Recommendation for the Current Economic Recession

In: Business and Management

Submitted By tinky
Words 1119
Pages 5
1st off, tell your teacher the President has nothing to do with interest rates. The Fed (Federal Reserve or Central Bank) controls that.

The Fed would LOWER interest. If that fails, they would increase the money supply http://www.investopedia.com/terms/q/quan...

The President MAY, on advice, ask Congress to INCREASE spending, using the money the Fed has bought Treasury securities with, to stimulate the economy. You NEVER ever raise taxes during a recession.
-------------
If he wants not to lose his job by turning USA into a non-market, Government controlled economy, he should allow the Federal Reserve Board to deal with interest rates: whether or not the Fed succeeds in increasing employment by reducing interest rates is not the President's concern. 2. President's focus should be on how by the Government's legitimate actions, the spending power of the households and businesses can be increased. It seems that he has no choice but to continue the stimulus spending for another year. But that alone may not help sustain fall in unemployment rate. He must reduce taxes at the lower levels of income drastically and reduce the corporate tax rates for the next two years so that their effective disposal income increases and they buy more locally produced goods and invest in capacity to produce more. Of course, reducing taxes would mean, the Government will have a larger deficit and high deficit can cause problem of inflation later besides making it costlier for private firms to borrow for their capital projects that create employment. Therefore President should do well to cut certain government expenditures drastically to contain the deficit and further growth of government debt. He must understand that if the expenditure on research and development or on health care or military activities is kept constant or reduced for two years, the heavens will not fall.…...

Similar Documents

Current Economic State

...Current economic state Santiago Avila, Jr. FP/120 December 14, 2012 Raouf Benhadj, MSc., MBA, PMP Current economic state Knowing the state of the economy is beneficial to people in general. People tend to make financial decisions based on current rates and financial income. By knowing the current market and the state of the economy, the public will be better prepared and be informed before making important financial decisions, like buying a house. The current economy is contracting instead of expanding. While, there was an expansion from -2.6% in 2009 to 2.8% in 2010, the economy shows a contraction from 2.8% in 2010 to 1.7% in 2011 as shown below in figure 1. Staying aware of a contracting and expanding economy can be beneficial because it will help in making decisions on whether or not it is a good time to spend money that was saved for luxuries instead of saving the money for future necessities. Country | 1999 | 2000 | 2001 | 2002 | 2003 | 2004 | 2005 | 2006 | 2007 | 2008 | 2009 | 2010 | 2011 | United States | 4.1 | 5 | 0.3 | 2.45 | 3.1 | 4.4 | 3.2 | 3.2 | 2 | 1.1 | -2.6 | 2.8 | 1.7 | Figure 1 Another important information to know in determining the current state of the economy is the WSJ Prime Rate. As of December 12, 2012 the WSJ Prime Rate is 3.25% as shown below in figure 2. This rate is used to determine current interest rates on loans and credit cards. The lower the WSJ Prime Rate the better the odds are of receiving a better interest rate. ...

Words: 1099 - Pages: 5

Current Economic State Paper

...Current Economic State Paper Jackson Kimberly FP/120 February 26, 2013 Kmiec Stephen Current Economic State Paper Introduction: This current economic state paper will explain if the current economy is expanding or contracting and reasons for that. It will also discuss the current prime rate, current interest rates on credit cards, current unemployment rate, and the current Gross Domestic Product (GDP). The economic factors that had led to a fairly good third quarter were only temporary and there was proof that the economy was slowing down in the last months of 2012 due to the skepticism over the impending fiscal cliff. Also, Hurricane Sandy that hit in late October 2012 was to have somewhat of a negative impact on the economy. There were clues that the economy may have actually slightly contracted instead of expanding. “The United States economy reversed course in the final quarter of 2012 and contracted at a 0.1% rate and was the worst performance since the financial crisis in 2009.” (Mataconis, 2013) . Even with the overall contraction, the economy is not on the brink of a recession or an extended slump. Companies are still spending. The economy we have been living in since 2009 is going to be the new normal. The prime rate is the underlying index for most credit cards, home equity loans and lines of credit, auto loans, and personal loans. The current prime rate is 3.25%, federal discount rate is 0.75%, fed funds rate is 0.25%, and the 11th District cost of......

Words: 559 - Pages: 3

Current Economic News

...Governments want to make companies have ownership of there misleading claims that can have detrimental effect on the consumer and to keep the companies from setting there product prices at extreme levels. Harvard Referencing Microeconomics - Economies and Diseconomies of Scale. 2012. Microeconomics - Economies and Diseconomies of Scale. [ONLINE] Available at: http://tutor2u.net/economics/revision-notes/as-marketfailure-government-intervention-2.html. AmosWEB is Economics: Encyclonomic WEB*pedia. 2012. AmosWEB is Economics: Encyclonomic WEB*pedia. [ONLINE] Available at: http://amosweb.com/cgi-bin/awb_nav.pl?s=wpd&c=dsp&k=oligopoly,+characteristics. Apple to refund Australians over 'false' iPad 4G | Tablet PC & iPad News | News.com.au | News.com.au. 2012. Apple to refund Australians over 'false' iPad 4G | Tablet PC & iPad News | News.com.au | News.com.au. [ONLINE] Available at: http://www.news.com.au/technology/tablets/bad-apple-watchdog-bites-tech-giant-over-ipad-4g-claim/story-fn6vigfp-1226311693352. Hubbard, Garnett, Lewis, O'Brien, G, A, P, T, 2009. Essentials of Economics. 1st ed. Australia: Pearson Australia...

Words: 810 - Pages: 4

Current Uk Economic Conditions

...Section B - Current UK Economic Conditions Information and definition UK The United Kingdom of Great Britain and Northern Ireland is also known as UK, United Kingdom or Britain. United Kingdom is a member of European Union, G 8, G-20, World Trade Organization, Common Wealth of Nations, United Nations Security Council, NATO, Organization for Economic Cooperation and Development (OECD). United Kingdom is a well developed country. It has a rich economy brought up by economies of its individual countries England, Scotland, Wales and Northern Ireland. Landon which is the capital of UK and England is the most important financial center for international business and commerce. UK is one of the most important globalised countries of the world. GDP GDP, or Gross domestic product is a measure of a country's economic activity, namely of all the services and goods produced in a year. It is arguably the most important of all economic statistics as it attempts to capture the state of the economy in one number. Quite simply, if the GDP measure is up on the previous three months, the economy is growing. If it is negative it is contracting, and two consecutive three-month periods of contraction mean an economy is in recession. GDP is based on a huge survey of businesses and government departments compiled by the Office for National Statistics. Credit rating The BBC News explains that “Credit ratings are issued by credit rating agencies, private companies who sell their financial......

Words: 1186 - Pages: 5

Current Economic and Banking Matters

...improved governance and concerted action to resolve structural bottlenecks, especially in infrastructure sector. Output gap is likely to reduce, but remain negative. • Headline inflation is likely to remain range-bound in 2013-14, with some further moderation in H1 due to subdued producers' pricing power and falling global commodity prices, before it increases somewhat in H2 largely due to base effects. • Reserve Bank's survey of outside professional forecasters shows anticipation of a modest recovery with growth in 2013-14 at 6.0 per cent from 5.0 per cent and average WPI inflation to moderate to 6.5 per cent from 7.3 per cent. Surveys show that inflation expectations have moderated slightly, while business expectations remain subdued. Global Economic Conditions Global growth likely to stay sluggish, commodity price inflation soft • Global growth turned weaker in 2012 and is expected to stay sluggish in 2013. Fiscal adjustments will drag growth down in advanced economies and delay cyclical recovery in emerging market and developing economies. • Outlook for global commodity prices, including metals and oil, remains benign. It should help reduce imported inflation, subject to broadly stable exchange rate. However, some risks remain from the large and continuous doses of quantitative easing. 2 • Global financial market conditions have improved as a result of unconventional monetary policy easing and supportive policy actions. However, tail risks remain significant, calling......

Words: 1284 - Pages: 6

2008 Us Economic Recession

...INTRODUCTIONS The Global Financial Crisis of 2008 is considered by many economists to be the worst financial crisis since the Great Depression of the 1930s. It resulted in the threat of total collapse of large financial institutions, the bailout of small and big banks by national governments, and downturns in stock markets around the world. In United States, the housing market also suffered, resulting in evictions, foreclosures and prolonged unemployment. The crisis played a significant role in the failure of key businesses, declines in consumer confidence, declines in consumer wealth estimated in trillions of US dollars, and a downturn in economic activity leading to the 2008–2012 global recession and contributing to the European sovereign-debt crisis. The bursting of the U.S. housing bubble, which peaked in 2006, caused the values of securities tied to U.S. real estate pricing to plummet, damaging financial institutions globally. Economies worldwide slowed during this period, as credit tightened and international trade declined. Governments and central banks responded with unprecedented fiscal stimulus, monetary policy expansion and institutional bailouts. In the U.S., Congress passed the American Recovery and Reinvestment Act of 2009. In the EU, the UK responded with austerity measures of spending cuts and tax increases. Causes of Financial Crises Subprime lending During a period of intense competition between mortgage lenders for revenue and......

Words: 1696 - Pages: 7

Global Recession, Oil Sector and Economic Growth in Nigeria

...Asian Transactions on Basic and Applied Sciences (ATBAS ISSN: 2221-4267) Volume 01 Issue 06 GLOBAL RECESSION, OIL SECTOR AND ECONOMIC GROWTH IN NIGERIA. BY S. O. OLADIPO (M.sc) Department of Economics and Accounting Bells University of Technology, Ota. E-mail address: giftsamniyo@yahoo.com AND PROF. J. O. FABAYO Department of Economics, Obafemi Awolowo University, Ile-Ife ABSTRACT This study investigates global recession and the oil sector, based on its effects on economic growth in Nigeria. No doubt the global economy has been experiencing some disturbances. Major economies of the world have been affected and so has the major sectors of these economies especially the ones that has a direct bearing with international trade been affected. The oil sector particularly has been one of the hit. For a country like Nigeria whose international trade is majorly in oil, the effect has become an issue. Empirical analysis using the Ordinary Least Square (OLS) reveals that there was a negative relationship between GDP and oil produced (domestic consumption and export) which is significant at 5% lever of significance i.e. (P < 0.05). The result also showed that there exists decline in the oil sector due to the global recession despite all measures given by government to curb it effects. It was Jan 2012 recommended that the federal government needs to deregulate the sector for efficient performance, and also come up with more rigorous policies that will reduce this effects on the real......

Words: 5684 - Pages: 23

Public Goods Provision in China---Current Situations and Recommendations

...Public goods provision in china---current situations and recommendations 1. Definition of public goods According to public economics, social products are divided into public goods and private goods. The former has been divided into pure public goods and quasi-public good.The pure public goods are these social products having complete non-competition andnon-excludability features.  Non- competition means that an individual’s consumption on public goods will not hinder others’ consumption on public goods; non-excludability means that public goodsconsumption can’t exclude the non-payers or the exclusion is given up due to its high cost. Quasi-public goods are these social products with incomplete non-competition and on-excludability. Private goods refer to the social products occupied and enjoyed by individuals and have competition and exclusiveness. Because of this feature of public goods, free riders occur and result into market failure. Thus the invisible hand cannot reach the Pareto efficiency of public good market, which means the government needs to arrange for the provision of public goods. 2. Current situation in China China has experienced many times of explorations and practices in provision of public goods. Before the reform and opening up, our country implemented a pure planning economy mechanism. During that time, our central government was responsible for the whole supply of both public goods and private goods in China, which turned out to be a......

Words: 822 - Pages: 4

Economics Current Issues

...Current Issues Final Portfolio “One definition of an economist is somebody who sees something happen in practice and wonders if it will work in theory.” – Ronald Reagan. Is there any better way to sum up the past four months in Econ 404W: Current Issues? Day after day we performed experiments to see first hand how certain economic theories and phenomenon work in practice, and afterwards try to understand how the theories relate. Throughout the semester, we participated in 27 games/experiments that covered a wide range of economic theories and principles. Of all the different concepts that have been discussed, two have stood out time after time. These are backward induction and the free riding problem. The first experiment that used any sort of backward induction was Network Externalities. In this experiment my strategy was to think as a group of people would, rather than how I would personally, and act in the first round to maximize profits. Each decision, as simple as the two choices were, had one choice that I believed would appeal more to the rest of the class, regardless of what my personal preference was. One round, for example, had a choice between a blue and white paper and a red and white paper. As appealing as the red and white was to me, I knew that a class of Penn State students would clearly choose the blue and white as opposed to the aesthetically repulsive colors of Ohio State. Thinking of how others would act allowed me to get into the superior...

Words: 1823 - Pages: 8

Economic Recession: Causes and Effects

... Economic Recession: Causes and Effects Student’s Name University Affiliation Economic Recession: Causes and Effects An economic recession is a slowdown in economic activities such as employment, distribution, production, real income and real GDP. The 2008-2009 economic recession was the longest in duration and deepest in contraction since the great depression of 1929-1932, (Roberts, 2009). Its causes were mainly preventable through a series of legislations and so it can be avoided in the future. This paper champions the thesis that the recent economic recession was largely avoidable, but the application of inappropriate economic strategies as presented below caused its occurrence, and has so far had overarching effects on the world. According to (Simpson, 2009), the recession was the direct and unavoidable result of the credit boom that preceded it. First, the credit boom was partly a result of low interest rates that lasted too long, facilitated by governments and their central banks. This resulted in the build-up of a credit bubble. Secondly, governments failed in the role of regulating the credit market. This encouraged borrowing of those who were least able to repay, resulting in an increase in demand of properties, (Bessler, Leatham and Zhang, 2006). Once demand had risen, property prices went up, attracting more investors into the market. Then the desire for profit was overtaken by the fear of loss as the market was......

Words: 769 - Pages: 4

Current Economic Expansion

...U.S. economic growth has been positive during 25 of the past 26 quarters. The National Bureau of Economic Research (NBER) declared that the recession that began in March 2001 ended in November 2001. As of the first quarter 2008, U.S. real GDP (measured in 2000 dollars) was about 18% above its recession low point in the third quarter 2001, and had grown about 20% from its previous high near theend of the 1991-2001 expansion. According to the most recent GDP report, growth in the second quarter of 2008 was at an annual rate of 1.9% up from 0.9% in the first quarter. During the four quarters of 2007, the annualized quarterly rates were 0.1%, 4.8%, 4.8%, and -0.2%. During the four quarters of 2006, the quarterly rates were 4.8%, 2.4%, 1.1%, and 2.1%. Growth excluding inventories during the first quarter of 2008 was positive at an annual rate of 0.7. The rise in payroll employment peaked in December 2007. Since then, it was dropped by some 500,000. The unemployment rate is also on the rise and it July stood at 5.7%, up from an expansion low of 4.4% first reached in October 2006 and 4.5% in May 2007. Over the past 18 months, the unemployment rate has varied between 4.4% and 5.5%. These rates are still above the 3.8% low of the 1990s expansion. Measured or headline inflation has accelerated. As measured by the Consumer Price Index (CPI) it rose 5.6% for the 12 months ended in July 2008 compared with 2.5% during 2006 and 3.4% in 2005. The rise in the core rate for the......

Words: 341 - Pages: 2

Current Issues Economic

...Current Issues Assignment- Economic/Financial India and China announce trade deals during Xi’s visit to Delhi The article demonstrates China’s interest in investing $20 billion in India and providing its companies with greater access to key Chinese markets (Burke 2014). The agreement formed between the two nations is an international trade agreement, which involves the cooperation of both China and India towards reducing trade barriers (Fletcher and Crawford 2011, 60). China has proposed to provide India with financial foreign aid, in the form of $20 billion over the course of five years to develop and modify industrial parks and railways, with the intention of further developing Asia as a prosperous continent (Burke 2014). In return, two of India’s largest banks have agreed to extend their line of credit by $1 – 1.8 billion for projects including those importing Chinese products. Axis Bank, a private lender in India signed an agreement with China Developmental Bank to help Chinese companies in India (Burke 2014). This shows how the agreement between both countries results in the decrease of trade barriers, which are restraints on the flow of international goods or services (Fletcher and Crawford 2011, 62). Although this preferential trading agreement between the two most populous countries in the world is intended to provide both nations with prosperity, it is essential to consider the factors of the trading environment. Trading environment factors are......

Words: 299 - Pages: 2

Analyzing Current Economic Issues

...Analyzing Current Economic Issues Summary: Canada’s Exports Need to Be Reoriented to the New Global Economy, Says Bank of Canada Governor Mark Carney (Source: Bank of Canada) This article focuses on the reasons behind the downturn of the Canadian economy. Mark Carney believes that the combination of overexposure to the U.S. market and underexposure to faster-growing emerging markets is almost entirely responsible for Canada’s further loss in world market share over the last several years. The article also talks about what actions Canada can take in order to bring our economy back up, and how we should invest in our greatest resource, which are our people Summary: Canada GDP: July 2012 Saw 0.2 Per Cent Jump, Decline in Mining, Oil and Gas (Source: HuffPost Business) During the month of July, 2012 Canada has seen a 0.2 percent decline in its mining, oil and gas extraction. When looking at the different types of sectors, the manufacturing sector performed well with a 6.9% increase along with wholesale trade increase by 0.2%. Although Canada’s output has increased by 1.9%, its weakness still lies in the export sector with a $2.9 billion trade deficit for the month July. Summary: Unemployment rate holds steady at 7.4% (Source: CBC NEWS) According to Statistics Canada, Canada’s unemployment rate remained at 7.4% in October. In addition, October’s unemployment in 7/12 provinces and territories has increased especially in P.E.I with the highest unemployment rate......

Words: 1561 - Pages: 7

Economic Recession

...Economic Recession Ministry spokesman Shen Danyang said China's inbound foreign investment had been relatively stable against the backdrop of shrinking global investment amid economic recession. "The inbound foreign investment growth has been positive for three months in a row, indicating China's economic competitiveness and foreign investors' confidence in the country," Shen said. According to a latest report by consulting firm KPMG, China has become the top destination for sourcing among multinational companies outside their home country with these companies moving more of their research units close to production bases. However, the investment outlook remained murky as China's overall economic performance in recent months fell short of expectation and pointed to a fragile recovery, analysts said. "China's economic recovery has been softer than expected since March, which may discourage foreign investment in the short term," said Li Maoyu, an economist at Changjiang Securities Co. China's gross domestic product expanded 7.7 percent from a year earlier between January and March, weakening from the pace of 7.9 percent in the final quarter of last year. The World Bank recently lowered its projection of China's growth this year to 8.3 percent from the previous 8.4 percent, citing risks in the property sector, financial system and local government liabilities. During the January-April period, investment from the 27-member EU rose 29.7 percent to US$2.5 billion, while......

Words: 316 - Pages: 2

Eco 372 Economic Recommendations

...Economic Recommendations August 7, 2012 ECO/372 In December, 2007, an economic downturn began. A recession ensued and by September, 2008, it earned the name of the Great Recession (Yglesias, 2011). The unemployment rate, declining values in the housing market, increasing foreclosures, bankruptcies, the swelling federal debt, increasing food prices, and multiplying fuel prices demanded an economic response through fiscal policy and monetary policy. As a result of those responses, the United States is in a slow recovery phase. An analysis and recommendation of the current economic state includes an observation of the proprietorship of policy interventions. Economic Factors and the Impact on Aggregate Supply and Aggregate Demand Unemployment The current unemployment rate is 8.2% which is essentially unchanged from the previous month of 8.3%. There were 163,000 new jobs added in July. The government reports 9,000 fewer jobs, and the private sector lists an increase of 172,000 on the payroll. In contrast to these figures, the job deficit in comparison to the employment numbers prior to the recession is 9.7 million. At this pace, it will take 10 years to return to full employment. The unemployment rate is shifting the aggregate demand to the left. This is due to less spending power of the consumer. Output will follow shifting short aggregate supply downward. Long aggregate supply remains vertical. Expectations The central bank......

Words: 1718 - Pages: 7

Computer and Philippines Inc. - 5708 Words | Скачать | importance of education - 496 Words