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¶ … GDP forecast for the next 18 months is bound to have an impact on the industrial figures in general and, in particular, on the automobile industry, in terms of production and revenues.
First of all, a GDP forecast will influence the foreign investments in the United States. The reason for this is quite simple and it revolves around the confidence concept. A positive GDP forecast will mean that the American economy is presently performing well and, even more important, that it will continue to perform well into the future as well, with an ascending GDP trend.
For a foreign investor, this will mean that acquiring American assets is a less risky and more profitable action than in a different situation. The fact that you have a positive forecast for the next 18 months is bound to show that the economy is producing, that the figures are satisfactory and that you will have a satisfactory return on your investments.
Acquiring American assets by foreign investors will have a direct impact on the U.S. dollar and on the exchange rate between the dollar and the world's most important currencies. An increased confidence in U.S. assets is equivalent to an increase in the U.S. dollar price, an appreciation of the U.S. dollar compared to the other main currencies. The increased interest in U.S. assets will mean an increased demand for them and, since the price for them is paid in U.S. dollars, an increase in dollar purchases is the logical economic move.
Hence, an appreciation of the U.S. currency will make automobile production less competitive on the exterior markets. The fact that the dollar has appreciated means that the producers will achieve comparatively less on the international markets, as production costs are covered in a strengthened currency (the U.S. dollar) and the revenues are accounted for in comparatively depreciated foreign currencies.
Another well-known economic analyst Milton Friedman, believed that everything wrong in the world could be righted with free market trade. He promoted such ideas of private utilities and removing government involvement from society and business in every conceivable area (the Great Experiment: The Facts About Globalization (http://www.americanassembler.com/issues/globalization/index.html). Recent studies indicate that such ideas, while looking good in theory are not conducive to successful society. California is a classic example of what
All of the major Asian powers, including Japan and China, have manifested expanded growth, indicating that was what was once a global recession may now only be an American and European recession. Regardless, the policies of South Korea can prove instructive to Western powers, particularly in terms of its sustained stimulus spending. References Fuller, Thomas. (2009, October 25). Asian leaders focus on freer trade. The New York Times. Retrieved October 26, 2009
Investment spending is very significant because it is an essential ingredient in economic development and growth. The decrease in the level of investment spending may cause a recession. Most recessions occur as a result of fall in investment spending (Paul & Krugman, 2007). Swings in investment spending are very dramatic than those in customer spending. Reduction in consumer spending is normally a result of a progress that starts with a
Globalization's Effect on the United States' National Security Objective of this paper is to explore the impact of globalization on the United States national security. The study defines globalization as the increasing global relations of people, corporate organization and government. There is no doubt that the globalization provides numerous benefits to the American economy. Despite the benefits derived from the globalization, the advent of globalization also provides some threats to the United
2.5. Limitations of the study At the level of the limitations, these refer to the usage of secondary information, as opposed to the collection of primary data through the direct analysis of the Chinese market. This limitation is nevertheless addressed through the integration of multiple sources of valid and verifiable information, leading as such to the creation of solid, relevant and reliable findings. The second limitation is one common to all research
S., as they now have the guarantee that the U.S. market is ready to receive and purchase their products. This is especially important for developing economies that grow at a fast pace, but which also need the necessary markets on which to develop and sell their products. One such example is China, which is an enormous producer, but one that cannot resist unless there are powerful markets on which its products