Macroeconomics Fundamentals Brian Aungst ECO/372 September 18, 2012 Reynaldo Vanta Macroeconomics Fundamentals Gross domestic product (GDP) is the value of goods and services that the nation produces and sells in one year. GDP is a good indicator of a nation’s growth. Real gross domestic product is the market value of goods and services produced and sold in a nation’s economy in one year. Real GDP is also nominal GDP adjusted for inflation. Nominal gross domestic product is the value of goods and services that the nation produces and sells in one year that has not been adjusted for inflation.
BUSN 5260 Current Economic Analysis Week 5: Personal Assignment There are Internet questions with this assignment at the end. Problems Problem 1 What is the difference between Gross Domestic Product and Gross National Product? Gross Domestic Product the estimated value of the total worth of a country’s production and services, within its boundary, by its nationals and foreigners, calculated over the course on one year. Gross National Product is the estimated value of the total worth of production and services, by citizens of a country, on its land or on foreign land, calculated over the course on one year. Problem 2 The book details four types of unemployment.
His foreign policy began at the London Economic Conference in 1933 where he made the mistake of trying to lower the dollar value by removing the US from the international gold standard. Then he tried to inflate the value of the American dollar in hopes of getting more money to Americans. This plan eventually made the world economy weaker. After that he did make a good choice by continuing the “Good Neighbor” policy with Latin America. He withdrew the American troops from the Caribbean.
In the same time, the bank of Japan (BoJ) kept its interest rate close to zero. But expectations are not very confident for the USD. In fact, high interest rate leads to an increase in the currency which attracts FDI but it hurts exports. In 2005, the US current account deficit was heading towards USD 800 billion. With such a deficit, the US won’t be able to sustain a strong USD.
Paul Geary 10109099 Project A: Okun’s Law United States 4th March 2011 Above we see the Business Cycle for the United States displaying both the Unemployment rates and the Real Growth GDP in percentage change over the last 30 years. There are clear indicators that the US economy has had clear stages of economic over-cooling and over-heating during the last 30 years. Between 1981-1985 the US economy expanded greatly except for a 4% drop in 1983. This rapid expansion was clearly unsustainable, as we see with the gradual contraction in the size of the economy from 1986 to1992 where GDP was barely 1% and unemployment reached 7%. We see this again from 2004 all the way to 2010 with unemployment increasing to 10%.
Since these options are not recommended, they should reduce their capital spending instead and this is what the board decided to do eventually. Pan Europa had a debt-to-equity ratio of 125% and they had relied heavily on debt financing during the price wars. Now that this period was over, they should focus on the amortization of this accumulated debt and try and bring down the debt-to-equity ratio to an acceptable figure. Pan Europa’s sales had been pretty static since 1990 and some reasons for this were low population growth and market saturation. Even new product introductions had failed for them.
The government then imposed an austerity program and began negotiations with the IMF for a rescheduling of the staggering foreign debt. The plan followed by an autumn international support operation led by the IMF. The Cruzado Plan, which created a new currency (the cruzado), eliminated monetary correction, and froze wages and prices. While inflation plunged to near-zero initially, by mid-1987, it had surged beyond 100%, fueled by increased customer spending due to the price freeze. The careful timing helped avoid impediments to President Cardoso's electoral victory in October over Lula, his left-wing challenger.
The fed has to set a lower reserve requirement, which allows banks to loan out more money, which generates more interest, which could lead to periods of inflation and could have worse consequences if the government does not react quickly enough. Inflation would decrease the purchasing power of an individual's money, which would lead to more saving and less spending. (Fried) Less spending would mean less money being injected into the circular flow of our economy and would lead to economic crisis. However, many critics also use this to determine how national debt does not have a huge impact on the economy. A huge national debt has no effect on the money market.
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.
– 133 2013 net sales / base year 2011 net sales = 800,000 / 600,000 = 1.33 1.33 x 100% = 133% 5. In analyzing financial statements, horizontal analysis is a- tool 6. Comparative balance sheets - are usually prepared for at least two years 7. Assume the following cost of goods sold data for a company: 2013 $1,500,000 2012 1,200,000 2011 1,000,000 If 2011 is the base year, what is the percentage increase in cost of goods sold from 2011 to 2013? – 50% = New - Old Old 100 8.