Government and the Central Bank Economic Recession Responses

Government and the Central Bank Economic Recession Responses Discuss how the government and the central bank should respond to an economic slowdown and a recession At the end of year 2008, economists suggested that the economy may be led to -or already in- a recession when economic growth was decelerating. The official definition of a recession is two successive quarters with a decline in gross domestic product (GDP). However, the National Bureau of Economic Research (NBER) identifies that a recession as a â€Å"significant decline in economic activity spread across the economy, lasting more than a few months† based on a number of economic indicators, with an emphasis on trends in employment and income. It doesnt confine itself to use the technical definition of two quarters of negative GDP growth because it is only assessed quarterly and it is subject to revisions. By the time GDP growth is negative for two quarters, the recession is already well happening. However, an economic downturn is defined less strict. For instance, we were in an economic downturn even with positive growth because the economic growth rate was slowing down, house prices were falling, unemployment rates were increasing and people could see the business cycle that moved from a boom period to bust. To respond to an economic slowdown and recession, government and central bank should take active roles in resolving economic issues through the use of two expansionary policies: fiscal policy and monetary policy. While the economy is not officially in a recession, there are signs that economic activity is slowing. According to CRS Report for Congress, 2008, economic growth in the United States was negative in the fourth quarter of 2007 after two strong quarters, but turned positive in the first and second quarters of 2008. According to one data series (graphs), employment fell in every month of 2008. The unemployment rate, which rose slightly during the last half of 2007, declined in January and February of 2008, but began rising in March and by August stood at 6.1%. The continuing financial turmoil is also cause for concern. Forecasters, while projecting slower growth in 2008, remain uncertain about the likelihood of a recession. If financial market confidence is not restored and private market spreads remain elevated, the broader economy could slow due to difficulties in financing consumer durables, business investment, college education, and other big ticket items. When the economy is down turning, economist believe the central bank should place more emphasis on short-term monetary policy as it takes fewer time to implement and its decisions to significantly decrease interest rates, and natural market adjustment, along with the already enacted stimulus, would be enough to avoid recession. When there is a massive intervention in the financial markets, the transmission of money can be stimulated into the financial sector and ultimately into the broader economy, where an important expansion of credit could significantly raise aggregate demand. It is said to emphasise more on monetary policy than fiscal policy because there are lags before a policy change affects spending. Therefore, stimulus could be delivered after the economy has already entered a recession or a recession has already ended. First, there is a legislative process lag that applies to all policy proposals — a stimulus package cannot take effect until bills are passed by the H ouse and Senate, both chambers can reconcile differences between their bills, and the President signs the bill. Many bills get delayed at some step in this process. As seen in Table 8, many past stimulus bills have not become law until a recession was already underway or finished. Is additional fiscal stimulus needed during the economy slowdown? It depends on the current state of the economy. Fiscal policy temporarily stimulates the economy through an increase in the budget deficit. Fiscal stimulus can take the form of higher government spending (direct spending or transfer payments) or tax reductions, but normally it can boost spending only through a larger budget deficit. A deficit-financed increase in government spending directly boosts spending by borrowing to finance higher government spending or transfer payments to households. A deficit-financed tax cut indirectly boosts spending if the recipient uses the tax cut to increase his spending. Economists usually agree that spending proposals are somewhat more stimulative than tax cuts since part of a tax cut will be saved by the recipients. The most important determinant of the effect on the economy is its size. Economic performance can be illustrated through shifting in aggregate demand and aggregate supply curves. Aggregate supply and demand are shown in the graph below. If consumer confidence in the economy falls and people reduce their spending, aggregate demand will fall, reducing real output and prices and possibly dropping the country into a recession (figure1). As the American economy slid into recession in 1929, economists relied on the Classical Theory of economics, which promised that the economy would self-correct if government did not interfere. But as the recession deepened into the Great Depression and no correction occurred, economists realized that a revision in theory would be necessary. John Maynard Keynes developed Keynesian Theory, which called for government intervention to correct economic instability. As fiscal policy is the use of government spending and taxes to stabilize the economy, Keynes recommends that parliament should increase government spending in order to â€Å"prime the pump† of the economy during periods of recession. At the same time, he calls for tax decreases in recessionary times, to increase consumers disposable income with which they can buy more products. Through both methods of fiscal policy, the increase in aggregate demand brought about by such actions leads firms to increase production, hire w orkers, and increase household incomes to enable them to buy more. While both tools are effective, Keynes advocated change in government spending as the more effective fiscal policy tool, because any change in government spending has a direct effect on aggregate demand. However, if taxes are reduced, consumers most likely will not spend all of their increase in disposable income; they are likely to save some of it. Referring to the graph, a rise in government spending G or a decline in autonomous taxes will cause the aggregate demand AD shift to the right, thus increasing both the equilibrium level of real GDP, Q*, and the equilibrium price level P*. When economy is running into recession, central bank is one of the agencies responsible to influence the demand, supply and hence, price of money and credit in order to keep production, prices, and employment stable. To do this, the central bank uses three tools: open market operations, the discount rate and reserve requirements. In order to bring the economy out of recession, central bank will lower the reserve requirements. Due to the act, member banks are required to keep less money, and so more money can be put into circulation through expanding their loans to firms and people. Furthermore, with the use of its open market operations for buying government securities, the central bank pays for these securities by crediting the reserve accounts of its member banks involved with the sale. With more money in these reserve accounts, banks have more money to lend, interest rates may fall, and consumer and business spending may increase, encouraging economic expansion. The discount rate is serves as an indicator to private bankers of the intentions of the central bank to enlarge the money supply. So a lowered discount rate which is announced by the central bank encourages more banks to borrow from the reserve banks. According to the graph below, a central bank open market purchase of securities, a fall in the discount rate or a decrease in the required reserve ratio will raise the money supply, thereby increasing aggregate demand and the equilibrium level of real GDP, Q*, and the equilibrium price level, P*.

Cold War and Containment Essay

Dated from 1947-1991 the Cold War was an intense economic, political, ideological, and military tension between the powers of the Western world, led by the United States against the powers of the Eastern world led by the Soviet Union. Because of Mutual Assured Destruction (MAD) these two countries never came head to head like previous wars, however they would fight each other in proxy wars. This sustained a high level of hostility throughout the war and one point if not the highest point of the conflict was the Cuban Missile Crisis. The Soviet Union placed nuclear weapons in Cuba which would be only 90 miles from the US; this would have been devastating to the United States with only Seattle outside the blast radius. The two Ideologies that were at conflict during the cold war were the United States Capitalism vs. the Soviet Union Communism. United States believed in a system where there is more than one political party, limited government interference in people’s lives and also the factors of production and freedom of speech. On the other hand the Soviet Union had the complete opposite with only one political party, Classless society, government controlled most aspects of people’s lives and all factors of production and there was no freedom of speech. Containment was strategies used by the United States to counter the spread of Communism. It was used to counter a series of moves by the Soviet Union after it tries to enlarge its communist influence in Europe and Asia. One way the United States implemented this strategy of containment was the Marshal Plan. Named after the then secretary of state George Marshal was a program of monetary support to help in the rebuilding of the European economy. The plan was in operation for four years from 1948 with an approximate spending of $13 billion. Another way they implemented the containment was the Truman Doctrine. This was put forward by the then US President Harry Truman. The doctrine, which had both economic and military elements, pledged support for countries attempting to hold back Soviet-style revolutionary Communism.

Biography of Leonardo Pisano Fibonacci, Mathematician

Leonardo Pisano Fibonacci (1170–1240 or 1250) was an Italian number theorist. He introduced the world to such wide-ranging mathematical concepts as what is now known as the Arabic numbering system, the concept of square roots, number sequencing, and even math word problems. Fast Facts: Leonardo Pisano Fibonacci Known For: Noted Italian mathematician and number theorist; developed Fibonacci Numbers and the Fibonacci SequenceAlso Known As: Leonard of PisaBorn: 1170 in Pisa, ItalyFather: GuglielmoDied: Between 1240 and 1250, most likely in  PisaEducation: Educated in North Africa; studied mathematics in Bugia, AlgeriaPublished Works: Liber Abaci (The Book of Calculation), 1202 and 1228; Practica Geometriae (The Practice of Geometry), 1220; Liber Quadratorum (The Book of Square Numbers), 1225Awards and Honors: The  Republic of Pisa  honored Fibonacci in 1240 for advising the city and its citizens on accounting issues.Notable Quote: â€Å"If by chance I have omitted anything more or less proper or necessary, I beg forgiveness, since there is no one who is without fault and circumspect in all matters.† Early Years and Education Fibonacci was born in Italy but obtained his education in North Africa. Very little is known about him or his family and there are no photographs or drawings of him. Much of the information about Fibonacci has been gathered by his autobiographical notes, which he included in his books. Mathematical Contributions Fibonacci is considered to be one of the most talented mathematicians of the Middle Ages. Few people realize that it was Fibonacci that gave the world the decimal number system (Hindu-Arabic numbering system), which replaced the Roman numeral system. When he was studying mathematics, he used the Hindu-Arabic (0-9) symbols instead of Roman symbols, which didnt have zeros and lacked place value. In fact, when using the Roman numeral system, an abacus was usually required. There is no doubt that Fibonacci saw the superiority of using Hindu-Arabic system over the Roman Numerals. Liber Abaci Fibonacci showed the world how to use what is now our current numbering system in his book Liber Abaci, which he published in 1202. The title translates as The Book of Calculation. The following problem was written in his book: A certain man put a pair of rabbits in a place surrounded on all sides by a wall. How many pairs of rabbits can be produced from that pair in a year if it is supposed that every month each pair begets a new pair, which from the second month on becomes productive? It was this problem that led Fibonacci to the introduction of the Fibonacci Numbers and the Fibonacci Sequence, which is what he remains famous for to this day. The sequence is 1, 1, 2, 3, 5, 8, 13, 21, 34, 55... This sequence  shows that each number is the sum of the two preceding numbers. It is a sequence that is seen and used in many different areas of mathematics and science today. The sequence is an example of a recursive sequence. The Fibonacci Sequence defines the curvature of naturally occurring spirals, such as snail shells and even the pattern of seeds in flowering plants. The Fibonacci Sequence was actually given the name by a French mathematician Edouard Lucas in the 1870s. Death and Legacy In addition to Liber Abaci, Fibonacci authored several other books on mathematical topics ranging from geometry to squaring numbers (multiplying numbers by themselves). The city of Pisa (technically a republic at that time) honored Fibonacci and granted him a salary in 1240 for his help in advising Pisa and its citizens on accounting issues. Fibonacci died between 1240 and 1250 in Pisa. Fibonacci is famous for his contributions to number theory. In his book, Liber Abaci, he introduced the Hindu-Arabic place-valued decimal system and the use of Arabic numerals into Europe.He introduced the bar that is used for fractions today; previous to this, the numerator had quotations around it.The square root notation is also a Fibonacci method. It has been said that the Fibonacci Numbers are natures numbering system and that they apply to the growth of living things, including cells, petals on a flower, wheat, honeycomb, pine cones, and much more. Sources â€Å"Leonardo Pisano Fibonacci.†Ã‚  Fibonacci (1170-1250), History.mcs.st-andrews.ac.uk.Leonardo Pisano (Fibonacci). Stetson.edu.Knott, R. â€Å"Who was Fibonacci?† Maths.surrey.ac.uk.

Impact of telecommunications in the work setting Free Essay Example, 2000 words

The Impact of Telecommunications in the Work Setting David Shope National The Impact of Telecommunications in the Work Setting Introduction The term ‘telecommunications’ is broad and encompassing across different root words: telephone, telegraph and communications. As one searched on more accurate definition of the term, the search engine came up with more than 60.1 million results in a matter of 0.24 seconds (Google, 2013). One simple definition indicated that it is the â€Å"is the exchange of information over significant distances by electronic means† (Rouse, 2007, par. 1). Another more detailed definition of the term disclosed its meaning as the â€Å"science and technology associated, in general, with communications at a distance. A telecommunications system requires a analog or digital transmitter, a compatible receiver, and a physical (cable or wire) or non-physical (wireless) connection† (Web Finance, Inc. , 2013, par. 1). Messerschmitt (1996) revealed that â€Å"the term telecommunications is derived from â€Å"tele†, meaning at a distance, and â€Å"communications†, meaning exchanging of information† (p. 1). If defining the term apparently generated voluminous results, one was more intrigued on how telecommunications have evolved and impacted the contemporary work setting. We will write a custom essay sample on Impact of telecommunications in the work setting or any topic specifically for you Only $17.96 $11.86/pageorder now In this regard, the current discourse aims to present the impact of telecommunications in contemporary work settings, or how telecommunications have significantly shaped the work place. Historical Overview of Telecommunications A discussion on the historical background of telecommunication actually traced its origins from the discovery of the telephone by Alexander Graham Bell in 1876 (von Alven, 1998), 137 years from now. Previous to that, it was interesting to note that forms of communication included fire signals, carrier pigeons, and even a line of canon that relayed relevant messages (von Alven, 1998). Also, other communication patterns such as the Chappe brothers’ semaphore system which â€Å"consisted of movable arms on a pole whose positions denoted letters of the alphabet† (von Alven: Early Beginnings, 1998, par. 1) and the electric telegraph were also noted. Telecommunications in the 21st century has evolved in a rapidly changing pace due to the merging with the computer industry and the emergence of the Internet (Messerschmitt, 1996). As such, it pervaded vast industries and endeavors that transformed diverse facets of the work setting through increased access to information and t hrough the use of new technologies and communications facilities that provided new applications in faster, greater and wider scope.

Cja 384 Controlling Organized Crime - 1370 Words

My paper will cover the topic of how to how control organized crime and not just in the United States of America but also abroad. This is a country and others are wrought with opportunities, but many would seek to use those opportunities improperly to illegal ends. The consequences of these criminals and their actions can be detrimental to the overall well-being of the general populace by introducing negative elements into the greater whole of society. For that reason, and many others, numerous agencies were created to police these crimes and the people who perpetrate them. Varying jurisdictions from local to federal are normally involved in the investigation and apprehension of these individuals. But before one can discuss the topic of†¦show more content†¦These things make up for a vast amount of the overall profit made by certain individuals involved with organized crime. The second objective of these individuals is predatory crime. Some examples of this might include ass ault, arson, kidnapping, or robbery. These are the more socially reprehensible crimes which give organized crime its relative bad reputation. While many citizens would not condone many of these actions, they might unknowingly sponsor their occurrence by indirectly funding them. Organized crime can be narrowed down to five unique areas of criminal activity. The first being racketeering, an umbrella term, meant to describe when any group or groups conduct one or more of the other criminal activities. One of the most successful ways the federal government has been able to hinder the actions of hardcore criminals is through the formation of the RICO Act (Racketeer Influenced and Corrupt Organizations). The second area of major criminal activity is vice, or vice operations. This has to do with victim-less crimes such as drugs, gambling, and prostitution. Again, these crimes are highly problematic because it is the public that decides whether or not they prosper. It’s all too easy to build a case against someone breaking a law by importing huge quantities of controlled substances across a border, but it becomes much more difficult to stem the sale or need for such drugs once they have reached their intended destinations. The thirdShow MoreRelatedControlling Organized Crime1200 Words   |  5 PagesControlling Organize Crime Paper Louis Pierre CJA/384 May 6, 2013 University of phoenix Professor: Glen Winters Controlling Organize Crime Paper Organize crime is a conspiratorial activity involving the coordination of numerous people in the planning and execution of illegal acts or in the pursuit of a legitimate objective by unlawful means, for example, threatening a legitimate business to get stake in it. However, organize crime involves continuous commitment by primary members, althoughRead MoreControlling Organized Crime Paper1163 Words   |  5 PagesControlling Organized Crime Paper CJA/ 384 August 19, 2013 Controlling Organized Crime Paper Organized crime is an issue that has existed for many years and continues to be on the rise especially with the technology that we have today. Well – known criminal organizations include; Italian Mafia, Russian Mobsters, Nuestra Familia, Mexican Mafia, The Hell’s Angels, The Bandidos, John Gotti, Al Capone, and so much more. One of the most famous criminal organizations are the Gambino Family inRead MoreControlling Organized Crime Paper1206 Words   |  5 Pagesï » ¿ Controlling Organized Crime Tina Martin-Fleming CJA/384 February 19, 2015 Charles Davis Organized crime groups have been around since the 1900’s. The mafia who came from Italy and other countries to the United States started their business and became a nuisance over a period. The mob became a problem for society with their illegal activities such as gambling, racketeering and prostitution that includes other violent behaviors. The mafia was famous for manipulating individuals with their

Accounting vs Economic Income Free Essays

Accounting vs. Economic Income Abstract This paper explores further into two different peer reviewed articles, and one chapter of an accounting book. These articles express the dynamics of accounting and its perspectives. We will write a custom essay sample on Accounting vs Economic Income or any similar topic only for you Order Now It also equates for how they are determined and the usefulness of the income based on changes in the value of credits and liabilities. In addition, it expresses the need for education in both forms of income, and specific training required to truly understand the differences. Keywords:Accounting, Investments, Income, Assets, Liabilities Accounting versus Economic Income Introduction Accounting income and economic income may sound the same, but they vary greatly. Knowing the correct terminology is the mark of a true professional. (Kida Hicks, 1982) There are several definitions and several different ways to approach the topic, but altogether they establish a better understanding. In accounting income and economic income there is more to them, than just definitions. There should be a clear understanding and precise knowledge of the two. Summary Economic income represents an increase in the command over goods and services, or as economists refer to it as a measurement of â€Å"better-offness† (Walther, 2010). The Hicks approach addresses economic income is a change in wealth. This is simplified by a consumption of withdrawals by owners and savings, which constitute changes in an owner’s wealth. (Lamberg, 2002) Both interpretations of the economic income are very similar, and rely on wealth. In economics, value and income concepts are thought of in terms of theoretical concepts. † (Kida Hicks, 1982) Accounting income can be defined per word. Where â€Å"accounting measurements tend to be based on historical cost determined by reference to an exchange transaction with another party (such as a purchase or sale) and income represents â€Å"revenues† minus â€Å"expenses† as determined by reference to those transact ions or events. † (Walther, 2010) The FASB (Financial Accounting Standards Board) approach to accounting income is revenues, plus ains, minus losses, and minus expenses, but the IASC (International Accounting Standards Committee) refers to accounting income as revenues plus gains. (Lamberg, 2002) Several different approaches to the accounting income, but in general they are all alike. â€Å"The concept of income for accounting purposes has been traditionally based on a set of rules and regulations utilizing an historical cost approach. † (Kida Hicks, 1982) In order to see if students in college could really understand the differences in the two, a study was done. The purpose of this study was to test for income and value concepts to trained students in accounting and those not trained. † (Kida Hicks, 1982) The original hypothesis of this test was the students without the accounting education would tend to leer toward and economic approach or value based accounti ng system where income is viewed as a change in wealth, and the students with the knowledge and understanding would recognize the accounting procedural approach closely related to the historical cost convention. Kida Hicks, 1982) A ten question multiple choice test was given out to 438 students at several universities, 206 with accounting training and 232 without any accounting knowledge. The original hypothesis was confirmed. The students without any accounting knowledge generally leered to an economic standpoint, and thought there answers were in a justified manner. â€Å"It appears that the students often become so adept at learning specific rules and regulations of accounting procedure that they overlook the more global issue of just what it is they are measuring. (Kida Hicks, 1982) Students need an appreciation of the dynamics of accounting. (Lamberg, 2002) Conclusion In conclusion, economic income is basically about wealth, accounting income is mainly based more on how ever yone determines the status of a company’s financial status. Accounting and economic knowledge is very useful. It continues to grow more and more in depth and knowledge is needed for all students in order to succeed in the business world. In today’s colleges, economic income concepts with the accounting procedural approach in both economics and accounting courses need to be implemented. In addition, it may be desirable to require an advanced economics course for accounting majors which reemphasizes the theoretical value based concepts. † (Kida Hicks, 1982) References Kida, T. , Hicks, D. (1982). Economic versus Accounting Income: The Impact of Education on students concepts. Journal of Economic Education, EBSCO Host acessed August 2010 , 40-46. Lamberg, E. (2002). Economic versus Accounting Income. Business Source Complete Database , 30-34. Walther, L. (2010). Chapter 3 Income Measurement (27-44). Retrieved from Principles of Accounting: http://www. principlesof accounting. com/pdf/Chapter%203id. v. 070107. pdf How to cite Accounting vs Economic Income, Papers

Marketing Selling and Creating Value

Question: Discuss about theMarketing for Selling and Creating Value. Answer: Introduction: The word marketing means many different things to many different people (whether they are directly involved in marketing or not). Why do you think this is? Marketing is termed by different people in various ways and it is assumed that marketing has only to do with selling. There are various concepts of marketing which are unknown to different people from various backgrounds. It makes more sense to understand the concept of marketing and the intention with which the concept has been introduced in the Product based world (AMA nd). There are various ways in which people imagine the concept of marketing like Marketing usually involves selling and creating value. In a generic way creation of value to the Customers is missed out (Lars Perner nd) Marketing usually involves sales calls and a lot of interactions between the buyers and the sellers It is generally assumed that marketing for the growth of the Company alone and it does not intend to create any value to the Customers Different Organizations create different products however they generate little value to their Customers which ultimately gets highlighted and the Customers feel that the Companies dont pay desired attention to their needs Customers feel that the value of the Products should be seen from their perspective than viewing them from a product category alone. This aspect creates and sustains a greater value in relation to the other competitors in the market as the Customers feel that they are being valued and considered while the Companies design their products References AMA nd., Marketing, Viewed on Aug 15th 2016, https://www.ama.org/AboutAMA/Pages/Definition-of-Marketing.aspx Lars Perner nd., Consumer Behaviour, Viewed on Aug 15th 2016, https://www.consumerpsychologist.com/marketing_introduction.html Pros and cons of some of these definitions and which one(s) best represent(s) what marketing is truly about? Marketing is a vast subject or an activity which is adapted and implemented by various Organizations for the process of strategizing, creating, implementing and monitoring a specific product or a service. Marketing offers various products and services to a no. of Customers and Stakeholders in order to identify products and services through different marketing opportunities and generate greater marketing revenues through a consistent performance (Brassington Pettit 2013). Marketing is conducted in various forms and by different audience through various media platforms because of which it is defined in various ways. For example AMA defines marketing as a process of strategizing, creating, implementing and monitoring a specific product or a service (AMA nd). Dr. Philip Kotler defines marketing as a science and an art of exploring, designing and delivering a greater value in order to satisfy the customer wants or any of the target markets in order to generate greater revenue. The best marketing definition is of Dr. Philip Kotler where it caters to different products and to a no. of business firms. Pros The Pros of having a set of marketing definitions is that the brand can reach out to a maximum no. of audience through its varied set of ideas and concepts based on which it intends to deliver its products and services. The reason varied is justified in this context because the company attempts to create various marketing campaigns in order to tap different audiences and their requirements (Amber Keefer nd). Cons Even without ensuring that there is a scope of entry marketing definitions includes a lot of terms which might not be of any value to the Customers. References AMA nd., Marketing, Viewed on Aug 15th 2016, https://www.ama.org/AboutAMA/Pages/Definition-of-Marketing.aspx Brassington F. Pettit S. (2013) Essentials of Marketing, Harlow: Pearson. Amber Keefer nd., Pros Cons of a Global Marketing Strategy, Viewed on Aug 15th 2016, https://smallbusiness.chron.com/pros-cons-global-marketing-strategy-40456.html Arguments for and Against the Practice of Marketing? There are various concepts for and against the concept of marketing because of various factors like Cost The marketing programs attract various costs where most of the funds are derived from the public funds in terms of resources. The concepts of marketing are also becoming vague where they are being made to tap the audiences to get attracted to their products however there has been a showcase of a lot of negative aspects in the marketing campaigns (Baines, Fill Page 2011). For Example there are some marketing campaigns where the women are used to portray the quality of the product which can be avoided in order to convey a positive outlook for the brand (Dibb, Pride Ferrell 2012). In turn the audiences would like to buy the products based on a quantitative feedback where the numbers would give them a clear understanding of the value which the product would provide like the marketing campaigns could involve questionnaires, surveys, samples, interviews and market research which would prove to be a lot more worthy to the Customers. According to Kotler broadening the concept of marketing is a critical way of ensuring that the products are marketed and sold in the right way (Kotler, Armstrong, Harris Piercy 2013). Criticism to social marketing can be avoided by introducing the authentic practices of marketing for all the products and services through strategic marketing where marketing can be performed in a disciplined way. References Dibb S., Simkin L., Pride W., Ferrell O. (2012) Marketing, Concepts and Strategies, Andover: Cengage Baines P., Fill C., Page K. (2011) Marketing, Oxford: Oxford University Press. Kotler O., Armstrong G., Harris L., Piercy N. (2013) Principles of Marketing, Harlow: Pearson