StudentShare
Contact Us
Sign In / Sign Up for FREE
Search
Go to advanced search...

Markets and the Economy - Admission/Application Essay Example

Comments (0) Cite this document
Summary
The world financial market is in great turmoil today, as shown by the wild fluctuations in the major stock markets during the past few weeks. There is a lot happening today that can be confusing to some people and this paper tries to explain the reasons behind these major events. …
Download full paper File format: .doc, available for editing
GRAB THE BEST PAPER96.9% of users find it useful
Markets and the Economy
Read Text Preview

Extract of sample "Markets and the Economy"

Download file to see previous pages The following paragraphs take a close look at the connections between economic actions and the results it bring to ordinary citizens; these try to help explain the reasons behind them too.
Federal Budget Deficits – the recession that started sometime in 2007 still has lingering effects on the economy even now. The current administration of President Barack Obama has the worst of it, much of the problems with the deficit and debt being merely inherited and yet it gets blamed for these continuing fiscal and financial problems. Many people see these twin problems for their negative effects on the nation's economy by depriving people of their employment that had also reduced consumer confidence to their lowest levels in recent memory. The deficit in the nation's budget is seen as purely a negative event, caused by profligacy and ill-advised policies. However, deficit spending can also help stabilize the economy and here's how that happens.
Deficit spending by the Federal government is the money being spent that is over that of any expected revenues (a negative budget); this type of fiscal policy is designed to counteract all the negative effects of a shortfall in the aggregate economic demand. This is where government can do its part of stimulating the economy whenever the private sector fails the duties of leading the economy by increasing overall demand. The approach using deficit spending had been used to a marked effect before, during the Great Depression of the 1930s. When Big Business failed during those turbulent times, the government stepped in by providing a needed shot in the arm to the economy by undertaking massive public infrastructure projects. A failure of capitalism allows the government to take up the slack by its deficit spending. It is vital the Fed does not monetize these deficits; otherwise, it can lead to inflation because the tendency is to make the interest rates rise if deficits are large and persistent (Baumol & Blinder, 2011, p. 712). However, there must be a distinction between having a large budget deficit and having an intentional deficit spending policy. The first situation can lead to a deterioration in government's finances over the long term; while the second event (deficit spending) should only be temporary. Persistent budget deficits had led to the credit rating downgrade recently and has serious negative consequences. The country cannot just continually borrow money forever and keep spending the money it does not have. On the other hand, deficit spending is a temporary measure designed to revive the economy when it falls into a slump or recession. The New Deal economic programs of Franklin Delano Roosevelt were intended to achieve the three Rs, namely: relief for the millions of jobless people, revive the economy and reforms (political, social and financial). The financial stimulus package of Pres. Obama was designed almost the same way with the same objectives. Adjustments in Prices and Wages – market equilibrium (balance) is achieved whenever the demand and supply forces are equal to each other. The tendency is to maintain this balance unless external forces disrupt it. In classical ...Download file to see next pages Read More
Cite this document
  • APA
  • MLA
  • CHICAGO
(“Markets and the Economy Admission/Application Essay”, n.d.)
Retrieved de https://studentshare.org/macro-microeconomics/1390800-markets-and-the-economy
(Markets and the Economy Admission/Application Essay)
https://studentshare.org/macro-microeconomics/1390800-markets-and-the-economy.
“Markets and the Economy Admission/Application Essay”, n.d. https://studentshare.org/macro-microeconomics/1390800-markets-and-the-economy.
  • Cited: 0 times
Comments (0)
Click to create a comment or rate a document

CHECK THESE SAMPLES OF Markets and the Economy

Chinese Economy

As the Chinese government opens its doors to the outside world, China, with its vast lands and the huge supply of labor, is fast becoming one of the world’s most favorite places for investors.
At present, China had developed a hybrid economic structure where half of the economy is still controlled by the government through state ownership of different business establishments and half is now an open market. As one of the world’s leading manufacturers, China is gaining ground. Foreign Direct Investment (FDI) had increased dramatically over the two decades since its economic liberalization began. However, there are important consequences that China must face as its FDI increases. First, China must accelerate integrat...
9 Pages (2250 words) Assignment

Financial Markets and the SEC

The regulation of the American financial markets is the responsibility of the government. Since the governmental system in America is democratic, it can be said that the finance market laws represent the wishes of the people in a very significant way. Previous governments have recognized the need to establish independent bodies for monitoring, evaluation and regulatory purposes for a variety of industries. The Federal Communications Commission (FCC) regulates the telecom industry; the Environmental Protection Agency checks the controls on pollution and so on (Wikipedia, 2006).

Historically, the financial markets in America were first brought into defined regulatory control with the passing of the Federal Trade Commissio...
6 Pages (1500 words) Case Study

History of Gas Prices and their Effect on the Economy

The relation of inflation within a society with the ever-changing oil and gas prices is pretty much significant and one must understand that there is a strong bond present between the two. This strong linkage allows for prices to shoot up whenever there is a sudden upward trend experienced in the oil and gas prices and whenever the gold rates have increased on the global front. With so much at stake and economies coming to a standstill with the uprising trend in the oil and gas prices on a global level, one can only expect problems coming to the fore of the common man and woman present on the street. The worst possible explanation given by experts in the field of oil and gas prices’ regimes is that these are done to benefit...
9 Pages (2250 words) Coursework

An Outlook of U.K Economy

The UK has large coal, natural gas, and oil reserves; primary energy production accounts for 10% of GDP, one of the highest shares of any industrial nation. Services, particularly banking, insurance, and business services, account by far for the largest proportion of GDP while industry continues to decline in importance. GDP growth slipped in 2001-03 as the global downturn, the high value of the pound, and the bursting of the "new economy" bubble hurt manufacturing and exports. Output recovered in 2004, to 3.2% growth, then slowed to 1.7% in 2005 and 2.7% in 2006. “ (Exxun.com, 2007)

The most prominent characteristic of the capitalist economy is the control of few people on a large amount of Capital. These people...
6 Pages (1500 words) Term Paper

Money & Capital Markets

The subprime lending crisis rocked the U.S. economy in late 2006 and early 2007. Subprime lending refers to the loans which are provided to the borrowers having less than ideal credit histories. In other words, subprime lending is provided to persons who do not qualify for conventional credits or loans.

The subprime loans gave rise to inflated credit facilities, increased availability of infrastructure and more circulation of more currency in the economy. But this system also gave rise to unprecedented meltdown, liquidation of funds and resultant heavy losses of financial institutions due to non-payment of loans by the borrowers.

The main reasons for the crisis are more than one. They are the failure of the b...
10 Pages (2500 words) Assignment

Growth Performance of Indian Economy

This percentage is expected to rise to 70% by 2030 - the largest in the world, according to a report titled Destination India- from the Investment Commission of India.” (Hood).
We all know that for more than a century, the United States has been one of the largest economies in the world. However the past few years showed major development in some countries, and the focus moved to Asian countries like India and China which were progressing very fast.

According to the experts, share in the total world GDP of India will rise from 6% to 11% by the year 2025. The GDP of India rose to 9.0% during the year 2005-06 again to 9.4% in 2006-07. The projection reports say that India will be 60% the size of the US economy...
6 Pages (1500 words) Assignment

Organizational Behaviour, Types of Ownership, and Mixed Economy Issues

Knowing the two friends are likely to receive a quite large redundancy package from their employers, they are discussing how they will use this. They are seriously considering getting together to run the business already owned by one of them.

Originally, the form of business is a ‘Sole Trader’ since there is only one person who owns and runs the business. As soon as the small-time business owner and his friend agree to get together to run the business, both are likely to form a ‘partnership’ business. Normally, a partnership business is owned by two or more individuals who have decided to set up a business. (Weber, 2007) In the process, the partners will share the risks and liabilities as well a...
8 Pages (2000 words) Assignment

The Importance of Tourism to the World Economy

Since the eighties, perceived risk research has been of ongoing interest to tourism researchers, Dolnicar (2005) and Dickson, Chapman, and Hurrell (2000)  states. Contributions often include those which investigate positive risk as a factor in increasing tourists who are seeking a thrill. On the other hand, there are also those who view these risks as something negative, thus avoiding the destinations which are haunted by different risks such as diseases, terrorism and other forms of political instability (Dickson & Tugwell, 2000).

The current qualitative research inquired about the risks perceived by young people as regards both domestic and international traveling. A sample of 23 was interviewed for this purp...
15 Pages (3750 words) Research Paper

Emergency Economic Stabilization Act of 2008 and How It Has Impacted the Financial Markets

Though there were objections from various quarters about the huge amounts of tax payer’s money being used in the bailout of huge corporates, the Act has been successful in moving the downturn towards a flat point and now has started slowly moving towards a recovery stage. The various programs under the EESA 2008 have played a significant role in the financial sector, housing mortgage, and banking institutions to save the institutions from complete disaster.

The Emergency Economic Stabilization Act is a huge taxpayer bailout designed to rescue the financial sector. The amount of money to be used is around $700 billion or $2000 per American citizen (Public mark up). Emergency Economic Stabilization Act of 2008 is al...
10 Pages (2500 words) Research Paper

The International Political Economy of Nursing

Surveys involve the formulation of questions that assist in the gaining of evidence. Other clinical methods such as testing the hypothesis are applied in the collection of data for the formulation of evidence. Evidence-based practice is a vital approach in the field of clinical practice because it does not only put into consideration the current state of the patient but also the previous data and experience on the issue. To understand the connection between evidence-based practice and clinical appraisal, some past information is necessary for consideration. Evidence-based practice can historically be said to have started from the field of medicine, with an earlier name of evidence-based medicine. The simple application of this pra...
7 Pages (1750 words) Assignment
sponsored ads
We use cookies to create the best experience for you. Keep on browsing if you are OK with that, or find out how to manage cookies.

Let us find you another Admission/Application Essay on topic Markets and the Economy for FREE!

Contact Us