Rasmussen College Impact of Monetary Fiscal Policies on IPhone Purchases PPT


Question Description

For your final course project assignment, you will compile each of the module course project submission into a PowerPoint Presentation to demonstrate your ability to provide a comprehensive presentation on the chosen course project product.

Topics that will be incorporated into your final course project assignment include:

  • How does an increase in fiscal policy affect consumers' ability to purchase the iPhone 6 plus?
  • How does a decrease in fiscal policy affect consumers' ability to purchase the iPhone 6 plus?
  • Does monetary policy affect the sale and purchase of the iPhone 6 plus in a negative manner?
  • Does monetary policy affect the sale and purchase of the iPhone 6 plus in a positive manner?

Your PowerPoint Presentation should include the following:

  • Title slide
  • Introduction slide
  • Two or more slides per assignment
  • Summary slide
  • Reference slide

Unformatted Attachment Preview

Running head: CONSUMER DEMAND ANALYSIS Consumer Demand Analysis Jolanda Harrison Rasmussen College 1 CONSUMER DEMAND ANALYSIS 2 Consumer Demand Analysis Economic fluctuations, unemployment, inflation all impact the demand and supply of goods. Taking the example of the iPhone 6 Plus, the present analysis investigates how such factors impact the sale of the product. How Economic Fluctuations Affect the Sale of the IPhone 6 Plus Like other iPhone releases, the iPhone 6 plus was received with high expectations as consumers ordered the gadget at a speed that Apple could not deliver. Considering the premium pricing on the product, a decline in market demand would result in reduced number of sales for iPhone 6 plus phones. If there was an increase in the national income, this would be indicative of economic growth, which would mean that consumers would have more disposable income to spend on iPhones. The increase in national income would result in increased demand and supply, resulting in more sales. Unemployment That Would Result If the Economies of the United States and China Began To Contract and Why If there was a contraction in the economies of China and the United States, workers would lose their jobs in form of cyclical unemployment. This form of unemployment occurs during downturns in the country’s business cycle. Cyclical unemployment would result because the GDP of China and the United States would contract (Baker, & Yannelis, 2017). Facing recession, business sales and revenues would reduce, and business would cease expansion. There CONSUMER DEMAND ANALYSIS 3 would be a considerable drop-off of demand, usually because of less personal consumption and a decline in revenues. Companies would be forced to lay off workers for profit margins. The contracting of the economies would result in contracting GDP growth (Baker, & Yannelis, 2017). Negative economic growth associated with less consumer and business spending, and less banking activities, would result in loss of jobs raising the cyclical unemployment rate. Causes of Unemployment and State Whether Or Not Any of the Causes of Unemployment Affect the Market of the IPhone 6 Plus First, frictional unemployment entails the voluntary exit from the workforce, for instance, because one has saved enough money to quit employment. Moreover, this form of unemployment is caused by people leaving for better opportunities, relocating, and youth unemployment after college or degree programs (Baker, & Yannelis, 2017). Frictional unemployment results from unavoidable aspects of job search. Second, structural unemployment results from long-term unemployment, for instance, due to advances in technology which replaces robots. Moreover, structural unemployment results from job outsourcing to cheaper economies (Baker, & Yannelis, 2017). Third, cyclical unemployment occurs when there are few jobs in the marketplace compared to the applicants. This is a form of demand-deficient unemployment often during a recession in the business cycle. Cyclical unemployment is due to reduced consumer demand where demand falls and companies lose profits and are forced to lay off workers if the recession persists (Baker, & Yannelis, 2017). Lastly, raising the minimum wage unemployment is due to high wages where businesses are forces to let workers go because they are paying high wages per person. CONSUMER DEMAND ANALYSIS 4 Of all the aforementioned causes of unemployment, structural, cyclical, and raising the minimum wage unemployment would result in increased or decreased sales for iPhone 6 Plus. First, unemployment results in a drop in income, and structural, cyclical and frictional unemployment result in reduced consumer spending. With less consumer spending, the sales for iPhone 6 Plus would decline (Baker, & Yannelis, 2017). However, raising minimum wage unemployment would result in high disposable income for a portion of the population, which would increase demand for goods like iPhone 6 Plus. How Unexpected Inflation in the United States Would Affect the Sale of the IPhone 6 Plus When there is a rise in the prices of commodities and services, there is an impact on the economy. A rise in prices is referred to as inflation and it impacts the cost of living. On one hand, if inflation is reasonable and controlled, there is an increase in employment (Ganong, & Noel, 2015). The implication is that consumers will have more money and demand will increase for goods like iPhone 6 Plus (Ganong, & Noel, 2015). Over most periods, the rate of inflation is the same between wages and prices. The implication is that the rate over time of the economic status of consumers will not be significantly impacted by inflation. If wages, prices, and interest rates are immediately and automatically adjusted with inflation, then there would be no change in the sales of iPhone 6 Plus. However, if there is no adjustment, or thee is a time lag, then there would be unintended consequences (Ganong, & Noel, 2015). For instance, if minimum wage is adjusted a year or two after adjustment in prices, then workers would lose their purchasing power earned from their nominal wages and the demand for iPhone 6 Plus would drop. Conclusion CONSUMER DEMAND ANALYSIS There are various elements of the economy that impact the sales for products like iPhone 6 Plus. One of those elements is unemployment and a contraction in the economy and inflation. If such factors occur and are not adjusted immediately, there would be a drop in demand for iPhone 6 Plus. 5 CONSUMER DEMAND ANALYSIS 6 References Baker, S. R., & Yannelis, C. (2017). Income changes and consumption: Evidence from the 2013 federal government shutdown. Review of Economic Dynamics, 23, 99-124. Ganong, P., & Noel, P. (2015). How does unemployment affect consumer spending?. Unpublished manuscript, Harvard Univ., Cambridge, MA. http://scholar. harvard. edu/files/ganong/files/ganongmpnemploymentpending. pdf Article Location. Supply And Demand Outline iPhone 6 Plus Starting at 299 dollars apiece, the iPhone 6Plus registered 13 million users by the end of March 2015 A decrease in demand for the product will see the demand curve shift to the left. Supply Curve A rise in production cost will see the supply curve shift left, indicating a reduction in quantities produced and consequently supplied. Market Failure Market failure occurs in the event of an inefficient allocation of resources in a free market. Running head: SUPPLY AND DEMAND Supply And Demand: iPhone 6 Plus Jolanda Harrison Principles of Economics July 14, 2019 Rasmussen College 1 SUPPLY AND DEMAND 2 iPhone 6 Plus Starting at 299 dollars apiece, the iPhone 6Plus registered 13 million users by the end of March 2015 (Kelly, 2014). The demand was more significant than the supply at a price set by Apple for the smartphone; hence, the phone faced a shortage in the market. Therefore the initial price was below equilibrium. Demand Curve A decrease in demand for the product will see the demand curve shift to the left. This shift can be caused by factors such as a negative review on the product, or fall in the price of a substitute or even government warnings on specific products. All of these factors influence consumer preferences. An increase in demand is indicated by a shift of the demand curve to the right, which implies an increase in the quantity demanded at every price. Two factors that could lead to a product being demanded more could be a rise in consumer income or the fall in the price of a complement. Increase in income is a significant factor since individuals will want a product even if it is highly-priced since they can afford it. On the other hand, when a compliment is cheaper, the consumer can afford them as a pair (Xaxx, 2019; Sata, 2013). Supply Curve A rise in production cost will see the supply curve shift left, indicating a reduction in quantities produced and consequently supplied. An increase in input costs, for instance, will see a firm use more to produce one unit of product; hence, they will produce and supply less. Unfavorable government policies such as excessive taxation and regulation also increase the cost of production, making the firm provide less of a product, shifting supply curve left. SUPPLY AND DEMAND 3 The Supply curve will shift to the right if the prices of inputs fall. This movement implies that if the cost of iPhone components is cheap, then Apple would be motivated to produce more units of their products to sell and make more profits (Sata, 2013). This action would increase the number of product units supplied, shifting the curve to the right. Government policies may also affect the supply making it shift to the left through lowering taxes and friendly regulations and subsidies. Since all these governmental actions affect production costs, a reduced production cost is a motivation to produce more, shifting supply right. Market Failure Market failure occurs in the event of an inefficient allocation of resources in a free market. The iPhone 6 Plus was a case of market failure as a result of the already mentioned sate of disequilibrium, where the quantity demanded was not equal to that supplied by Apple. This disequilibrium may have been a result of Irrational Exuberance where people got carried away by the release information of the phones and could not make rational decisions, resulting in a shortage despite the costs being quite high. SUPPLY AND DEMAND 4 References Kelly, G. (2014, September 15). iPhone 6: Apple Confirms Record Pre-Orders And Big Supply Shortage. Retrieved from Forbes: https://www.forbes.com/sites/gordonkelly/2014/09/15/iphone-6-supply-shortage-appleconfirms-record-4-million-pre-orders/#1f25001464e0 Sata, M. (2013). Factors Affecting Consumer Buying Behavior of Mobile Phone Devices. Mediterranean Journal of Social Sciences, 4(12), 103-112. Xaxx, J. (2019). Factors Affecting the Market Demand & Supply for Mobile Phones. Retrieved from Techwalla: https://www.techwalla.com/articles/factors-affecting-the- marketdemand-supply-for-mobile-phones Running Head: COURSE REFLECTION 1 Course Reflection Jolanda Harrison Principles of Economics July 21, 2019 COURSE REFLECTION 2 Course reflection on market structure The market assessment is one of the strategies that help marketers to determine the best features of a product that may enable it to meet the market requirement (McDonalds & Wilson, 2016). There are different market structures, and having adequate knowledge about them can allow the manufacturers to if a product makes the right decision (Chaffey & Ellis-Chadwick, 2019). For iPhone 6 plus, an oligopoly market structure has favourable conditions to promote its success. In this market structure, the number of sellers who offer this product serves as one of the most important identifying features in the stated market structure. Different characteristics of the firm align with the features of the iPhone 6, plus that makes it successful in the market (Tidd & Bessant, 2018). Some of the features of this market that alights with the product include having a few dominant numbers of firms; there are limited types of products, high restrictions to entry to the market and supernormal long-run profit. Other features include having a non-price competition as well as the lowly allocative economic market. The company serves as the price marker, and possible regulations constrain it. For the iPhone 6 plus, different approaches help in determining the price and quantity of this product. Purchasing this product in place of the smaller iPhone 6 earns the additional company profit. The battery of iPhone 6 plus as well as its large screen brings about more cost of protecting it, which makes the company charge more for the product. The uniqueness of iPhone 6 plus makes it remain on top of this industry. However, other products such as Nokia, Huawei, Samsung and LG that offer quality and low price phones pose a challenge to the existence of iPhone 6 plus. Although these companies work in the production of related but somehow different products, the competitors have an impact on the market. In an COURSE REFLECTION oligopoly, competing companies depend on the decision by other companies to make a reaction. For instance, an increase in the cost of the iPhone 6 plus may make the other companies lower their process to win the market. The above-stated organization employs price discrimination when providing different products. For instance, the products that pose various but relatively related features may come at different prices in different locations. Additionally, the inclusion of additional functionality makes the firms to elevate the cost of the commodities. As stated above, different companies in this sector depend on the decision that the competing companies may make to determine the price of their products. This case serves as an example of the prisoner's dilemma where one makes a move in reaction to the competitors. In that case, one may argue in support of the alignment between the cellular phone market and the prisoner's dilemma theory. 3 COURSE REFLECTION References Chaffey, D., & Ellis-Chadwick, F. (2019). Digital marketing. Pearson UK. McDonald, M., & Wilson, H. (2016). Marketing Plans: How to prepare them how to profit from them. John Wiley & Sons. Tidd, J., & Bessant, J. R. (2018). Managing innovation: integrating technological, market and organizational change. John Wiley & Sons. 4 ...
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The purchase and sale of iPhone 6 Plus can be affected by several factors
The factors can be Fiscal:
Expansionary – Practices to Increase Money Supply in the economy
Contractionary – Decreasing Money supply in the economy (Garand, Ultrick, & Xu,
Or monetary policies
Expansionary – Actions by Central Banks to Jumpstart the economy
Contractionary –Actions by the Federal Reserve to lower the money supply to
reduce inflation (Afonso, Alves, & Balhote, 2019)
Several factors can affect the purchase and sale of the iPhone 6 Plus. The effects may
be positive or negative. Some of the factors include fiscal policy and monetary
policy. Both the monetary and fiscal policies may be in terms of Contractionary or
expansionary policies.

Effects of an Increase in Fiscal Policy on the purchase of iPhone 6
The increase refers to the general decrease in taxes and increased government
Disposable income then increases
Consumer disposable income - income amount that is available for an individual to
utilize in consumption purposes
The increase in fiscal policy can be explained as the instance where the government
decreases taxes and increases its expenditure (Garand, Ultrick, & Xu, 2013). When
the increase in fiscal policy occurs, consumer disposable income rises significantly.
Consumer disposable income can is the amount of income that is available for an
individual to utilize in consumption purposes.

Effects of an Increase in Fiscal Policy on the Purchase of iPhone 6
Plus (Cont'd)
The fiscal policy increase results in more amounts of money in circulation
Consumers will have more money to spend
More iPhone 6 Plus purchases occur
The demand for iPhone 6 Plus Increases

The increase in fiscal policy results in higher amounts of cash in circulation. This
increase means that consumers will have more money to spend (Friedman & Maier,
2012). With the boost in purchasing power, more iPhone 6 Plus phones will be
bought. Therefore, increasing the fiscal policy brings about an increase in disposable
income, which then boosts the capacity of consumers to buy more iPhone 6 Plus.

Effect of a Fiscal Policy Decrease in the purchase of iPhone 6 Plus
Increased government taxes and decreased government Expenditures...

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