The U.S economy declinedby 0.1% in the fourth quarter of 2012 however this downfall did not worry the economists as they predict a better future. According to the economists who were very positive about the year 2013, the economy is likely to expand approximately 2%.
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The better looking components of the GDP were housing, business investments in software and equipment and increased consumer spending. Consumer spending is a key element for the betterment of the economythis year as seen it augmented at a 2.2% rate as compared to 1.6% in the third quarter. This was most probably because the personal income had increased by 2.8 percent in December 2012 (bea.gov)
1c. According to the Federal Reserve officials the downfall in economic growth in the fourth quarter of 2012 seems to be mainly due to ‘weather-related disturbances and various other temporary factors. However budget tightening is also a leading factor in the economic fall this quarter such as military spending that went down at a rate of 22.2% (Mitchell, 2013). The situation is likely to move towards betterment as the consumers are becoming more confident as prices of homes is increasing which gives them a feeling of security. As companies in the U.S invest more in equipment and software and consumers spending power growing, the economic situation might get better in 2013.
1d. The U.S economy was in trough in 2009 but it seems now that currently it is just about to enter the expansion phase. With the all the positive energy of the economy experts and their hopes up we might just see a bright future after all.
2b. There have been many reasons for the increase in value of Euro. People are now much relaxed about the death of the currency as the crisis no longer seems to be a threat so investors are not selling the currency in exchange for the dollar. As the U.S economy seems to topple as seen in the fourth quarter of 2012, the Euro has gained strength since the report.
2c. An ascending Euro is very useful for the Euro zone countries for obvious reasons such as a strong economy. There also a disadvantage to a strong Euro; as the currency ascends it threatens the export industry as the trading partners find it over expensive. For more developed countries the
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