In addition the interest on the debt alone was £9 million per year. All of this made it clear to Pitt that something had to happen to try to escape from the mess the government was in. In the 18th century there was a serious problem with people smuggling goods such as tea and tobacco into the country. This was to avoid the duty tax on products, which gave them a huge profit margin. This profit margin made the risk worth taking for many, resulting in the government losing money due to be not paying duty tax.
Current macroeconomic issues 2.1 Steady growth GDP can be seen as “the total annual output of goods and services on which aggregate demand is spent” (Sloman, 2008, p.277); it can be calculated as the sum of consumer spending, investments, government spending and balance of import and export. 2.1.1 Current issue UK has a fluctuant GDP since 2009. There is both positive and negative growth in the recent years (Trading Economics, 2013). GDP of UK shrank by 0.3% at the end of 2012, which is mainly attributed to drop in mining and quarrying industry, after maintenance delays at North Sea oil field. Manufacturing is another sector that causes the negative growth in GDP; it has decreased by 1.5% than the year before.
Running head: The Economy, Monetary Policy, and Monopolies The Economy, Monetary Policy, and Monopolies Shalanda Massenburg Professor Lloyd Amaghionyeodiwe ECO100 December 4, 2012 Analyze the current economic situation in the U.S. as compared to five years ago. Include interest rates, inflation, and unemployment in your analysis. The United States is the most advanced countries in the world. There has been a downfall in the number of houses being sold; interest rates have hit rock bottom, and a record weakening in the federal budget balance. All this is due to the downward fall in the economy.
Despite this, net income and income from continuing operations both dropped sharply in 1980. Which item on the income statement was most responsible for this drop in income? Net income dropped significantly from U.S. $37 millions in 1979 to -U.S.$225.2 millions in 1980 attributed to the two factors. The most crucial factor was the rise in cost of goods sold. In 1980, with the influx of North Sea oil, the pound appreciated strongly relative to currencies in which Massey sold its products.
However, the SPH program put a lot of pressure on store managers and sales. Consequently, a large group of the R&R associates sued it for “working off the clock” in 2010. This lawsuit might cause reputation damage, and the settlement could be up to $200 million. In 2008-2009 before the case, there was an economic recession. The whole luxury goods industry in the U.S. dropped over 14%, and R&R revenues declined 10%.
Causes Analysis: As to external issues, there are mainly three reasons causing overall industry downturn. Firstly, the nightmare of 9/11 deeply stroke customers’ confidence in traveling, leading to a drastic price cut. Secondly, many uncertainties, such as geographical climate, terrorism, terrifying virus, and increasing fuel prices, also gives great pressure to this industry. Thirdly, a fierce competition among three biggest players also gave great buyers’ power. The industry wide capacity is growing much faster than the demand growth.
Unemployment Unemployment has become a part bigger part of our economy over the years. The great recession that lasted from 2007-2009 contributed a higher rate of unemployment after the collapse of some of our highest financial institutions. It has impacted our economy a lot stronger than during the other financial crises. House values went down, and no one could afford to pay for their mortgages after they lost their jobs. Some stores experienced lower sales and started to close down their stores which led to even more unemployment.
Monetary and Fiscal Policy actions will take some time to affect measurably other markets. A decline in the real Gross Domestic Product of 6.2 percent annually in quarter 4 of 2008, was reported by the Commerce Department. Most categories of final sale products contributed to the decline. Jobless trends of November and December continued in January wherein businesses trimmed 600,000 positions. Recent indicators display worsening conditions as mid January new unemployment claims have increased.
One of the most well known ways that the government has gotten us into this shape would be how they take away Medicare and Medicaid from the older generations to increasing the cost to go to college for the younger generation ( Jonus, 2012). The prices of gas and groceries have been on an up rise for years now and are steadily going up. This puts so much stress on the common day American that their trust in the government has diminished. When you turn on the T.V and see these politicians going on big vacations and riding around in nice fancy vehicles you start to wonder to where your hard earned money goes. It is really hard to fully grasp the idea that our government is doing the best for us and to stay calm while our country falters at the seams day by day.
External Environment 1. Economic factors such as economic growth, interest rates, and exchange rates can all have a huge effect on the profitability of a company. Everyone knows that interest rates and exchange rates all effect consumer spending, especially for luxury items. Harley Davidson products are considered unnecessary or luxury items so they take the biggest hit. With the recession scare as well, Harley Davidson is definitely struggling a bit at the moment.