Why? If one market crashes it creates a ripple affect, thus effecting Canadians in greater numbers than her current situation. Despite Canada's struggle to regain it's footing economically, Mary Jones claims in her Globe and Mail article that "the Canadian economy has, no doubt, recovered majority of the jobs lost during recession, but the job growth in the nation is still a far cry considering the underlying employment market weaknesses" (Jones, M. p. 1). In addition, Sonya Gulati and Derek Burleton, economists with TD Bank, maintain that the past year had been a good year in terms of job growth in Canada, but, not the best year. And this is especially true for the Canadian provinces of Alberta, Ontario, New Brunswick and Nova Scotia where the employment growth is a still to reach the pre-recession levels (Jones, M. p. 1).
In order to protect the exchange rate between Canada coins and US dollars, Bank of Canada has to increase the interest rate as a response to US Fed. This would result a slow-down in Canada GDP growth. 1.1.3 Interest Rate: Figure 3(source of data: International Monetary Fund) Interest rate was fluctuating throughout the period year 1984 to 1990, reached a peak in 1990 at 14%, and continuously decline from 1990 to 1994, with an abnormal jump in 1993. The interest rate began to rebound in the mid 1994. After 1996 the interest rate kept below 5% at most of the time.
The author of this article, Jeannine Aversa, is stating that key economic indicators point to the likelihood of a recession. Aversa supports her thoughts by noting the real GDP; “crawled at a 1.3 percent pace in the opening quarter of 2007…even weaker than the sluggish 2.5 percent rate in the closing quarter of last year.” The author suggests the main cause of the economic slowdown is due to “the housing slump.” Consumer expenditures are driving the economy, but Aversa worries about a “fallout from risky mortgages and rising energy prices.” Uncertainty of the Feds actions concerning the interest rates is leading to lower investment spending. The author also states that the Feds decision on raising or lowering the interest is due to the
2. Caterpillar Inc. suffered during the global economic recession of 2009 but seems to be recovering. Produce a report which analyses Caterpillar’s recent profitability and performance. You should assess to what extent strategy concepts introduced on this course provide an explanation for these changes in performance in an increasingly globalised world. You will need to consider at least two of the strategy concepts.
In fiscal year 2008, the return on invested capital of continuing operations was 9.5% compared to fiscal year 2007’s 13.9%. The decrease reflects the decrease in operating profit that also impacts the rationalization charges. If the rationalization charges are excluded the return on invested capital for continuing operations would have been 11.4% (Phillips, Libby, Libby, 2011). The cash flow statement shows the movement of cash within a company. The cash flow statement is split into three categories: operating activities, investing activities, and financing activities.
The total assets of Coke have risen over the years but the percent of current assets has reduced. The reduction in productive assets is a positive indication that fewer assets are required to generate increased revenues. The assets that have increased are related to other long term assets. These long term assets are possibly from acquisitions for intangible assets. There is a noticeable reduction in the receivables line and increase in cash.
Economical Factors UK’s economy is strong enough to avoid recession in 2008, but there are high unemployment and uncertainty in the economic conditions. UK’s economy will grow 0.2 % in 2012 and 2 % in 2013 said CBI Director-General John Cridland (Hamilton, 2012). GDP down to -0.4 % in 2008, recovery is in full swing, with 1.1 % GDP in 2011 as per the data by OECD
over the 3-year period from 2003 to 2005. Total assets dropped $1 million, or 3%, but remain near $35 million. The most notable asset change is the $500,000, or 8%, decrease in accounts receivable. However, cash did increase $200,000 which gives the company the opportunity for business investment in the coming fiscal year (“University of Phoenix,” 2006). A positive trend shows that total liabilities have dropped $1.7 million, which is accounted for by a $2 million, or 42%, decrease in long-term debt.
An instantaneous examination of income statements reads that there were strong sales figures with a worth around $70 billion sales per year. Nonetheless, there was something that caught my eye in 2009, which was the critical drop in sales paralleled to previous years. In 2009 Home Depot net sales plummeted approximately 7.8% compared to the net earnings that were dejected in 48.5% in 2009. In the 2009, dividends were declared quarterly at $0.22500 per share while in July the market price was roughly $28.51 per share. Notwithstanding increasing dividends and a moderately stable share price, the home improvement retail industry remains to struggle due to the fragmentary world wide economic complications.
Should the Government use Fiscal or Monetary Policy to Eliminate Canada’s Current Contractionary Gap? Introduction An economic recession is a period of slow economic activity; this contractionary phase is characterized by high unemployment and low levels of GDP. On the other hand, government bodies desire economic growth and low unemployment levels in order to attain a stable economy. These goals may be reached through the use of either fiscal policy or monetary policy. This paper will focus on and discuss which policy is more effective in eliminating the current recessionary gap of Canada.