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

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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.

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