International Trade ECO 372 University of Phoenix There are many contributing factors to the stabilization and prosperity of our global market. We, the United States, are living in a time of severe trade deficit, meaning that we are importing many more goods than we are exporting. While it is nice to be able to buy foreign products at a lower price, there is risk in doing so. When we purchase foreign goods over domestic at lower prices it forces our domestic companies to sell their goods at lower prices to remain competitive. These lower prices may lend to making enough profit to sustain the current workforce.
This affects rates on everything from mortgages to car loans. Fiscal policy is set by legislative action or executive order, so the auto industry plays a significant role in the U.S. economy. In October 2021, employment at auto and parts manufacturing and dealerships was more than 6.4 million, the health of the auto industry depends on the health of the economy. Monetary policy sets the tone for the economy so if interest rates are low, cars are more affordable, which usually means more auto jobs which is a good thing but if interest rates are high, dealerships have fewer auto jobs and more unsold cars . This leads to less tax paid by the industry and more unemployment insurance payouts, both of which affect fiscal policy.
Lotus Rental Car wants to reduce expenses and increase their consumer base by adding new fuel efficient and alternative fuel vehicles to the Lotus fleet if these measures would be profitable. Key problems With the high demand for car rentals, and having more ecologically aware consumers, keeping alternative fuel vehicles in stock has been difficult. Hertz Rental Car Corporation has 4,000 hybrids throughout the United States, rents the hybrids for more money and still has a higher demand than supply. The demand for the hybrids has jumped 40% in the last year. Because of high consumer demand, auto manufacturers do not offer big discounts to commercial accounts.
The main reason that a government imposes a tax on fossil fuels is to try and correct for the negative externality (pollution) which is produced when they are consumed. Without the tax there would be a market failure as car owners would be over consuming petrol as they are not being charged for the damage to the environment. There are 3 key aspects to this question which are; those that lose from a reduction, those that gain from a reduction and finally at what level the overall price for petrol was before the tax reduction. The major argument for maintaining the level of taxation on petrol and diesel is to protect the environment. When the social costs of consuming a good are higher than the private costs, there is said to be a negative externality.
Ultimately this is used to illicit a raise in GDP levels (Fiscal Policy). 3. An example of this would have been Obama’s Economic stimulus package. This is an expansionary policy as it pulls from money we may not even have as a country in order to avoid a serious collapse due to the population being cautious with their income causing a stall in the economic growth of the country. Therefore, with an economic stimulus package, people were more willing to spend their money (possibly even more than the stimulus was) and take out loans which all raise the GDP for the country as well as improve investor confidence in the market as a whole (Eaton, G.).
One of his example for limited natural resources is fossil fuel. The fossil fuel is a symbol of the heart of our modern economies. According to Mckibben, the nature of our lives may change as the scarcity damage on the economy if we run out of planet. In fact, not only the fossil fuel, but also the planet, we’re running out of it. The economic growth has put too much stress on the nature.
dollar relative to other currencies also affect employment levels. According to Economist Christina Romer wrote in May 2011: "A weaker dollar means that our goods are cheaper relative to foreign goods. That stimulates our exports and reduces our imports. Higher net exports raise domestic production and employment. Foreign goods are more expensive, but more Americans are working.
However, pensioners will be hit hard because the extra income they earn from saving will have dramatically reduced, making them worse off. On the other hand, savers may leave the pound for better interest rates in other countries (hot money), causing a fall in the demand for the pound. As a result the value of the pound will fall, making exports cheaper and there will be an injection of net exports. In conclusion, the impact of loose monetary policy will be beneficial to the economy because extra consumption and investment will cause AD to increase which will increase economic growth. However, it takes a long time for changes in interest rates to feed through to consumption and investment and by then the economy may have gotten worse.
It may also contribute to greater productivity, resulting in a lower inflation rate that would help retirement savings go further. As the proportion of retirees in the U.S. grows, one of the challenges for a shrinking workforce is to produce enough goods and services for both themselves and the retired population. More investment capital in the private sector should result in the kind of productivity gains necessary to meet that challenge. An Impact on the Market Privatization would also have a significant impact on the financial markets, especially the stock market. Younger individuals are likely to invest most of their contributions in stocks, and the increased demand would propel stock prices higher.
P5 M3 Assess the impacts of changes in global and European business environment on a selected business. Oil price fluctuations Crude oil is the worlds most traded commodity by value, it is vital for many industries e.g. transportations, polymers and energy production that are closely linked with oil production As you can see in the image above the price of oil has crashed within a few months which has drastically decreased the price of fuels, the cause of this crash was due to new production methods which allowed other people to produce oil rather than the just the few that could before, this new method is called fracking. Assessment of impacts for KI KI are not heavily reliant on oil, they only use fuel for their cars which their main consumption. The price of fuel does influence them though, the biggest benefit is the effect on the customers, the lowering of the price of fuel means that people will, in effect, have a small pay rise, this will help KI as this will increase their customer’s disposable income and increase their consumer confidence.