ECON545: Project 2�Macroeconomic Analysi

Preview (4 of 11 Pages)

100%

Purchase to unlock

ECON545: Project 2�Macroeconomic Analysi - Page 1 preview image

Loading page ...

1ECON545:Project 2—MacroeconomicAnalysisEach of the scenarios has a list of Macroeconomic areas you are to address, with sources, inyour answer.Briefly you are to research and show how these apply toyour scenario: GDPgrowth rate (20 points),the business cycle(30 points), fiscal policy and level ofunemployment(50 points), monetary policy and interest rates (50 points), international trade(40 points),and demographics(20 points).Cousin Edgar is always thinking of the next business idea. This time, he plans to invest in buying four gasstations. He reckons American consumers have come to accept the high gasoline prices, andestimates worldprices for gasoline to increase even further with high demand from India and China. Besides, Cousin Edgarthinks he will make a good profit on the sale of convenience items at each station. But before buying the gasstations, he decides to ask for your advice because you are taking this course in business economics.Answer–The new business idea of Cousin Edgar is very innovative but being anintelligent businessmanEdgar should look for all the broad macroeconomic conditions inthe U.S economy where he is planning to buyfour gas stations and to set up the stores ofconvenience items at each station.Being a student of economics, I would like to give himfew ideas and some broad perspectives which Edgar shouldbetaken care of beforeinvesting sucha huge amount at one instance.We will start from the overview of the U.S economy,the current GDP volume and thecontribution by each sector. The inflation rate and theunemployment ratewould also havegreat impact on the growth and the operations ofthe business in U.S.With crude oil pricesover $120 per barrel, it is no wonder that gas prices are so high.Oil prices affect not onlygasoline, but everything that revolves around gasoline as well.Groceries are moreexpensive, anything that is delivered by a semi-truck is higherthan andeven something assimple as ordering a pizza iscosting a little more these days. Therefore, the price elasticityof other goods is higher than the price elasticity of demand for Gasoline. Hence, Edgar

Preview Mode

This document has 11 pages. Sign in to access the full document!

Report

Study Now!

Document Details

Related Documents

ECON545: Project 2�Macroeconomic Analysis

Analysis of McDonald

The Effect of Exercise on Clothespin Squeezing

Analyzing Coca-Cola's Demand, Supply and Market St

United States Fiscal Policy

Assignment 2: Market Forms

Economic Policy Recommendation

Emerging Economies and Globalization

Emerging Economies and Globalization

Principles of Managerial Economics

Company

Explore

Study Tools