This website uses cookies to ensure you have the best experience. Learn more

Economic Advisement Paper: Option 1

1508 words - 7 pages

Economic Advisement Paper: Option 1
ECO/372
September 15, 2014

The United States economy is currently recovering from a recession that occurred in 2007. While this society is on a steady incline to forget what happened, it was a traumatic time for many Americans. As economic advisors, it is critical to evaluate factors such as unemployment, expectations, consumer income, and interest rates. By analyzing these elements, we are able to determine how each affects aggregate supply and demand. We also developed a set of recommendations for the U.S. president regarding government spending and taxes based on the economic factors’ current state. This will help to better understand all ...view middle of the document...

Normally there is a negative relationship between aggregate demand and the price level."
Unemployment is another factor that could reduce the supply of labor in the economy (as unemployed people become discouraged and stop looking for jobs). This, again, would shift the aggregate supply curve to the left. Also employers may use the threat of unemployment to cut wages. People in general would be more desperate for a job and be willing to work for less. There is then an excess supply, which is reduced by closing factories and further increasing the number of unemployed.
Consumer income refers to the amount of income remaining after taxes, and cost of living expenses have been deducted from an individual’s wages. (Businessdictionary.com, n.d.) Economists have struggled to understand what factors have the most influence on consumer spending. Economic experts say consumer confidence makes up approximately two-thirds of the aggregate demand based on changes, buying, spending trends, and economic conditions, (Scheid, 2010).
High gas prices, interest rates and income taxes are examples of factors that could have an impact on the economy because when a household has less income this means there will be fewer purchases, and saving becomes very important. A family’s disposable income can increase or decrease aggregate demand. When the economy falls there is the possibility that jobs will be lost and salaries will decrease. Businesses and individuals that pay taxes tend to change their spending behaviors based on their disposable income.
Economic downturns affect everyone during the time when the economy is down; households will search for discounts and purchase cheaper brands. Consumers feel less able to provide for their families when items that they normally purchased consistently increase in price. When demand is lower businesses tend to charge higher prices for their products that were cheaper when the economy was good.
The nations income can be explained using the aggregate demand –aggregate supply model (AD-AS). Economists believe that the AD-AS model will reflect the affect the national economy had on income at its current price. It is important to understand that the components of the AS-AS model tend to respond differently to the changes in price, (Colander, D. C., 2013).
After the data from this model has been analyzed the factors will show how to quantify the impact and have a means of predicting the future outcome of business and individual consumers. (Mincey, n.d.)
However, today’s economy appears to be in a recessive state upon evaluation. The average US resident is spending more money than they produce by way of employment that has created a higher debt to income ratio and has an overall affect in the investments made, affecting economic interest rates of aggregate supply and demand. The federal government has great influence on the interest rates since it is America’s biggest borrower. Today’s interest...

Other Papers Like Economic Advisement Paper: Option 1

Economics Essay

1809 words - 8 pages ซึ่งสังคมไทยในสมัยนั้นไม่ค่อยได้เน้นเรื่องการศึกษาเท่าไรนัก ซึ่งเกิดปัญหาตามมาภายหลัง คือความเหลี่อมล้ำทางด้านการกระจายรายได้ แล้วต่อมาจึงค่อยมีนโยบายเน้นการพัฒนาคน เมื่อเห็นปัญหาที่เกิดขึ้นแล้ว เป็นต้น ซึ่งจะทำให้การเจริญเติบโตทางเศรษฐกิจของประเทศเป็นไปได้ช้ากว่าประเทศเกาหลีใต้ Term paper การพัฒนาเศรษฐกิจ(Economic Development) 01101311 ความเจริญเติบโตทางเศรษฐกิจของประเทศเกาหลีใต้เปรียบเทียบกับประเทศไทย 2 ธันวาคม 2555 ธนวัต เกตุสิน ภาคผนวก

Case Questions Essay

253 words - 2 pages Case Questions for April 10, 2010 Discussion Questions for Birch Paper Company Answer each of the following questions independently. 1. Which bid should Norhern Division accept? 2. Should Thompson Division lower its price? If so, to what? 3. What should the Commercial V.P. do? Case 23-5, Berkshire Industries 1. Were Berkshire’s motivations for a new incentive system reasonable? If so, what were their main options for a new

Getting The Grade

1178 words - 5 pages other markets and gaining access wouldn’t be that hard. “Europe, South America, and China have been very receptive to Ford vehicles and the company is doing very well in these markets.” Ford Motor Company, (2011, p. 1). In light of the possibility that market conditions can and do change, discuss at least three examples of how the company should build-in flexibility to back-up its decision making process. One method would be to have option based

Behavioral Finance

392 words - 2 pages the investors in the second category will choose to keep the money and reject the option of tossing. http://www.forbes.com/sites/sap/2011/06/29/mental-accounting-explains-why-you-buy-things-you-dont-need/ https://www.google.co.in/url?sa=t&rct=j&q=&esrc=s&source=web&cd=6&cad=rja&uact=8&sqi=2&ved=0CEQQFjAF&url=http%3A%2F%2Fintroduction.behaviouralfinance.net%2F&ei=Ji72U536BY_p8AWB9ICYBw&usg=AFQjCNFSJAzZPU6gylUH0IeMyS5rWTSA4g&bvm=bv.73231344,bs.1,d.dGc

The View Of College Students On Love

2055 words - 9 pages wrong realization on love, which lead them to get lost in it. This paper introduces an investigation on the theme in detail. Key Words college students; love; view; research; Analysis of the problems 1. Respondent part We uploaded our questions to a Questionnaire website, then sent messages to our middle school friends and college mates to request for filling it out. During a month’s time, about 200 people filled it out

Baeper

500 words - 2 pages of economic collapse, President Obama declared that ‘dropping out of high school is no longer an option. It's not just quitting on yourself, it's quitting on your country--and this country needs and values the talents of every American.’ … In many of the country's largest urban school districts, such as Detroit, Cleveland, and Indianapolis, the dropout rate is as high as 60 percent, and rates are similarly high in many rural areas. A generation

Living Paycheck To Paycheck

615 words - 3 pages guidelines. Writing the Final Paper The Final Paper: 1. Must be eight to ten double-spaced pages in length (not including the title and reference pages), and formatted according to APA style as outlined in the Ashford Writing Center. 2. Must include a title page with the following: a. Title of paper b. Student’s name c. Course name and number d. Instructor’s name e. Date submitted 3. Must begin

Hyperinflation In Zimbabwe

1482 words - 6 pages able to consume necessary goods such as milk, bread, toilet paper. This report strives to aim towards the Zimbabwean government, taking a look at the way they have chosen to respond to this constantly increasing problem. The government will agree that this economic condition has been caused by their decision made way back in 2000 to print excess money and they continue to do so time after time, which has eventually resulted into depreciation of the

Basic Toeic

672 words - 3 pages Basic TOEIC (on-line) Paper 1 2015. Spring. 1. Survey participants indicated that the dictionary is rather complicated in its structure but very informative. 2. The brand value of S&B Cosmetics over the past two decades has exceeded shareholders’ expectations. 3. Consumer confidence tends to decrease during times of economic instability. 4. Wireless Internet is one of the most remarkable

Lee Jeans Case Study

3895 words - 16 pages Table of Content 1. Executive Summary…………………………………………………………………………P.1 2. The Challenge………………………………………………………………………………..P.2 3. Situation Analysis……………………………………………………………………………P.3 3.1 PEST Analysis……………………………………………………………………………P.4 3.2 SWOT……………………………………………………………………………………..P.5 4. Market segmentation………………………………………………………………………P.6 5. Market Positioning………………………………………………………………………….P.8 6. Alternative Marketing Strategy…………………………………………………………….P.9

Can Small Developing Countries Survive In A Globalised Environment

3615 words - 15 pages  Globalization? Paper  available online at http://salises.mona.uwi.edu/sa61a/globalization%20and%20the%20cbb.pdf  2 Page 5       markets. Insularity and remoteness also give rise to problems with transportation of goods. The export cargoes from these islands tend to be small and fragmented and therefore would call for higher per unit shipping costs. Also, the option for road transport for smaller shipments is not available to the island states

Related Essays

Putin Hls Advisor Essay

1019 words - 5 pages unimpeded. (1) In this scenario you can concentrate on winning the hearts and minds of the remaining 50% of the population in Ukraine in order to complete the ultimate goal. In conclusion a mix of both Hard and Soft Power or “Smart Power” would be the best option to getting this conflict resolved. The soft power would be the diplomatic negotiations with the UN and the ability to win over the hearts and minds of the Citizens in Ukraine. The portion of

Eed 430 Week 5 Assignment Integrated Unit

355 words - 2 pages This work of POS 355 Week 2 Discussion Question 1 contains: Discuss something in week 2's textbook reading that you found interesting and/or which resonated with you. General Questions - General General Questions POS 355 Week 1 Individual Assignment Memory Management Paper For this assignment, you will choose one the following options: ·  Option 1: Write a 2-page paper that explains memory management

Domestic And Global Marketing Essay

1907 words - 8 pages Domestic and Global Marketing Marketing MKT/421 Assignment 5, Domestic and Global Marketing • The present assay will review the meaning of domestic and global marketing as interpreted by the current author from course reading and online research. The paper will open with a description of domestic and global marketing taken from sources he has pulled from the internet for comparison. The author will discuss how these two types of

Forecasting Methods For Managers Essay

275 words - 2 pages have selected is correct. So select only one answer. There are 30 questions on this paper. Each correct answer will gain 1 mark. If you make a mistake, correct the mistake and make sure that your final choice of answer is clearly indicated. If your answer is not clear then marks cannot be awarded. At the end of the test hand your completed Answer Sheet and this Question Paper to the tutor. To prevent cheating, there are many