Macroeconomic Analysis project 2.doc - Running head MACROECONOMIC ANALYSIS Topic Macroeconomic Analysis Course ECON 545 Tutor Prof Alisher Akhmedjonov

Macroeconomic Analysis project 2.doc - Running head...

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Running head: MACROECONOMIC ANALYSIS 1 Topic: Macroeconomic Analysis Course: ECON 545 Tutor: Prof. Alisher Akhmedjonov Course Project Part 2: Situation D Student: Sahr Musa Yamba Jul 22 2017
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MACROECONOMIC ANALYSIS 2 Macroeconomic Analysis Introduction Uncle Dan has spent three decades in the commodity market. Now, after a very long stint, he would like to call it a day and try his skills in the real estate market. He would also like to have a better reallocation of his land resources to build some homes and shops so that he makes more money. His assumption is that the real estate market fetches better returns as compared to the commodity market. There are multiple macroeconomic factors that should be kept in mind before making a decision in this respect. Some of these factors are the economic growth rate (GDP) rate, interest rates, employment in the country, business cycle, fiscal policy, state of international trade, and local demographics. Gross Domestic Product (GDP) The GDP growth rate suggests the average growth rate of the economy. Quarterly GDP indicates how the economy has grown in the time period. The four critical component of GDP are personal consumption, investments by business, government spending, and international trade. GDP growth suggest how the economy is growing or shrinking. When the economy grows, GDP data is positive. Therefore, people earn more, there are more jobs, and the government earns more in taxes. On the other hand, negative GDP growth means that everyone cuts down their spending and there are lesser business opportunities. Businesses postpone their investment decisions. The trickle-down effect of both, positive as well as movement in GDP has a trickle- down effect on every other aspect of the society. Uncle Den needs to be more attentive about this aspect while making a decision about his investment.
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MACROECONOMIC ANALYSIS 3 The United States of America is world’s largest economy. All the sectors like insurance, finance, real estate, rental, health care, social assistance, educational services, professional, leasing, business and accounts make about 40% of country’s GDP (United States GDP). Moreover, U.S. dollar is the primary currency is international and reserve trade. In Jan 2017, country’s economy grew by 2% (Bea.gov, 2017) Employement and Business Cycles Business cycle indicates how businesses go up and down in different phases of economy. Business growth should be with some balance. Good economy grows at an appropriate pace.
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