• Join over 1.2 million students every month
  • Accelerate your learning by 29%
  • Unlimited access from just £6.99 per month

The question is will the U.S. economy emerge from its recent funk- or spiral into a full-blown recession?

Extracts from this document...

Introduction

THE END IS CLOSER THAN WE CAN IMAGINE ! WRITTEN BY: JACOB STEVE ANTHONY ID: 00-01633-2 AMA INTERNATIONAL UNIVERSITY BANGLADESH The U.S. and Japan, countries of Strong economic background and measurable wealth are now at a stage of serious economic turmoil. Americans are living through a high level of anxiety. The question is will the U.S. economy emerge from its recent funk- or spiral into a full-blown recession? But there is light at the end of the tunnel; a lot of stocks are doing well. Despite awful headlines and a palpable fear, the average diversified stock fund has fallen a manageable 13% in the past year. Lots of people are doing well too. U.S. Job creation is growing at a faster pace this year than in the final months of 2000. Inflation is tame, and interest rates are falling fast, lowering the cost of mortgages and car loans. It looks like as if the economy in the U.S. is still in a very strong position, or is it? The signs of economic slowdown started to show up almost suddenly in the last quarter of the last year. In the third quarter of that year GDP registered a fall to 2.2 per cent and in the forth quarter it slumped to 1.1 per cent. During President Bill Clinton's era USA saw sustained economic growth almost on all fronts. Even in the first six months of last year (i.e. ...read more.

Middle

The Federal Reserve cut interest rates aggressively for the third time this year in a bid to keep the United States from slipping into recession. The "Feds" cut interest rates a total of 1 % bringing it down form 6.00 to 5.00, The Federal Reserve expects this cut in interest rate will boost the economy of the US and increase investment, due to this cut ion the interest rate the government said 141.9 million people were employed in March compared with 135.8 million in February, which shows a sign of slow economic reform, the strategy implemented by the US government is working and the US is slowly but steadily pulling out of this recession, but if not taken care of appropriately there may be a huge problem in the US economy which will affect the economy of the world tremendously. On the other side of the pacific another story has to be said. Japan has been suffering form a long economic stagnation for more than a decade, the recent slowdown of the US has effected the Japanese economy enormously, Japan is the second largest economy in the world and is totally export dependent on the U.S. As the demand for Japanese cars and electronics rock bottomed the Japanese have entered into an early phase of recession. Japan's problems make prospects of the U.S. economy look downright sunny. The main cause of the Japanese economic slowdown is this reduction in trade surplus, which is due to a fall of exports of Japanese commodities in the US markets. ...read more.

Conclusion

the coldness of the economic slowdown is felt very strongly, mainly by Japan, who is the largest exporter of electronic and automobiles to the United States. As soon as the slump hit America, Japans trade surplus plummeted to a rock bottom of a mere 64.8 trillion dollars in 2001 while it was at a staggering 800.9 trillion dollars at the beginning of the last decade. The Japanese economy slowly moved towards recession independent of the U.S. but the recent U.S. economic slowdowns have boosted the economy into ruins. Not only for Japan all major export countries to the US will be seriously affected due to reduced demand within the US economy. The scenario of 1932 is even closer than we think. The big question is whether this will indeed change is the months ahead, especially if the carnage in Wall Street continues. We might better cast our horizons lower - and look towards what the Joneses are doing. One afternoon last week Lindsey McKenzie, a nursing assistant with tree kids, tried on three pairs of sandals at George's Shoes in Boston. She held on to a black and a white pair wistfully. You could almost see her Neurons wrestling with the eternal question. "To buy or not to buy?" "I don't have the money this week," She finally told the clerk. She exited the store, her belt a notch tighter, figuratively. The fate of the worlds economy now rests on a billion such small decisions, played out in a store aisles and around kitchen tables across America. The end is closer than we can imagine! ...read more.

The above preview is unformatted text

This student written piece of work is one of many that can be found in our GCSE Economy & Economics section.

Found what you're looking for?

  • Start learning 29% faster today
  • 150,000+ documents available
  • Just £6.99 a month

Not the one? Search for your essay title...
  • Join over 1.2 million students every month
  • Accelerate your learning by 29%
  • Unlimited access from just £6.99 per month

See related essaysSee related essays

Related GCSE Economy & Economics essays

  1. Chinese economy sets for soft landing in 2005.

    "If inflation does build up and the inflation rate goes higher than 5 per cent, the authorities will have to slam on the brakes harder, of course. When they do that, soft landing becomes a bit rougher. It's very hard to quantify, but that's our basic outlook," said Thomas J.

  2. Free essay

    different sectors of economy

    Businesses I have chosen for primary sector are - Seldom Seen Farm, UK Coal and Shell. Businesses I have chosen for secondary sector are - Cofresh, Volkswagen Group and . Businesses I have chosen for tertiary sector are - Hayles Farrar & Partners, NHS and Barclays.

  1. Should the government increase spending to get out of a recession?

    Then there are the ethical issues attached with globalised business; the rich gain at the expense of the poor20. Localisation provides domestic jobs, consumer choice and directly contributes to real GDP, which is only advantageous. Small businesses do not tend to have the large expenditure needed to operate globally, and

  2. As time progressed, the United State's dependency for foreign oil has tremendously grown and ...

    Worldwide supply of crude is down and demand is up. Hurricane Katrina and Rita made the issue even worse, damaging many refineries. As oil peaking approaches, the price of oil will continue to show volatility as traders, speculators, and other market participants react to supply and demand events.

  1. Overview Of Japan's Economy

    Deflation Deflation is a sustained fall in prices, whereas inflation is a sustained rise in prices. Japan has found it very difficult to stop deflation and the country has been faced with it for the past six years. In order to combat this, the Bank of Japan has set interest rates to practically zero (0.1%).

  2. China or India? Many companies ask themselves this question. Due to saturated markets, increasing ...

    It serves as a worldwide supply base where goods are produced and exported. It has a good educated workforce that is able to conduct these tasks. In these areas it is the world leader and has a lead over competitors.

  1. Outsourcing. From the us point of view, how large is the outsourcing phenomenon and ...

    In Hyderabad, "Microsoft currently employs 600 software developers and another 500 at a second facility"4(Mike Bucken, computer world). To what extent is 'INSOURCING" being done in the USA rather than in their previous location occurring? Insourcing is what some economist calls the "boomerang effect"(Kharif Olga)5.

  2. Has Japan Paid The Price For Growing Too Fast

    Demobilized military personnel and returning civilians joined the labour force, providing a large supply of workers for economic reconstruction in the early post-war period. Various social reforms were carried out after the war; these helped shape a basic framework following economic development.

  • Over 160,000 pieces
    of student written work
  • Annotated by
    experienced teachers
  • Ideas and feedback to
    improve your own work