U.S. EconomyDebby Cardillo

Economics for Decision Making

Debby Cardillo

MGM626-1101A-01-PH1-IP1

Colorado Technical University

January 7, 2011

Instructor: Nicholas Kusmich

Introduction

Consumer Products Inc. (CPI) a company located in Phoenix, AZ

established in 1951 have three primary products – Super

Clean, Shades of Youth and Super White. Ten years ago CPI went

public currently having a presence only in the United States with

revenues in excess of $200 million per

It is clear in order to remain competitive CPI must expand its base

eventually becoming international. There is clear opposition within

the organization the company has proven to be successful thus far

and should not change its operational base.

As a means of persuading the Board of Directors this is a critical move in

the future success of the organization the following presentation has

been created.

Gross Domestic Product

• Primary indicator measuring health of a country

• Denotes total dollar value of goods & services

• Compares to previous period of time

• Impacts everyone

United States

Gross Domestic Product

185.20

190.70

198.30

202.42

211.08

211.14

216.69

170

180

190

200

210

220

230

240

2004 2005 2006 2007 2008 2009 2010

Jan

Unemployment

• Unemployment continues to rise

• Unemployed over 27 weeks unchanged

• Accepting part-time positions

• Hours still being reduced

Unemployment

5.5

5.1

4.6 4.6

5.8

5.6

4.0

4.2

4.4

4.6

4.8

5.0

5.2

5.4

5.6

5.8

6.0

2004 2005 2006 2007 2008 2009

United States

Consumer Price Index

• Prices paid by consumers

• Examines a contrast between two goods

• Adjusted on a seasonal basis

Consumer Price Index

2.7

3.43.2

2.9

3.8

4.4

2.0

2.5

3.0

3.5

4.0

4.5

5.0

2004 2005 2006 2007 2008 2009

United States

Interest Rates

• Rates set by the Board and the FOMC

• Recommendations submitted by FRB

• Purchase Treasury bonds

• Anticipate short term rates may increase

Interest Rates

4.274.29

4.80

4.63

3.66

3.263.22

2

2.25

2.5

2.75

3

3.25

3.5

3.75

4

4.25

4.5

4.75

5

2004 2005 2006 2007 2008 2009 2010

Country Comparisons

Brazil

Germany

Japan

United States

Consumer Price Index

6.66.9

4.2

3.6

5.7

6.5

1.7 1.6 1.6

2.32.6

3.0

0.0-0.3

0.20.1

1.41.6

2.7

3.43.2

2.9

3.8

4.4

-1.0

0.0

1.0

2.0

3.0

4.0

5.0

6.0

7.0

8.0

2004 2005 2006 2007 2008 2009

Brazil

Germany

Japan

United States

Unemployment Compared

9.29.6

8.7

8.3

7.3 7.0

10.3

11.2

10.2

8.5

7.47.1

4.94.6

4.33.9 4.1 3.9

5.55.1

4.6 4.6

5.85.6

0.0

2.0

4.0

6.0

8.0

10.0

12.0

2004 2005 2006 2007 2008 2009

Brazil

Germany

Japan

United States

GDP Compared

1,494.69 1,584.60 1,701.16 1,849.08 1,984.45 1,871.85 2,466.39 2,586.53 2,710.22 2,853.16 2,909.69 2,744.59

3,708.49 3,872.84 4,080.36 4,297.52 4,358.33 4,111.04

11,812.30 12,579.70

13,336.20 14,010.80

14,369.40 13,554.08

-

2,000.00

4,000.00

6,000.00

8,000.00

10,000.00

12,000.00

14,000.00

16,000.00

2004 2005 2006 2007 2008 2009

Brazil

Germany

Japan

United States

Interest Rates Compared

0.00

5.00

10.00

15.00

20.00

25.00

30.00

35.00

40.00

45.00

2004 2005 2006 2007 2008 2009

43.4044.93

42.07

35.7537.11

38.04

4.043.35 3.76 4.22 3.98

0.00

2.902.94 2.59 2.64 2.76 2.68

4.27 4.294.80 4.63 3.66

3.26

Brazil

Germany

Japan

United States

Brazil’s Economy

• Minimally affected by financial crisis

• Introduced $100M U.S. into economy

• Provided additional tax cuts

• Encourages foreign investment

Germany’s Economy

• Fifth largest in terms of PPP

• Top exporter of machinery, vehicles

• Unemployment 20% in some areas

• Exports anticipated to grow by 3.5%

Japan’s Economy

• Industrialized, free-market economy

• Highly efficient, very competitive

• Few natural resources

U.S. Economy

• Economic recovery is continuing

• Initial stages of early recovery

• Impetus from fiscal policy waned

• Stabilized financial system

Conclusion

It may seem as though we are on the road to

financial recovery. The United States and

other countries have a long and arduous

road ahead. Stable financial

systems, accessible resource

utilization, and sound fiscal polices to bring

us to the Federal Reserve’s statutory

objectives are needed. It will take

time, patience and perseverance.

References

• Bureau of Economic Analysis (2010). Retrieved January 3, 2010 from

http://www.bea.gov/newsreleases/national/gdp/gdpnewsrelease.htm

• Economic Release. (2010). Bureau of Labor Statistics. Retrieved January

3, 2011from http://www.bls.gov/news.release/empsit.nr0.htm

• Economist Staff. (2006). Guide to Economic Indicators : Making Sense of

Economics

6Th Ed. London Profile Books Ltd.

• Federated Republic of Brazil. (2010). U.S. Department of State. Retrieved

January 8, 2011 from http://www.state.gov/r/pa/ei/bgn/35640.htm#econ

• Federal Republic of Germany. (2010). U.S. Department of State. Retrieved

January 8, 2011 from http://www.state.gov/r/pa/ei/bgn/3997.htm

• Japan. (2010). U.S. Department of State. Retrieved January 8, 2011 from

http://www.state.gov/r/pa/ei/bgn/4142.htm

References

• Reilly, D. and Sarte, P. (2010). Changes in Monetary Policy and the Variation

in Interest Rate Changes Across Credit Markets. Economic Quarterly.

Second Quarter 2010, Vol. 96 Issue 2, p201-229, 29p.

• Saphir, A. and Spicer, J. (2011). Chicago. Rueters. Retrieved January

7, 2011 from US Rate Futures-traders cut bets on Fed hike in 2011

• Staff Reporter. (2010). International Business Times. Full-Text: Ben

Bernanke's speech to Congressional committee on economic outlook.

Retrieved January 8, 2011 from

http://www.ibtimes.com/articles/98675/20110107/full-text-ben-bernanke-s-

speech-to-congressional-committee-on-economic-outlook.htm#

• United States Inflation Rate. (2010). Trading Economics. Retrieved January

4, 2011 from http://www.tradingeconomics.com/Economics/Inflation-

CPI.aspx?Symbol=USD

• World Bank Group. (2011). Retrieved January 7, 2011 from

http://data.worldbank.org/country/brazil