Business Cycle
The idea of the business cycle goes back at least to Marx' description of capitalisms booms and busts in Das Kapital, and has been described in more detail by modern writers starting in the 1940s. Business cycles -- which do not occur at any sort of regular interval -- are generally understood in terms of when the direction of the economy changes (Romer, 2008). As Brad DeLong (2010) describes, Marx noted that business cycles occur when there is an overaccumulation of capital and overproduction of goods. In order to restore balance to the overheated economy, a crisis must follow. This crisis will create the depreciation of the value of assets. Marx further described what would happen to employment (it would go down). Real capital is destroyed, which means the equipment and factories must cease production, workers must be made unemployed and capital will inevitably sit on the sidelines --…...
NBER. (2011). U.S. business cycle expansions and contractions. National Bureau of Economic Research. Retrieved December 2, 2011 from http://www.nber.org/cycles.html
Business Cycle Analysis
Overview- rom the end of World War II to the early 1970s, China was relatively isolated from the global landscape. It was a part of the Soviet Communist Bloc, but remained inwardly focused on improving its own infrastructure and economy, all the while poised for rapid modernization. Openness towards the West began around 1978 with increased trade, a small amount of additional transparency internally, and at least the semblance of allowing more capitalistic templates like ownership of businesses, development of more modernized factories, etc., and less journalistic control. After 1978, Mao's successor Deng Xiaoping realized that the government had to increase the standard of living for its population, or face revolt. Deng's, and subsequent regimes, focused on market-oriented economic development. By the turn of the century, for instance, Chinese output had quadrupled, living standards improved as well as personal choices -- to a degree. There has been increased…...
Business cycle theories have been the topic of discussion for many years. There are several business cycle theories that are reliable and trustworthy, while others are controversial and easily disproved. The purpose of this discussion is to distinguish among the different theories of the business cycle. These theories include Keynesian aggregate demand theory, the Monetarist aggregate demand theory, and the new classical and new Keynesian theories of the business cycle and the real business theory. In addition, this discussion will describe the origins of, and the mechanisms at work during, the expansion of the 1990's, the recession of 2001, and the great depression.
Keynesian Theory
Aggregate Demand Theory
Aggregate demand simply describes the correlation between the amount of aggregate output and the price height when every other variable is held constant.
According to an article entitled "Aggregate Demand and Supply Analysis" from the Keynesian point-of-view the aggregate demand is determined "in terms of its…...
GDP and the Business Cycle; Government Financial Bodies, How Fiscal Policies Impact Production and Employment
This memo will address three issues commonly discussed when talking about the economy. First, it will explain and describe how gross domestic product can be used to measure the business cycle. Second, it will describe the roles of the government bodies that are responsible for determining national fiscal policies. Third, it will explain how national fiscal policies impact the economy's production and employment. Specifically, it will examine how changes in government spending and taxing impact the economy's production and employment. Considered together, these three explanations should lead to a better understanding of fiscal policy at a national level.
Gross domestic product (GDP) is the monetary value of all of the finished goods and services that are produced in a country within a specific time period, usually each year. It includes all items, whether produced or consumed publicly…...
UK Business Cycle and Current Economy
According to the basic tenets of the business cycle theory or model of economic trends, periods of high growth in GDP and rising prices (and wages) are followed by drops in economic activity as consumers/workers grow wary and spend less, producers start cutting back on supply and labor, and thus unemployment rises and consumers are able to spend less. As prices drop low enough and employment stabilizes, spending begins to resume, production and employment levels increase followed by wages, and a period of high growth is entered into again. The current economy in the United Kingdom is indicative of a nation at the bottom of a trough in the economic cycle, as various elements of the economy are beginning to stabilize yet a return to growth remains uncertain and very slow if it is occurring (BBC, 2012). Producer prices rose very slightly, which could be…...
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Reference
BBC. (2012). UK producer prices rise 0.7% in April. Accessed 12 May 2012.
Gross domestic product (GDP) is the economic measure which quantifies the production within a country's economy in a single period of time. The measure, which is usually on an annual or a quarterly basis, is usually calculated as the total market value of all the finished goods and services that country during the period (Nellis and Parker, 2000). In 2012 the GDP in the U.S. had reached $15,094 billion dollars, an increase on the 2011 figure of $14,582.4 billion (Trading Economics, 2013). This in turn was an increase on 2010, when the GDP was $14,043 billion. This would appear to indicate a growing economy, where there is an increase in output. However, this is the market value on current prices, each year the increase includes inflation, so the real growth, that is the actual growth less an allowance for inflation, is a better measure of how…...
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References
Baye Michael, (2007), Managerial Economics and Business Strategy, McGraw-Hill/Irwin
Thus, recession can be defined as a cure to the ill-policies of government and central bank that caused boom in certain sectors such as housing market. Because of that boom, easy credit policies, subsidies, easy lending and many other government and central bank caused factors, the prices soars to extreme high and causes inflation and money gets trapped in mal-investment. As the recession acts as a cure to this situation of extreme falsehood, it starts decreasing the extent of false demand and tries to bring the market to its actual true situation. The prices start declining and the economy starts recuperating from the illness of false heights.
Since recession itself is the cure of problems of mal-investment that were caused by the government and central bank's ill easy money and credit policies, it cannot be cured by further stimulus. The stimulus will only sustain the recession for longer periods until all…...
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References
Browning, E.S. (2009), "After the Collapse, Guarded Hope for '09," the Wall Street
Business Cycles: Phases, Indicators, Measures, Economic Evolution, Outlooks
is currently recovering from its worst recession in over 25 years. Most economists consider the rapid rise in housing prices (the bubble) and the subsequent collapse in that market to be the primary cause of the recession. Explain what housing market circumstances were responsible for the collapse of that market.
Observers attribute the 2001-2006 housing bubble to "everyone from home buyers to Wall treet, mortgage brokers to Alan Greenspan." (FactCheck.org.)
Causes were five-fold -- and all reducible to the consumer:
REALTOR encouraged people to buy (and sell)
Builders built more homes than were needed. This was fed by the media's emphasis on the American myth of each American needing a home to call himself. There was a home-buying mania.
Lenders created poorly designed loan products to fill demand. Economic derivatives, specially the "credit-default swap" were used irresponsibly in that swaps and other derivatives were sold and resold in…...
The business cycle, or the seemingly inexorable ups and downs of the economy, is inevitable—there will be both recessions and periods of growth. But predicting when these highs and lows will come is challenging and has eluded even some of the wisest investors. “The key is to invest one cycle phase ahead,” and “investors need to have a forward-looking mindset so they can prepare their portfolios to capitalize" (Hicks, 2017, par.12). The difficulty of predicting the business cycle is one reason why investing low-cost mutual funds is often suggested versus the investor attempting to second guess the business cycle.
For example, in regards to the current global economy, according to the World Economic Forum, although the world economy has rebounded from the global recession of 2008, “this has been the weakest post-recession recovery on record,” particularly in regards to productivity and investment (“Economic Storm Clouds,” 2018, par.1). In addition to the…...
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References
Economic storm clouds. (2018). World Economic Forum. Retrieved from: Hicks, C. (2017). How to invest with the business cycle. US News and World Report. Retrieved from: https://money.usnews.com/investing/investing-101/articles/2017-10-10/how-to- invest-with-the-business-cycleKnudson, J. (2017). Top bank risks in 2018. Retrieved from: https://bankingjournal.aba.com/2017/12/top-bank-risks-in-2018/http://reports.weforum.org/global-risks-2018/economic-storm-clouds/
Kraft Foods Inc. is the second largest food company in the world and makes annual revenues in excess of $54 billion (Kraft Foods Annual eport, 2012). It operates in a highly competitive consumer foods industry where high volume sales are essential for competitive success. Tapping into new markets and growing one's brand portfolio are also important for growth and success.
Kraft Foods Inc. pursues a number of business-level strategies to support its corporate level strategies. The business level strategies are determined by answering the question How do we compete? (Ireland, Hoskisson & Hitt, 2008). Kraft Foods Inc. has selected product differentiation and brand development as its primary business level strategy. Product differentiation involves creating and conveying to the consumer a unique feature of the product portfolio that distinguishes the company from the competition and offers something that the consumers…...
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References
Furrer, O. (2011). Corporate level strategy: Theory and applications. (p. 2). Routledge
Ireland, R.D., Hoskisson, R.E., & Hitt, M.A. (2009). Understanding business strategy: Concepts and cases. (p. 88). Cengage Learning
McKern, B. (2003). Managing the global network corporation. (p. 125). Routledge
O'Grady, T.P., & Malloch, K. (2010). Innovation Leadership. (p. 371). Jones & Bartlett Learning.
The Apple iWatch is centered in the smartwatch market. The market structure in which the product lies is oligopoly. Oligopoly refers to a market structure that is dominated by a few sellers. This is because the smartwatches are products which are produced by a few large companies, and every contribution of every company is considered substantial enough to be significant in the market. In addition, the companies in the market are cautiously aware of how rival companies react to change and particularly in association to price. This particular market structure is distinctive in the sense that the company's pricing as well as output decisions will also integrate the perceived or anticipated reactions of the competitors. For instance, in this case, the pricing and output decisions of iWatch will consider the anticipated reactions of other company products such as the Sony Smartwatch (Salvatore, 2015).
Global usiness Cultural Analysis: Singapore
The objective of this study is to answer the questions how the major elements and dimension of culture including religion, ethics, values, attitudes, manners, customs, social structures, and organizations integrated in Singapore by local conducting business. As well, this work will answer how these elements and dimensions compare with United States culture and business. Finally, this work will examine the implications for United States businesses that wish to conduct business in Singapore.
The work of Abeysinghe and Choy (2009) reports that the economy in Singapore has been undergone a transformation that has turned it into "…an Asian powerhouse…" due to the "far-sighted economic policies. The economy of Singapore is proof of the outcome of a market-driven economy taking place during fast development of high per capita income, and an environment free of corruption in which the workforce is both motivated and educated. The financial infrastructure of Singapore…...
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Bibliography
Abeysinghe, T. And Choy, Meng Choy (2009) The Singapore Economy: An Econometric Perspective. New York: Routledge, 2009.
Abeysinghe, Tilak. 1996. Electronics and Growth Cycles in Singapore. National University of Singapore, Department of Economics and Statistics, Econometrics Studies Unit, Mid-Year Review of the Singapore Economy.
Asian Wall Street Journal. 1994. "Singapore Unveils Plans for Performing Arts Center," July 22 -- 23: 1.
Bachtiar, I. 2002. The conservation story. In Skyline, Commemorative Edition 2002. Singapore: Urban Redevelopment Authority.
However, while the majority of goods will see an increase in demand when prices decrease, the rate at which demand changes of will vary, and some products may see a faster increase than others (Baye, 2007). Additionally, in a few cases a decreasing price may undermine the value of the product, and may result in a decrease in sales, this is known as a Giffen good (Baye, 2007).
lasticity is a way of measuring the impact that a change in price will have on the demand for a product, and the revenues which are generated. If Will wants to maximize revenues, he can use the concept of elasticity in order to determine how prices for both the out of copyright and new books should be price.
The calculation of elasticity is relatively simple, if there is some historical data available indicating sales following a price change. lasticity can be calculated by…...
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Elasticity is a way of measuring the impact that a change in price will have on the demand for a product, and the revenues which are generated. If Will wants to maximize revenues, he can use the concept of elasticity in order to determine how prices for both the out of copyright and new books should be price.
The calculation of elasticity is relatively simple, if there is some historical data available indicating sales following a price change. Elasticity can be calculated by dividing the percentage change in the demand by the percentage change in the price (Baye, 2007). For example, if there is a 50% decrease in demand following a 50% increase in price the calculation will be -50/50 = -1. In elasticity calculations is it is usual to drop the negative indicator (Baye, 2007). This means that for every 1% increase in price there will be 1% decrease in demand, and conversely for every 1% decrease in price there will be a 1% increase in demand. If this is applied to the sale of movies where he found that when prices decreased from $80 to $20 sales increased by 600% a sample plasticity calculation can be undertaken. In this case plasticity is calculated by dividing 600 by -75, which gives an elasticity of -8, or 8 because the minus indicator is dropped. This means that it was possible to calculate the change in prices, and that for every 1% decrease in prices there would be an 8% increase in sales. Where the increase in demand is greater proportionately than the decrease in price, there will be an overall increase in revenue, where the elasticity is less than one the proportional change in demand will be less than proportional change in the price.
With the case of the films, it was clear that the company was better decreasing prices in order to increase sales. However, the digitized books are a different matter, they are different product, and at the current time they are benefiting from the competitive advantage of diversification, as the technology is patented and Will does not believe that it can
This means that you must continually monitor and communicate about possible changes, pertaining to the overall scope of the threat. Once this occurs, is when an entity will have an effective security procedure that will adapt to the various changes that are taking place.
This is significant, because this information can be used to corroborate the overall nature of security threats that could be faced by the SME. Where, this information is useful in helping to identify and address possible operational considerations that must be taken into account. As a result, this will help to provide not only a glimpse of possible security challenges that will be faced, but it will also help to establish an effective IT security protocol.
When you compare this with the previous source, this information can be used to highlight specific security threats that the company we are examining could face. Where, it discusses the possibility…...
This allows for greater levels of planning and cooperation, and fills in the information gap that currently exists between the factory floor and the rest of the supply chain.
Lexmark provides an example of waste. Recently, the company found itself with more than $1 million in scrap from one lot. Engineers had insufficient information to isolate and fix the problem, so were instead relegated to crisis control. With more accurate data from each step of the operation, the engineers could have been more involved in the process and made improvements along the way before it became a large-scale crisis.
Through web-based business applications, engineers can now examine a defective printer cartridge and then use a thin client to put a hold on the entire batch if necessary, regardless of its physical location (anywhere in the world)
In conclusion, it is apparent that e-business is making its mark on the business world. In…...
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Bibliography
Alexander, Michael. (2001). Factory Floors Go Online -- Pioneering manufacturers close the final gap in their supply chains. InternetWeek; Manhasset; Mar 12, 2001.
Steele, a.L. (2001). Cost drivers and other management issues in the JIT supply chain environment. Production and Inventory Management Journal. Alexandria, 42(2), 61-68
Drickhammer, D. (2001, May 21). Peak performance. Industry Week. Cleveland, 250(8) 36-40.
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