The diagram above shows that real GDP has increased from Y1 to Y2 which means that economic growth has increased. As a result, unemployment falls as we are getting closer to the inelastic part of the AS curve, which is much needed as “unemployment has shot up” in this economic crisis. However, inflation has risen from P1 to P2 which means that our exports become less competitive so our trade deficit gets worse. However, the rise in inflation is needed as inflation is falling below the 2% target. The changes in the government’s macroeconomic objectives depends on where we are on the AS curve as shown below.
Jones purchase the stock of Smithon outright leaving Smithon intact? The stock should not be purchase by Mr. Jones. Mr. Jones acquiring the assets, liabilities and also would inherit the contractual obligations of the selling corporation, would, be the results of the purchase. In lay terms, he has bought the existing Smithon Corporation and he is responsible of ensuring daily operations run efficiently but the tax aspect of acquisition he is responsible for existing and any future tax liabilities that the selling corporation had. It would be my advice for Mr. Jones to not buy the stock because of the liability of current and future tax obligations which Mr. Jones would incur from the purchase of the stock.
There are different thought processes from the foreign countries, which include the socialist, the democratic, and the totalitarian in how the cash should be spent and separated (Schroeder, Clark, & Cathey, 2011). The legal system is another reason; the legal system is determine and influences by the strength of the county accounting profession. The extent economic developments are influenced by both the development and the application of its financial reporting practices (Schroeder, Clark, & Cathey, 2011). The countries with lower levels of economic development cannot compare to larger countries. Until the foreign countries can compare apple to apples, we will not be able to compare our financial statements.
Due to the preceding factors that contributed to Mexico’s financial crisis it appears the bailout was a correlation not a cause of the short term negative financial impacts on its citizens. It is possible that Mexico would have experienced the hyperinflation and extreme poverty due to its own financial decision making. Having IMF and foreign country bailouts allowed for a long term financial strategy to stabilize the economy and have additional financial decision makers to assist in the countries long term
These factors indicate current and future values of the short-term rates, therefore it creates issue with future long-term rates. Lower rates and positive economic activity adds value to the dollar in oversea markets. Households spending increases, businesses invest in property and equipment, and production leads to new hires. Conversely, when inflation is threatening, the Fed reduces the risk by shrinking the supply (Keynes,
Productivity, as measured by the output per hour by the business sector, grew at a lower rate during the Reagan years than the 7 years prior. The growth rate of 1.3% during Reagan’s tenure was .2% higher than the 6 years afterwards, but .3% lower than the years preceding (Niskanen & Moore 1996). Inflation is an increase in the average price level and is not a positive occurrence. When Reagan took office, the REAGAN-SIDE ECONOMICS consumer price index (CPI) was at a high 13.5%, by the end of his terms, the CPI had been decreased to 4.1% (Niskanen & Moore 1996). Those who are critical of Reagan’s policy speak of the explosion of the United States’ budget deficit during the 1980s.
Swenson’s investment philosophy is based on five principles. First, on the basis that equities outperform fixed income assets. Not only do fixed income assets give lower returns they are affected by rising or highly fluctuating inflation. Exhibit 7 shows that for 2006, the returns for domestic as well as foreign equity were much higher that fixed income, which showed negative returns. Swenson has referred to actual cumulative long-run returns of stocks vs.
Not only will the massive amounts oil produced from this area have an effect, it is estimated to create anywhere from 250,000-735,000 jobs. Just for a reference as to how much this will boost the economy, since 1977 the North Slope oil development has pumped 500 billion dollars back into the economy. This is now slowly running out of resources considering it reached its peak production in 1980; however to continue boosting the economy more exploration needs to be done. (source 2) Action needs to be taken immediately because from the date of approval to exploration it takes anywhere from 7-12 years until the first barrel of oil is recovered. (Source 1/3) The 16 billion barrels of oil that lie untapped there would be more than enough to replace the oil Americans would purchase from Iraq for over 58 years.
One effect of hydraulic fracturing on economics is that it creates a huge increase in profit for natural gas sellers and drillers by opening up the opportunity to tap so much more natural gas than was available before. “North America has approximately 4.2 quadrillion (4,244 trillion) cubic feet of recoverable natural gas that would supply 175 years’ worth of natural gas at current consumption rates.” (Earthworks, N. Loris) Another way it affects the economy is that 10,000 jobs could be created by each drilling site that is opened. (N. Loris) However, a negative effect it has is that it costs about 2 billion dollars for each plant and extra for maintenance and disposal. One last affect hydrofracking has on the economy is it lowers natural gas prices by up to 15 dollars a gallon.
Fifty billion dollars is a lot of money when it comes to our economy now days. ANWR has enough oil, in fact nine to sixteen billion gallons, producing 1.1 million barrels a day for the next 25 years (NPR). Producing that amount of oil, and keeping all the spending money in side of the united states, and receiving money from people who might purchase our oil, would lead the economy to take a step forward, instead of staying in the same spot. Drilling in America would also lower the oil prices, which seams obvious. If we drill here, as I have stated, we spend less money; by spending less money, we can keep more money here from taxes and shipping costs, lowering the prices at the pumps, because the oil companies will not be getting taxed as much, leaving them room to drop the prices.