially. Consumer confidence is vital to the beginning steps for a nation to recover from recession. Regarding the raising of bank’s reserve requirements as is the partial advice of Patricia Lopez and Allison Tanney, I do not believe this should be done. The reason for this is that I feel...
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...The deep recession, in this example, doesn’t deviate far from our current economic situation we are experiencing as a nation today. With prices falling and unemployment rising, a combination of both monetary and fiscal policy will be needed in order to bring the nation out of this severe recession. Due to falling prices, with the inflationary rate at -2.4%, it is evident that both businesses and individuals are not spending and overall aggregate demand (AD) is falling. The Economic Consultant to the President, Mr. Raymond Burke, has recommended that the President lower interest rates to further help businesses and consumers “get back on their feet.” I agree with lowering interest rates as Raymond Burke said because lowering interest rates should encourage consumption and investment. However, there are some inaccuracies in what Mr. Burke is recommending. The President has neither the ability nor the authority to make adjustments to interest rates. The Federal Reserve (the Fed) is responsible for the discount rate and for setting the reserve requirements. I do not agree with raising taxes as Kathy Lee states because that would mean less money would go to the economy, and as result there would be an increase in prices and/or job cuts. I also do not agree with reducing government spending as Kathy Lee said because this would exacerbate the situation with more contraction in the gross domestic product (GDP). I do not agree with Ms. Patricia Lopez’s, Consultant to the Federal Reserve...
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...Rally Round the Trade Name 1) Explain whether or not the fact that Gabby’s surname is Rally gives her the right to use it any way she wishes. I believe that Gabby has the right to use her surname “Rally” in her pizza business because it’s a different business and is not harming the Rally motor business As long as it’s a different type of business, then Gabby can use the last name “Rally.” Now, if Gabby wants to open up an auto business, she cannot use Rally as the name of the business because it will be confliction with the already existing business. A name or a trademark is what differentiates a business from any other business. Each business name must be unique according to its form or type of business. Just like two corporations cannot have the same name within a state, two auto businesses in the same town cannot have the same name. Gabby cannot use her last name in any way she wishes to. If there already exists a business named “Gabby’s Auto’s” she cannot open another auto shop with that same name. If she were to be allowed to do so, confusion will be created amongst consumers. It would be unclear to which “Gabby’s Autos” one is referring to so she would have to change the name of her business to something else, something more distinguishing that would avoid any kind of confusion. Just because her last name is Rally, it doesn’t give her the right to use it as she pleases. If this were the case, millions of businesses would have the same name worldwide and there would...
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...Keller Gm545 Course Project - Part 2 Keller Graduate School of Management Business Economics GM545 Online Graduate Course Summer Session A, July 2010 Project Part 2 7 August 2010 Exercise 1: Chapter 15, Question 14 (textbook page 424) National income and output are used in economic studies to estimate the value of goods and services produced in an economy—a snapshot of a country’s economic activity. A system of national accounts is employed to account for and record economic changes. National income is calculated using a variety of different methods. Some of the more popular methods include GDP (Gross Domestic Product), GNP (Gross National Product), NNP (Net National Product), NNI (Net National Income) PI (Personal Income) and PDI (Personal Disposable Income), among many others. [ (Investopedia ULC 2010) ] National income statistics provide us with a numerical comparison of one country’s economic situation with another country’s economic situation. Easily economic growth of countries can be compared over time or at a particular snapshot in time. National income accounts also provide government agencies and private businesses with a tool for economic planning and budgeting. What’s more is this information provides a comparison with the standard of living from one country to another. Many issues arise with accounting for the true national income of any country. Certainly there is a concern for double-counting, for example the outputs of...
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...Project Paper 1 Project Paper 1 Business Economics GM545 Fall 10 Semester Standard and Session B Polo_29918@yahoo.com 1/30/2011 Business Economics GM545 Fall 10 Semester Standard and Session B Polo_29918@yahoo.com 1/30/2011 Arthur Smart Arthur Smart Everyone’s Gasoline Problem We are all familiar with fluctuating prices of gasoline at the pump. Supply and demand is a major factor causing price fluctuation at the pump. The law of demand states all else being equal, as price falls, the quantity demanded rises, and as the price rises, the quantity demanded falls. This is an inverse relationship. If this statement was true concerning fuel then the consumer demand for fuel would decrease as the price increases. Obviously it is not. Supply must also be taken into account. The law of supply states that as prices rise, the quantity supplied rises, as price falls the quantity supplied falls. If demand rises or a disruption of supply occurs; pressure will be placed on the price. The inverse is also true, if a surplus exists or demand falls less pressure will be put on the price. Competition between retailers could cause prices to fluctuate. If competition does not exist and the retailer is the only player for miles the price may be higher. Oil, gold, wheat and other products are traded on a world market. The price of oil has risen because of its demand around the world. The unrest and war in Iraq and other oil producing countries has also driven prices...
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...You Decide Business Economics GM545 Spring 2012 Semester, Session A Mr. President, I would like to take this time to provide a few recommendations to help our economy. As you know we are in a severe and deep recession. Many analysts say it could last for at least another year. It is urgent that the government makes both monetary and fiscal policy adjustments. We must put a stop to our growing unemployment and fix our inflation rate. I have met with several consults and advisors and would like to summarize it for you. Economic consultant, Raymond Burke, advises that you lower interest rates so that consumer’s can “get back on their feet”. I think it is a great idea, and I would encourage you to work with the Federal Reserve in making these adjustments. This would ideally encourage consumers to increases their spending, and lead to rise in aggregate demand. Kathy Lee, former economic advisor, also made her comments known. She recommends taxes be raised, and government spending be reduced. I feel that just the opposite should happen. If we decrease taxes and increase government spending, we could create more jobs. Also, with a decrease in taxes, people will have more money to spend, which will create more jobs. Consultant to the Federal Reserve, Patricia Lopez, believes that the Federal Reserve sell bands to raise the requirement of the reserve. However, if we where...
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...You Decide Regina Washington Week 6 You Decide Business Economics GM545 August 14, 2011 The situation with the United States debt need to be addressed and in order to assist the U.S. economy into getting out of the most severe recession that is giving the impression that will continue for at least another year, we need to develop an approach that cannot be accomplished with one single policy, the support will involve both monetary and fiscal policies. As the senior economic advisor with many years of experience as a consultant, I recommend a policy that will encourage growth in aggregate demand to help pull the economy out of the recession. The economy needs direct stimulus from the government since monetary policy can only provide incentives to firms and households to spend, and not actually increase spending. If the government decides to increase spending, as suggested by Allison Tanney, it will directly contribute towards increasing aggregate demand. In turn, higher aggregate demand will help increase real GDP. Another reason why fiscal stimulus is important is that it has been shown that monetary policy is not an effective tool in stimulating growth as the fiscal policy. Patricia Lopez suggests leaving interest rates in their current state, but in my opinion I say that an expansionary monetary policy that lowers interest rates will encourage firms to increase investment. It will also help increase consumption since people will be able to borrow at...
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...| | Business Economics GM545 Project 2 | | Chapter 16-Question #5 Frictional unemployment Unemployment that is always present, it occurs when employees are transitioning from one place of employment to another or employees searching for new or better positions (Frictional Unemployment, 2013). Frictional unemployment is a natural part of our economy, and is considered to be necessary and beneficial. Frictional unemployment gives people time to search for jobs that they really want. It allows employers to choose the best employees to suit their demand. Without frictional unemployment, employees will be forced to continue to remain in jobs that they do not want, and employers will be forced to continue to employ employees that are not best suited for the jobs that they are in (Stone 2008). Chapter 16-Question #6 Hyperinflation is described as an extremely high rate of inflation, in the past it was thought that hyperinflation occurred when inflation was 50% a month, but now it has been redefined as when inflation is 100% per year. Hyperinflation is caused when government spending exceeds is tax revenues, and government is forced to print more money to finance these debts without concrete backing. During the peak of inflation, workers are paid hourly and they scramble to purchase whatever their earnings will allow them. In the end, money has no value, and other forms of trades such as barter takes over. This causes a distrust in the money and consumers are...
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...Regina Washington Week 6 You Decide Business Economics GM545 August 14, 2011 The situation with the United States debt need to be addressed and in order to assist the U.S. economy into getting out of the most severe recession that is giving the impression that will continue for at least another year, we need to develop an approach that cannot be accomplished with one single policy, the support will involve both monetary and fiscal policies. As the senior economic advisor with many years of experience as a consultant, I recommend a policy that will encourage growth in aggregate demand to help pull the economy out of the recession. The economy needs direct stimulus from the government since monetary policy can only provide incentives to firms and households to spend, and not actually increase spending. If the government decides to increase spending, as suggested by Allison Tanney, it will directly contribute towards increasing aggregate demand. In turn, higher aggregate demand will help increase real GDP. Another reason why fiscal stimulus is important is that it has been shown that monetary policy is not an effective tool in stimulating growth as the fiscal policy. Patricia Lopez suggests leaving interest rates in their current state, but in my opinion I say that an expansionary monetary policy that lowers interest rates will encourage firms to increase investment. It will also help increase consumption since people will be able to borrow at lower interest rates...
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...Keller Graduate School of Management Business Economics GM545 Online Graduate Course Summer Session A, July 2010 You Decide 14 August 2010 The deep recession that we have found ourselves experiencing in this example doesn’t deviate far from our current economic situation as we stand as a nation today. With economic analysts predicting that recessionary conditions may persist for at least another year, the economy requires some government intervention to put it back on track. With prices falling and unemployment rising, a combination of both monetary and fiscal policy will be needed in order to bring the nation out of this severe recession. Prices are falling, with the inflationary rate at -2.4%, making it evident that both businesses and individuals are not spending and overall aggregate demand (AD) is falling. The Economic Consultant to the President, Mr. Raymond Burke, has recommended that the President lower interest rates to further help businesses and consumers “get back on their feet.” There are some inaccuracies in what Mr. Burke is recommending. The President has neither the ability nor the authority to make adjustments to interest rates. The Federal Reserve (the Fed) is responsible for the discount rate and for setting the reserve requirements. I do not agree with Ms. Patricia Lopez’s (Consultant to the Federal Reserve) recommendation to leave interest rates alone, sell bonds and raise the bank reserve. Raising the bank reserve will discourage banks from lending...
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...Keller Graduate School of Management GM545- Business Economics Professor McLean February 13, 2012 YOU DECIDE SOLUTION The economy is needs a little help from the government but they also need to have strong and prominent monetary policies. For this situation, I agree with Allison Tanney, the President should work with Congress to increase government spending and the Federal Reserve should increase the money the money supply. By doing one or the other, you are only doing half the job. If government spending were to increase it would help to stimulate the economy. In addition, lowering interest rate would encourage firms to increase investment. This would also aid increase consumption because now people with mortgages and debt can purchase homes, consolidate debt or even keep from homes being foreclosed. Raymond Burke stated that the President should lower interest rates further to help business but the President does not control short-term interest rates, it depends on what the Federal Reserve wants to do. Therefore his option would not work. The US economy is coming out of the most severe recession since the Great Depression and the economy needs as much support as it can possibly get. This will involve both monetary policies and fiscal policies. The economy needs direct stimulus from the government since monetary policy can only provide incentives to firms and households to spend, not actually increase spending. If the government decides to increase spending that will...
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...Ime Ekwere Business Economic Business Economics GM545 Fall 2011 Ime_ekwere2004@yahoo.com 16-5 Why is frictional unemployment important to have in any economy? Frictional unemployment is considered as a sign of an economy well being for unemployment that exits in a fast-growing economy with an expanding mobile, flexible and adaptable labor force of having choices. This type of unemployment is beneficial to workers because it allows them to seek for jobs they want the most or jobs those best suits them. It also benefits companies, because it allows them to choose from among the best talent. The absence of frictional unemployment entails people to remain in the same jobs for life, creating a stagnant system that suppresses innovation and rusticates skills. Frictional unemployment is important in the economy because it matches the demand for worker with supply and brings equilibrium into the labor market. Frictional employment arises from those candidates that are just leaving from colleges and those who are unemployed because they are changing jobs. Frictional unemployment is present because there is imperfect information in the labor market and workers have to search for employment suitable for them. 16-11 Structure unemployment: this is a type of unemployment that arises from an absence of demand of workers that are available. Reasons for the absences of demand for workers are due to the change in technology, where machines are use to...
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...Eldred Merricks | BUSINESS ECONOMICS | GM545, Summer Term | | Emerricksrvp@gmail.com | 7/18/2011 | | Question 1 Everyone’s Gasoline Problem I think in order to understand what happens with gasoline prices one must first understand what elements make the retail price. The retail price is mostly comprised of taxes, refining, and crude oil. Crude oil is what we will focus on because it represents more than half of the cost associated with gas prices. [ (Wagner, 2011) ] As supply for crude oil tightens, it drives the price of gasoline higher. When OPEC decides to cut back on the production of crude oil it effects gas prices dramatically. Moreover, change in the demand for gasoline is primarily set by the mainly determinant of demand - the number of buyers using the fuel for transportation. For example if you look at my area and the growth in the number of people driving cars and trucks, has expanded in the last few years. As you look at the average price of gasoline in my area over the last 36 months, it went from approximately $3.98/gallon in July 18, 2008 to as low as $1.48/gallon in December of the same year to now $3.65/gallon. Although we have seen a relatively spike in prices for gas, I believe that it is the “change in quantity” demanded that has cause the prices in my area to fluctuate. For example, as prices go up people to spend less time on the road and more time at home. Our travel has mostly become a result of getting back and forth...
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