Suppose that consumer spending is expected to decrease in the near future. If output is at potential output, which of the following policies is most appropriate according to the AS/AD model a. an increase in government spending b. an increase in taxes c. a reduction in government spending d. no change in taxes or government spending. 4. What tool of monetary policy will the Federal Reserve use to increase the federal funds rate from 1% to 1.25%? A.
Moreover, I would like to know how a natural disaster in another nation can impact our economy here. Not to mention how changes in unemployment impacted the housing markets decline. Housing Market I really haven’t kept up with the economy like I should; however, I have heard a lot regarding the housing market and its decline. This is largely due to high unemployment rates and lending practices of the banking system. Although the economists have said we are coming out of the recession, the housing market is still rocky.
Putting price differences into the PPP equation we can calculate the expected spot rate for peso for 2005: St20 = (180/50)(140/70) St20 = 1.8 St = 36 PPP rate for peso in 2005 is 36/$. Because there is no data for consumer price levels for 2006, inflation rate differentials between two countries can be used to predict peso spot rate for 2006. PPP says that currencies with a high inflation rate should depreciate relative to currencies with a lower inflation rate (Shapiro, 2006). By March 2006 the inflation rate in Costaguana was two times higher that the inflation rate in the US. Assuming that inflation rates for the US and Costaguana are 5% and 10% respectively, 2006 spot rate for peso can be calculated as below: StSo = 1+Pcp1+P$ St36 = 1+0.11+0.05 St = 37.71 Even though PPP does not hold true in its pure sense, relative PPP has been widely used by banks and companies’ management to forecast future exchange rates, especially in the long-run.
On December 16, 2008, the Federal Open Market Committee (FOMC), in an effort to fight what was shaping up to be the worst recession since 1937, reduced the federal funds rate to nearly zero. 1 From then on, with all of its conventional ammunition spent, the Federal Reserve was squarely in the brave new world of quantitative easing. Chairman Ben Bernanke tried to call the Fed’s new policies “credit easing,” probably to differentiate them from what the Bank of Japan had done earlier in the decade, but the label did not stick. 2 Roughly speaking, quantitative easing refers to changes in the composition and/or size of the central bank’s balance sheet that are designed to ease liquidity and/or credit conditions. Presumably, reversing these policies constitutes “quantitative tightening,” but nobody seems to use that terminology.
PPG anticipated its full-year share repurchases to be at the high end of what they had originally projected. They also reported earnings per share from continuing operations to be $1.52, which included previously announced charges from restricting and nonrecurring costs. (About PPG, 2013) The health of the economy is critical for the company because its products are not primary products; so during a recession, people will choose to purchase items of more importance than maintenance products. This explains the big decline in revenues for 2012; this equates to a 14% drop compared to the previous year. Also, it can be seen the earnings per share were down by 12% and the return on average capital was down by 10%.
But the latest United Nations projection puts the figure at little more than a quarter of that - less than 11 billion. That's still 50% more than we have today, but it shows the UN expects much slower population growth in the decades to come than in decades gone by. Some might consider that an increase in the world population from seven billion to 11 billion by 2100 still represents out-of-control population growth. But this UN figure - contained in its World Population Prospects, published every two years - is considered by one expert, at least, to be much too
An Analysis Of The 2001 Recession An Economic Analysis of the 2001-2002 Recession The recession is commonly defined as “Two or more consecutive quarters of a shrinking economy.” During the month of March 2001, the world’s largest economy - The United States of America - began experiencing a downturn, leading into a recession. (“Economists call it recession”). In comparing previous recessions that occurred, it appears that similar patterns exist also in the 2001-2002 recession. Such patterns start with increasing interest rates by the Federal Reserve Open Committee, proceeded by growth slowdowns, the fall of real output, and eventually the rise in unemployment. According to Robert E. Scott and Christian Weller, “further increases in real short - term interest rates herald a slowdown.” Further evidence that suggests a recession was on the horizon was information released from the National Bureau of Economic Research that states, “A peak marks the end of an expansion and the beginning of a recession.”(The Business Cycle Peak, March 2001.)
The company’s cash and cash equivalents started the year with $12.66B and ended with $9.58B, a 24.83% drop during the year. This was quite different than the previous year. In 2011 cash and cash equivalents began with $7.82 B, but increased by an impressive $4.84B, or 61.9% during the year. Stock price for ExxonMobil (XOM) ended on April 26, 2013 at $88.00. Over a two year period, the
art A: Capital budgeting is the technique of researching investment opportunities in non-current asset which are predicted to be able to produce economic benefits for more than a year (Peterson and Fabozzi, 2002). 2.1 Trends in capital budgeting decision techniques A series of studies have researched on the capital budgeting practices of various companies over the past five decades. More than ten years has passed since the most recent study. This shows that there is a large gap from the latest study in 1999 to the present. More current studies exist for Australia, the UK and US (Arnold and Hatzopoulos, 2000; Burns and Walker, 1997; Farragher et al., 1999; Graham and Harvey, 2001; Ryan and Ryan, 2002; Truong et al., 2008).
We inevitably saw the classical model challenged. John Maynard Keynes ideas caused a shift which saw the Keynesian model come into place in the late 1930s. For many economists, it was the Great Depression that helped the confirmation of Keynes’s ideas. For example, a sudden decrease in aggregate demand was thought that caused the macroeconomic problems. This caused a ‘Recessionary gap’ where a fall in aggregate demand took an economy from above its potential output to below its potential output.