Economic Analysis

1834 words - 7 pages

Economic Analysis1.0 AbstractIn this assignment I tried to determine what is fiscal and monetary policy carried out by a government and its positive and negative effects. Also some imperfections of using the real GDP in the evaluation of a country’s economy. The effects of unexpected inflation rate to the borrower or lenders. And finally the effect of falling gas price in the demand of large cars and increase of beef price to chicken price.2.0 Fiscal and monetary policy in short-run stability of real GDP and prices2.1 IntroductionDuring the economic instability there are few negative impacts will be appeared in the economy of a country. For instance, a rise of unemployment, increase of government borrowing, decline in stock markets and share prices, high inflation and short of investment, increased price, fall of household income etc. Literally, down-turn is a decline in a country’s real GDP growth for two or more consecutive quarters of a year and is a phase where profits, employment, investment spending and household incomes experience a regular fall-down. Real GDP is the number reached by valuing all the productive activity within the country at a specific year's prices. When economic activity of two or more time periods is valued at the same year's prices, the resulting figure allows comparison of purchasing power over time. To stabilize the country’s fall of real GDP the government can implement “short-run” using two main tools, such as fiscal policy or monetary policy. In economics concept, the “short-run” is a period of time in which the quantity of at least one input is fixed and the quantities of the other inputs can be varied whereas the long run is a period of time in which the quantities of all inputs can be varied. There is no fixed time that can be marked on the calendar to separate the short run from the long run. Most of the time, the short-run policies can be carried out by the government to get out of sudden difficulties of the country’s economy.2.2 Fiscal PolicyFiscal policy involves planning government spending and taxing to influence economic conditions. Both tax laws and government expenditures affect the disposable income of consumers and corporations and, therefore, the level of aggregate demand in the economy arises. For example, taxes affect the incentives that people have to save and invest, and thus affect future economic growth. Tax laws affect firms’ after-tax returns on their investments and thus help determine how a firm will invest today in order to generate future cash flows. In the case of fiscal policy, there will be some lags in its use. For instance, the government has to have some time to realise that there is recession going on in its economy. First of all, economic data will take time to collect and analyse. So then the recession will be recognised after few months after it begun. Secondly, recognising its economic recession the government also needs to take...

Find Another Essay On Economic Analysis

Understanding OPEC: An Economic Analysis

1328 words - 5 pages Understanding OPEC: An Economic Analysis In the last few months, much has been said of Iraq’s invasion of Kuwait in 1990. Interestingly enough, one of Iraq’s motivating factors was economics. Kuwait provided Iraq with a pretext for war as it violated the economic policies of the Organization of Oil-Exporting Countries by exporting oil above its quotas. This is but one chapter in the complicated history of OPEC. OPEC is an international

PEST Analysis (Political, Economic, Social & Technical Analysis)

581 words - 2 pages PEST Analysis (Political, Economic, Social & Technical Analysis) A PEST analysis (also sometimes called STEP, STEEP or PESTLE analysis) looks at the external business environment. In fact, it would be better to call this kind of analysis a business environmental analysis but the acronym PEST is easy to remember and so has stuck. PEST stands for Political, Economic, Sociocultural and Technological. (Technological factors in this case, include

The World Economic Crisis: A Marxist Analysis

3354 words - 13 pages : causes and consequences, Monthly Review Press New York • Bellamy J. F., 2007, The financialization of Capital and the Crisis, Monthly Review • Shaikh A, 1999, Explaining the Economic Crisis, New School University • Beams N, 2008, The World Economic Crisis: A Marxist Analysis, Lecture delivered in November • Bina C., Economic Crises, 2010, Marx’s Value, and the 21st Century Capitalism • Callinicos A., 2010, Bonfire of Illusions: The Twin Crises

Economic Analysis of the Home Building Industry

4262 words - 17 pages . When consumers stop spending, recessions usually occur. This can cause a decline income growth. Another important consideration in personal income is disposable income. Disposable income is the net income after all essential items have been paid. Personal income increased $29.3 billion, or 0.3 percent, and disposable personal income (DPI) increased $27.2 billion, or 0.3 percent, in July, according to the Bureau of Economic Analysis. Personal

Economic Analysis of Bank of America

1547 words - 6 pages while the Employment Situation report containing the earnings figures comes out monthly. The ECI measures changes in employee wages, salaries and benefits, while the AHE number shows how worker wages are changing month to month. Both are important because rapidly rising labor costs can force businesses to raise prices to compensate, spurring inflation.3. Gross Domestic Product -- This report comes from the Bureau of Economic Analysis, which

Economic Analysis of The U.S. 2001-2003

2609 words - 10 pages Economic Analysis of The U.S. 2001-2003      Economics have many indicators to describe how it runs. The indicators can show if the economy has improved or declined. The economic indicators that will be focused on in this analysis of the United States economy from 2001 – 2003 will be the consumer price index, the imports and exports, the unemployment rate, and finally the gross domestic product. Now while most may know

An Analysis of Indian Economic Reforms

962 words - 4 pages What happened till now: In 1991, there was serious economic crisis, the worst balance of payment problem since independence. The economic reforms adopted by India were to stabilize the economy, de-regulate the real and financial sector, etc. The economy bounced back in 1995. The stats for 95-96 showed good signs of growth. The growth started to slow down after 95.There were many supply-sided and demand-side theories that suggest the reason for

Economic Analysis of The United Arab Emirates

2272 words - 9 pages Economic Analysis of The United Arab Emirates 1. Introduction A. General Information The United Arab Emirates (U.A.E) is a federation of seven Emirates that was formed

Analysis of Malaysian Economic Development From 1993 to 2002

4521 words - 18 pages Analysis of Malaysian Economic Development From 1993 to 2002 Over the past three decades, Malaysia has achieved growth and structural transformation in its economy. This review examines the Malaysian economic performance and its policies for the last 10 years (1993 - 2002). My approach to the review will cover the following: · What is the role of the government in the economy process? · What were the forms of

Economic and Financial Viability Analysis of Renewable Energy Projects

2131 words - 9 pages This chapter discusses the theory underlying measurements of asset utilization as a way to provide support to economic and financial viability analysis of Renewable Energy Projects (REPs). It starts by providing an overview of the literature for economical and financial viability analysis within the Renewable Energy Sector and follows revealing the gap in the literature that this thesis tackles. 2.1 Challenges for Business Evaluation of REPs

Economic Impact Analysis: "World Cup 2006 in Germany"

2136 words - 9 pages World Cup 2006 in Germany ECONOMIC IMPACT ANALYSIS"World Cup 2006 in Germany"February 2006Project TitleEconomic Impact of World Cup 2006 in the Federal Republic of GermanyIntroductionMy objective of this report is to discuss some of the direct and indirect economic impacts of a mega-event such as FIFA World Cup™ 2006. Currently I am living in Germany, 30km from one of 12 host cities for the 2006 World Cup of Football (Soccer in the U.S

Similar Essays

Local Economic Development Analysis

2848 words - 11 pages plan and provides funds, investigation and other support for local economic development. Cities decide on Local Economic Development plans and the procedure of incoming at a Local Economic Development plan must be part of other process. The Local Economic Development plans should be based on the overall idea outlined in other processes and should take into consideration the consequence of the analysis done to classify difficulties, and arrange

Economic Final Analysis

4070 words - 16 pages Our final economic analysis is composed of the six major economic indicators that play an important role for the housing industry. These are Capacity Utilization, Income, Price, Inflation, Unemployment, and Gross Domestic Product. Furthermore, we will conduct an in-depth analysis based on the forecasts acquired in week 4 to determine future strategic initiatives. We will also discuss the SWOTT analysis (Strengths, Weaknesses, Opportunities

Current Economic Analysis

2019 words - 8 pages Current Economic Analysis Economics Define unemployment? Provide an example of the three types of unemployment. Which type of unemployment is most problematic and why? What type of unemployment problem(s) does the U.S. currently have and why? What is a possible solution to the unemployment problem(s)? Unemployment is the failure of a person to find jobs. (Schiller, 2006) This means that an unemployed person is one that is capable of

Egypt Economic Analysis

9754 words - 39 pages information not only on the economy of Egypt but it further states about the population factors, distribution channels and also about media. Moreover, the political risk assessment which includes the conflict situations and import and export regulations. These information is important for an exporter when doing business with foreign countries.3.0 Economic Statistic and Activity 3.1 Gross National Product 3.1.1 Total GDP - Purchasing Power Parity