Note: Sample below may appear distorted but all corresponding word document files contain proper formattingExcerpt from Term Paper:
remedy for the U.S. economy as the country has started to recover from the shock of September 11. Though the tragedy of September has drastically effected the economic growth of the country but the forces of recovery will soon lift the economy out of the recession. However, this turnaround is going to go a long way. The general opinion about the economy of the United States is that the recession will end around the first quarter of the year 2002 and the growth in real gross domestic product for the year 2002 is expected to be about 2.5% which will be definitely a huge achievement. However, this growth is expected to be slow but with a constant pace. According to the economic analysts the real GDP growth will pick up by the second half of the year 2002 and therefore most of the investors are expecting a reduction in the interest rates by the Federal Reserve but only to the extent that will help the monetary policy to shift from its highly accommodative approach to a more middle-of-the-road position. Consumer spending will grow more closely with household income. Capital spending will be guided by profits and cash flow, and stock prices will rise in line with more sensible expectations for risk and reward. Though the majority of the forecasters are quite optimistic about the economic growth of the country, however some less optimistic forecasters are not much hopeful. According to them, there are some hurdles to the steady growth of the economy such as the surplus production capacity in the technological sector will against a rebound in capital spending. Finally, weak demand from abroad will not dissipate until after the U.S. recovery is established. (Business Week Online)
The average growth forecasted, from the opinions of different forecasters, is estimated to be 1.5% in the first half and 3.5% in the second. Moreover, the jobless rate is expected to rise in the second half of the year 2002 because of the steady recovery of the economy. On the other hand, the inflation is estimated to remain below the level of 2%.
According to the economic forecasters of Citigroup the annual rate of change in GDP is expected to be 3.8% and 3.7% for the years 2002 and 2003 respectively. Moreover, the change in consumer price index is forecasted to be 2% and 2.2% for the year 2002 and 2003 respectively. On the other hand, the jobless rate is expected to be 5.5% and 5.8%. However, the forecasts developed by the forecasters at Merrill Lynch estimates that the percentage change in the GDP is expected to be 3% for the year 2002 as well as 2003. The CPI (Consumer Price Index) is expected to be at 1.3 and 1.9 for 2002 and 2003 respectively. On the other hand, the jobless rate is estimated by them at the about 6.1% and 5.7%. The rate of inflation, as measured by the growth of the consumer price index (CPI), is expected to decline to around 2.8% in the year 2002. This projection is however based on the assumption by the Congress that the oil prices will decline in the world market however the underlying inflationary pressure from the tight labor market will remain there. (Business Week Online)
The average rate of inflation is estimated to be about 2.6% as measured by the change in the consumer price index and 2.0% as measured by the change in the GDP price index. These projections for inflation reflect an assumption about the rate of inflation in line with the Federal Reserve policy. It is assumed that the prevailing unemployment rate will not remain low in the near future although it has being accompanied by a slight increase in the inflation rate. The surge in the productivity growth rate of the economy, experienced recently, has lowered the rate of unemployment but on a temporary basis. Moreover, it is very much likely that the growth rate of labor costs will ultimately come up to the increase in productivity growth, putting downward pressure on profits and upward pressure on inflation. That inflationary pressure is expected to develop even in the condition of high growth in labor productivity. It has been assumed by the majority of the economists that the keeping the CPI inflation in view, the unemployment rate is expected to remain at an average of 5%.
On the other hand, the economists project the interest rate by adding the projection for the consumer price index inflation (CPI Inflation) to the projection for the inflation adjusted interest rates. The real interest rate on the three moth treasury notes projected for the coming year is estimated to be around 2.4% while for the ten-year treasury notes it is expected to be around 3.3%. The real interest rate for the ten-year treasury is though somewhat similar to its last decade's average; however, the real three-month rates have risen to a slight level.
The projections developed by the economic forecasters for the federal budget are closely associated to their projections of economic activity and components of national income. As the components of national income are taxed differently at different rates, the distribution of income among it's components is a very essential part of the economic projections. In this regard, the wages of the labor, the salary expenditures and the profits earned by the companies are the most important component as they are the highest revenue producing components. These vital categories have risen from 54% in the early 90s to 57.2 in 2000, as a share of GDP. However, the future projections show a decline in their share to 56% in the year 2002. According to the economic forecasters, the sum of the high-tax categories of income is expected to grow more slowly than GDP during the next 10 years because the depreciation is projected to be much higher, which reflects the high investment rates of the recent past. There has been a very swift increase in the capital stock of the country which can be truly attributed to the boom in business investment during the past five years. Moreover, companies will benefit from the high depreciations as it will help them to deduct increasing amount of depreciation from their taxable incomes. It is estimated that the deductions in the taxable income will rise from 7.8% of GDP in 2000 to 9.1% in 2008. This trend is expected to remain the same till the year 2011.
The congress has estimated that the federal revenue is expected to exceed from the level of $2.1 trillion in fiscal year 2002 provided that the governmental policies remained unchanged. Revenues are expected to grow more slowly than the nominal GDP through the year 2002 as well as the year 2003. However, the growth in the Revenues is projected to grow faster than GDP in the long-term. In the year 2011, revenues are projected to be $3.4 trillion, or about 20.4% of GDP. It is expected that the growth of the receipts in terms of revenues will be slower as compared to the swift rate of the past few years. The past trend of the growth of receipts was pretty impressive as the revenues collection rose with an average rate of 8.3% from 1994 to 2000. The highest growth was being observed in the year 2000 when the growth reached the mark of 10.8%, the highest growth rate since 1987. ()
The expected growth in the economy is primarily based on an unexpected increase in the growth of the economy's ability to produce goods and services. There has been an increasing growth in the labor productivity of the United States economy and it has paced up from the rate of 1.5% a year during the decades of 70s and 80s to a rate of 2.9% in the late…[continue]
"Macroeconomics Forecasts" (2002, February 19) Retrieved December 6, 2016, from http://www.paperdue.com/essay/macroeconomics-forecasts-55748
"Macroeconomics Forecasts" 19 February 2002. Web.6 December. 2016. <http://www.paperdue.com/essay/macroeconomics-forecasts-55748>
"Macroeconomics Forecasts", 19 February 2002, Accessed.6 December. 2016, http://www.paperdue.com/essay/macroeconomics-forecasts-55748
Macroeconomics Abbott Labs and Macroeconomics It is a fact that the recent economic downturn affected every individual and company in some way, but companies that had solid business plans prior to the start of the crisis were better able to weather the financial storm. For example, a company that had a diverse range of business that included both products that depended the level of a consumer's disposable income and another group of
Macroeconomics Investopedia provides a list of major macroeconomic indicators, of which several are relevant to FedEx. FedEx is considered to be a bellwether organization in that its client base spans a broad swath of business. Thus, the GDP is the most important macroeconomic indicator. The amount of business being conducted in the economy will reflect in how many customers use FedEx's service. In addition, because FedEx is a premium service, businesses
Macroeconomics -- Inflation Domestic and national news are constantly talking about the rapid changes and increases in prices of basic commodities today. Prime commodities for a specific economy or country are discussed with the same intensity as changes in the global market prices for important, universal necessities such as oil. Prices of basic commodities are not the only ones susceptible to increasing in value. Services, too, particularly wages, are subjected to
Macroeconomics One set of macroeconomic projections comes from the Congressional Budget Office (CBO). The CBO forecasts two years out specifically and uses projected annual averages for the subsequent four and five-year periods. The CBO is projecting real GDP growth of 3.1% in 2011, 2.8% in 2012, an average of 3.4% in 2013-16 and an average of 2.4% from 2017-21. The CBO's projection for the ten-year Treasury note is 3.4% in 2011,
This model is much more conservative, and thus tends to try to avoid government interaction within the system. Here, the research suggests that it "stresses the connectedness of the monetary flows" (Hannes, 2012, p 4).As such, it keeps its leakages from separating and floating out of the system, as well as providing for more inside injections that do not rely so much on outside systems, as in the case
Economics in the United States Macroeconomics in the United States Macroeconomics deals with the general economic systems, which have a larger scope compared to individuals and markets. Essentially, microeconomics is mainly used in the determination and forecast of a country's national income. This is done by analyzing the factors of the economy that represent trends and patterns and in most cases influence each other. Economic factors affecting macroeconomics include the rates of
is the price. The supply schedule can be represented by the equation Qs = 1400-700P, where Qs is the quantity supplied. Calculate the equilibrium price and quantity in the market for chocolate bars. Ch5, #20 - For each of the following pairs of goods, which good would you expect to have more elastic demand and why? a. required textbooks of mystery novels Because the textbooks are required, there will be more elasticity