econ 231

Must be at least 6 pages orignal work ….willing to pay a little more if the work is quality

 

 

ECON545: Project 2—Macroeconomic Analysis

 

The Macroeconomic Paper tests your ability to apply economic principles to a business decision considering the impact of macroeconomic variables. Select one situation from the items outlined below: A to D. Complete the paper on the selected situation as specified below. The completed paper is a professional report and is due in Week 6 (260 Points). See the grading rubric at the end of this document. Be sure to use the DeVry library to find data, and avoid questionable sources, such as Wikipedia.

 

Each of the scenarios has a list of Macroeconomic areas you are to address, with sources, in your answer. Briefly you are to research and show how these apply to your scenario: GDP growth rate (20 points), the business cycle (30 points), fiscal policy and level of unemployment (50 points), monetary policy and interest rates (50 points), international trade (40 points), and demographics (20 points).

 

 

 

Situation A

 

Rick, your friend, runs a small manufacturing plant that produces parts for the auto industry. Rick is thinking of expanding his operations to meet the increasing demand from car manufacturers. Hearing of your taking this course in business economics, he asks you for advice on how to go about making the expansion decision.

 

At first you are reluctant to give investment advice, but then you happen to read the piece “U.S. Auto Sales Estimates Cut as Confidence Slows Rebound” on page 634 of the textbook. You suddenly realize that Rick needs to take a number of macroeconomic variables into consideration for the expansion decision. You decide to research the economy in terms of GDP growth rate, interest rates, level of unemployment, the business cycle, fiscal policy, monetary policy, international trade, and demographics. You want to provide Rick with the most informed advice possible.

 

 

Macroeconomic Paper as a Professional Report

Your paper should be organized into five parts as listed below.

 

1.       Title Page: Name, class, and date

2.       Introduction to situation but do NOT copy the scenario. Briefly summarize the situation and identify the macroeconomic issue(s) to be decided from the perspective of the organization.      

 

3.       Business Cycles, Unemployment, Inflation, International – Comparative Advantage, Exchange Rates, Trade, Etc., Monetary Policy and Interest Rates, and Fiscal Policy and Unemployment Identify the variables that are critical in addressing the issue(s). Gather and present the relevant data on the variables by searching the DeVry Online Library. Ask a librarian for help if needed. Use in-text citation to report the source(s) of the data. Graphs may be included here.

 

4.       Recommendations and Economic Justification

Formulate and present your recommendations for addressing the issue(s) based on the relevant data and economic principles identified above. Justify your recommendations in terms of the economic impact on those affected.

 

5.       References

List the full references for at least five sources alphabetically in APA format

 

Text Book…Page 634

 

AN INSIDE LOOK AT POLICY Analysts Lower Estimates for New Car Sales in 2011 and 2012

 

BLOOMBERG

 

U.S. Auto Sales Estimates Cut as Confidence Slows Rebound

 

Analysts are reducing estimates for U.S. automobile sales for 2011 and 2012, citing weak consumer confidence that has slowed the pace of recovery since May.

 

J.D. Power & Associates lowered its estimate for U.S. auto sales in 2011 by 300,000 light vehicles to 12.6 million, the Westlake Village, California-based researcher said today in a statement. J.D. Power reduced its estimate for next year by 600,000 cars and light trucks to 14.1 million.

 

The reduction by J.D. Power follows analysts at IHS Automotive in cutting expectations below the sales forecasts given by General Motors Co. (GM) and Ford Motor Co. (F), the largest U.S. automakers. JPMorgan Chase & Co., Goldman Sachs Group Inc. and RBC Capital Markets LLC also shaved estimates this month.

 

a “The thought of a second-half recovery is just not in the cards,” Jeff Schuster, J.D. Power’s executive director of global forecasting, said today in a phone interview. “It really comes down to consumer confidence and consumers just don’t have any right now. There just really isn’t a strong reason to go make that big-ticket purchase.”

 

Consumer confidence in the U.S. economic outlook slumped in August to the lowest level since the recession, raising the risk that spending will dry up. The Bloomberg Consumer Comfort Index’s monthly expectations gauge dropped to minus 34, the weakest since March 2009, from minus 22 in July.

 

Applications for unemployment benefits climbed last week to the highest level in a month, Labor Department figures showed today in Washington.

 

Goldman Cuts

 

Goldman Sachs today lowered its 2012 U.S. auto sales estimate by 1 million light vehicles to 13.5 million. The New York–based investment bank sees 12.8 million deliveries this year. RBC Capital earlier this week lowered its estimates for 2011 by 200,000 units to 12.5 million and by 700,000 to 13.3 million for next year.

 

“Fragile U.S. consumer sentiment and recently tempered economic expectations” led to the reductions, Seth Weber, an RBC Capital analyst based in New York, said in an Aug. 16 research note. . . .

 

GM, Ford Estimates

AN INSIDE LOOK AT POLICY Analysts Lower Estimates for New Car Sales in 2011 and 2012

 

BLOOMBERG

 

U.S. Auto Sales Estimates Cut as Confidence Slows Rebound

 

Analysts are reducing estimates for U.S. automobile sales for 2011 and 2012, citing weak consumer confidence that has slowed the pace of recovery since May.

 

J.D. Power & Associates lowered its estimate for U.S. auto sales in 2011 by 300,000 light vehicles to 12.6 million, the Westlake Village, California-based researcher said today in a statement. J.D. Power reduced its estimate for next year by 600,000 cars and light trucks to 14.1 million.

 

The reduction by J.D. Power follows analysts at IHS Automotive in cutting expectations below the sales forecasts given by General Motors Co. (GM) and Ford Motor Co. (F), the largest U.S. automakers. JPMorgan Chase & Co., Goldman Sachs Group Inc. and RBC Capital Markets LLC also shaved estimates this month.

 

a “The thought of a second-half recovery is just not in the cards,” Jeff Schuster, J.D. Power’s executive director of global forecasting, said today in a phone interview. “It really comes down to consumer confidence and consumers just don’t have any right now. There just really isn’t a strong reason to go make that big-ticket purchase.”

 

Consumer confidence in the U.S. economic outlook slumped in August to the lowest level since the recession, raising the risk that spending will dry up. The Bloomberg Consumer Comfort Index’s monthly expectations gauge dropped to minus 34, the weakest since March 2009, from minus 22 in July.

 

Applications for unemployment benefits climbed last week to the highest level in a month, Labor Department figures showed today in Washington.

 

Goldman Cuts

 

Goldman Sachs today lowered its 2012 U.S. auto sales estimate by 1 million light vehicles to 13.5 million. The New York–based investment bank sees 12.8 million deliveries this year. RBC Capital earlier this week lowered its estimates for 2011 by 200,000 units to 12.5 million and by 700,000 to 13.3 million for next year.

 

“Fragile U.S. consumer sentiment and recently tempered economic expectations” led to the reductions, Seth Weber, an RBC Capital analyst based in New York, said in an Aug. 16 research note. . . .

 

 

GM, Ford Estimates