Archive for the ‘Economics’ Category
September 3rd, 2010 | 
Author: 
A company can secure additional capital without going into debt by doing which of the following?
A. Taking a business loan
B. Buying out another company
C. Bargaining for wage reductions
D. Going public
im stuck!! : (
Ladawn Mallalieu
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I’m going to go against the current here, but I’m wondering…
The problem was created by a culture of debt. Too many people took on too much debt and ended up defaulting.
Now, the federal reserve lowers interest rates, encouraging debt in order to encourage economic activity. Honestly, I’m not quite sure what kind of mechanism you would use to do this, but shouldn’t we be looking the other way? Shouldn’t a sound, long-term solution include not more debt, but the creation of a culture of living within our means? (I know that’s a heck of a swing, but it would seem the solution is more of the same).
I know what I’m saying goes against the current and it just dawned on me, so I haven’t really worked this idea through, but I’m just wondering if anybody else thinks it would make sense to think along those lines.
Wiley Reye
I believe that Per-Capita Carbon Dioxide is currently unimportant, and that priorities should be set on National Debt, both in the United Kingdom and the United States of America. Both are in massive debt, per-capita. The most rapid way to accelerate out of National Debt, is the burning of abundant fossil fuels such as Coal. It is advisable to reduce expensive-to-produce energy sources such as tidal power (developing dams costs massive amounts). If I had the power to do so, I would increase the Coal dependency of the United Kingdom, and the United States of America until there are sufficient funds to invest in pointless ‘low carbon’ technologies based upon unproven science and sketchy ideology.
Qatar currently depends on over 300 litres of oil per-capita per-day to survive, and they are thriving.
Jonah Grant
This morning a question was asked about the current account deficit and one reply was: “It’s ok. As long as the US military rules, no one will dare to collect their debts”
The global current account deficit of the United States is now larger than it has ever been—nearing $800 billion, almost 7 percent of US GDP. To finance both the current account deficit and its own sizable foreign investments, the United States must import about $1 trillion of foreign capital every year or more than $4 billion every working day. The situation is unsustainable in both international financial and domestic political (i.e., trade policy) terms. Correcting it must be the highest priority for US foreign economic policy. The most constructive remedy in the short term is a three-part package that includes credible, sizable reductions in the US budget deficit, expansion of domestic demand in major economies outside the United States, and a gradual but substantial realignment of exchange rates
The details are taken from the Peterson Institiute
http://www.iie.com/research/topics/hottopic.cfm?HotTopicID=9
Elwood Rados
Ashely B asked:
1) the difference between real and nominal income or GDP arises beacuse of the existance of_________
a)the difference between report and actual corporate profits
b)differnce in values od currencies
c)people thar dont report all their earnings
d)price changes
2)Increase in the rate of growth in the money supply have been shown to most likley result in:
a)higher unemployment
b)higher rates of inflation
c)higher rates of economic growth
d)smaller governmnet budget deficits
3)The US federal debt has grown whenever
a)the federal budget shows a deficit
b)the federal government borrows
c)the federal gov. issues Treasury secuirities
d)allof the above
4)Which best defines recession?
a)rising unemployment
b)rising prices
c)falling output
d)falling stock prices
5)The money supply is controlled by:
a)the president
b)congress
c)the federal reservs
d) all of the above
6) a decrease in the value of the dollar will caise all of the following except:
a)rise in imports
b)rise in exports
c)an increase in inflation rate
d)a reduction in the trade deficit
7)Fiscal policy has been most sucessful when
a)taces were raised during recession
b)government spending was increased with the economy at full employment
c)the government purposely increased the size of the deficit during a recession
d)when efforts were made to eliminate a budget deficit during a recession
8)The high rates of inflation in the 1070s and early 1980s have been shown to be primarly due to_______
a)rapid money supple growth
b)high oil prices
c)the veitnam war
d)unions and big business
9)If the federal reserves increase the money supply at approximatly the growth rate of output then,____
a)it has over-stimulated the economy
b)the unemployment rate should rise
c)the inflation rate should be near zero
d)the unemployment rate should approach zero
10)Which of the following deos not increase aggregate demand?
a)rising unemployment
b)rising prices
c)falling output
d)falling stock prices
Violet Casteneda
Eugena Lane
I form non bias opinion on answers. I will provide evidence on why we are in a recession. If you don’t agree then that is you’re own decision and it is respected by me. However I will challenge you to see what parts of this info is not seen in the market…and why it cannot be defined as a recession.
THIS IS LONG BUT IT PROVIDES REASON FOR WHY IT IS A RECESSION:
The public was addressed by the secretary of state three weeks ago with the state of our economy. It was concluded there was a sign of recession on way. However, many believe this started in November as did the subrime lending create decrease in mortgage lending. I am one of those people. I don’t believe that subrime lending was the only cause. So since subrime lending fiasco started two consecutive periods ago….this indeed has led to a economic fall. GDP is important…and I have seen it fall also…but it has not reached two consecutive periods…but it will, no doubt. (that is my own opinion) Note that the GDP-growth (real seasonally adjusted annual rate) for the last quarter of 2007 was 0.6[31] as revised on February 28, 2008. It was 2.2 for all of 2007.
Nouriel Roubini has outlined a harsh 12-step scenario.[32]
U.S. home prices will fall between 20% and 30% from their peak. NYTimes chart ALSO TODAY IT WAS ANNOUNCED THEY HAVE FALLEN 60%
Losses to the financial system from the subprime disaster, as high as $300 billion, are now spreading to near-prime and prime mortgages.
The recession will lead to a sharp increase in defaults on other forms of unsecured consumer debt.
Monoline insurance companies will take losses on their insurance of residential mortgage-backed securities, collateralized debt obligations and other asset-backed securities products, which are much higher than the $10 billion-to-$15 billion rescue package that regulators are trying to arrange.
The commercial real estate loan market will soon enter into a meltdown similar to the subprime one.
Some large regional or even national banks that are very exposed to mortgages, residential and commercial, may go bankrupt. Bear Stearns Companies, Inc. collapsed on March 16, 2008, and was bought out by JP Morgan Chase.
Banks’ losses will grow as a result of hundreds of billions of dollars of leveraged loans on their balance sheets at values well below par, currently about 90 cents on the dollar.
Once a severe recession starts, a massive wave of corporate defaults will take place. Typically U.S. corporate default rates are about 3.8% (1971-2007); in 2006 and 2007 this figure was a rather low 0.6%. And in a typical U.S. recession such default rates surge above 10%.
The “shadow banking system” (as defined by Pimco, it is composed by non-bank financial institutions that borrow short and in liquid forms and lend or invest long in more illiquid assets), will soon get into serious trouble.
Stock markets in the U.S. and overseas will start pricing in a severe U.S. recession and a sharp global economic slowdown.
The credit crunch that is affecting most credit markets and credit derivative markets will lead to a drying up of liquidity in several financial markets, including otherwise very liquid derivatives markets.
A vicious cycle of losses, capital reduction, credit contraction, forced liquidation of assets at below fundamental prices will ensue, leading to further credit contraction
Any questions?
John…man are you serious…”labeling”?
C’mon…now. GDP is gonna say the same thing I pulled off wikipedia. So what are you getting at? You have to come out with something more than characterizing my question as labeling. No offense…i mean you are the only one that answered in 30 minutes. So its looking like people aren’t conflicting with a recession being here. Thats good.
Good answer though.
Piatchi..thats a great analogy…lol. Bear Sterns was baught by JP Morgan and Chase when it had substancial losses…but hey it DID survive the depression. Just take a look at any site it will give more info. Thanks for answer.
Angella Kilmer
Remeber title! Tvelve Crown Princes in Arabia get killed in plane crash. This was not half as startling as what their wills said: they left most of wealth possed to USA but it could only be used for debth reduction. Getting caught up in buzz twelve females associated with princes bequested half their wealth, and two computer eastern gates doniated most of their wealth with the same conditions. The total amount was enough to pay off entire National Debt. Remeber titled again, because congress pass bill and presidents sign it that called in all outstand debt, and were court battle looks to large congress offers bonus to cash in very long term insturments held. Question, What would happen in USA Finical Markets, if government had no debt?
Bobbie Wabasha
i asked this 3 times got three answers and all different answers,,,so please help me out iv been on this question for over half an hour!!!
A company can secure additional capital without going into debt by doing which of the following?
A. Taking a business loan
B. Buying out another company
C. Bargaining for wage reductions
D. Going public
im stuck!! : (
Carly Breed
1. Why does a reduction in aggregate demand reduce real output in the Keyen’s model, rather than the price level? Why might a full-strength multiplier apply to a decrease in aggregate supply?
2. Why might economists be quite concerned if the annual interest payments on the debt sharply increased as a percentage of the GDP?
3- Trace the cause-and-effect chain through which financing and refinancing of the public debt might affect real interest rates, private investment, the stock of capital, and economic growth. How might investment in public capital and complementarities between public and private capital alter the outcome of the cause-effect chain?
Barry Gizzo