Description
The organization's strategic plan you wrote about in Week 2 calls for an aggressive growth plan, requiring investment in facilities and equipment, growth in productivity, and labor over the next five years. It is your responsibility to determine how the U.S economy during this five year period will impact such an aggressive growth plan. To do so, you should:
Develop a 2,100-word economic outlook forecast that includes the following:
- Analyze the history of changes in GDP, savings, investment, real interest rates, and unemployment and compare to forecast for the next five years.
- Discuss how government policies can influence economic growth.
- Analyze how monetary policy could influence the long-run behavior of price levels, inflation rates, costs, and other real or nominal variables.
- Describe how trade deficits or surpluses can influence the growth of productivity and GDP.
- Discuss the importance of the market for loanable funds and the market for foreign-currency exchange to the achievement of the strategic plan.
- Recommend, based on your above findings, whether the strategic plan can be achieved and provide support.
Use a minimum of 3 peer-reviewed sources from the University Library.
Format your paper consistent with APA guidelines.
Click the Assignment Files tab to submit your assignment.
Explanation & Answer
ECONOMICS
1
Economic Growth in the long run
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ECONOMICS
2
History of Gross Domestic Product
Gross domestic product in a layman’s language as the measure in monetary terms within a time
period of either quarterly, semi-annual or on yearly basis given the production of final goods and
services of an economy. The US economy underwent serious economic depression during and
shortly after the Second World War, this resulted into a declining gross domestic product. When
the economy picked, education became a priority and it was availed even to the low class within
the US economy. This moved them to the middle class by exposing them to higher employment
opportunities, this swelled the middle class. The results of labor output can be directly defined by
the increased training enhanced skills which implied increase in employment opportunities
which also mean increase in gross domestic product and productivity levels within the economy.
Generally, of late the US gross domestic product has been steadily improving or increasing and
to be more specific from 1970. This implies high productivity in the economy which will be very
instrumental and basic in the growth of most organizations within the economy and also outside
the economy (Gordon, 2012)
America has been has shown an increasing trend in its Gross Domestic Product statistics, this has
been indicated by various researchers such as the world bank who study very keenly the growth
and operations of many countries all over the world. Given the very many drivers or forces of
economy the American federal government has been able to convert it into profitable output that
has seen it always on an increasing basis, the major areas that have been in contribution to such
developments has been the manufacturing industry, the financial markets and agriculture. This
has been proved and can be on a continuing basis for the next five years with the existing
diversification and constant increase in creativity and innovation in all the three areas.
The main financial saving body in America has been the national and commercial banks that
have borne the responsibility of reserving the wealth of the country both for the federal and state
government and for the citizens as well. Another body that later came it the picture to fix the
flaws faced by the national banks and to further enhance savings and extend further to
investment was the Savings and Loans Association which became firmly grounded from the
early stages of the 20th century. Though the major players in saving pubic money were insurance
companies it has been evident that the historical records based on the nature of savings and
investment have been on a gradual trend and this is a clear indication that the economy of
ECONOMICS
3
America exhibits a platform fit for saving both for the federal and state government as well as for
the citizens for the forecasted four year period (Gordon, 2012)
Investment and savings are closely related terms though with different meaning they in a way
work hand in hand, that is, when there is enough money to be saved then many investments can
be done as well. Over the past decade America has shown that the control of its economy can
only be made possible by proper investment techniques that can be employed by either the
government or the citizens. With the invention of new technological facilities money transfers
has been made easy so that transactions that may enhance investment are made much easier. In
the next years to come investment is seen to be one major contributor that will have great impact
on the forecasted strategic plan (Stiglitz, 2015)
Another point of concern is the real interest rate...
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