The current state of the world economy is quite uncertain. Economic statistics that governments and other financial institutions use to project the economy imply that the world economy is shrinking. Since 2008, the state of the American economy has not been attractive. For instance, the United States economy has not registered any significant growth for the last three years. The 2011 second quarter results indicated that gross domestic product improved by 1%. At the same time, there was slight increase in business fixed investment sector. This was mainly attributed to good performance in software and equipment. In general, the economy seems to be headed for recovery (United Nations, 2010).
There were increased product and services exports as well as over growth in consumer spending. Overall federal government spending increased. This was as a result of increased government spending in military. The issue of oil and turmoil in oil producing countries especially in North Africa has contributed negatively to the economy. High energy costs mean that most sections of the economy will experience high production costs. Final products will be more costly to the consumer and thus leading to reduced consumer spending. A broader look at the state of the economy reveals that the economy is headed for a recovery. Most core sections of the economy have begun to register growth meaning that soon the economy will bounce back (United Nations, 2010).
Macroeconomic Snapshots and Forecast
Several surveys have been conducted to determine the financial situation of United States. Executives' sanguinity about the budget has continued to propagate over the past months, rendering to the outcomes of a McKinsey Quarterly survey in the area. This was carried out throughout the week that U.S. stock markets hit their topmost point so far in 2009. More businesses are tracking a variation of development inspirations than they did before and the amount projected augmented proceeds that year. Equally, a large number argued that their states' economies had enriched as September 2008; though only to 26%, from 20%. More executed 42% the account "battered but resilient" for the universal budget than any other. Yet their other reactions designated how they regarded the frugality as low enough to thwart an extensive economic recovery from arriving anytime rapidly (World Economical Organization, 2003).
Additionally, this survey requested managers’ opinions about their corporations’ reactions to the predicament and whether it had been effective and continue to the next year. The new activities the companies would assume in the contemporary commercial setting were also emphasized. Although 57% of the proprietors in a previous analysis alleged their administrations' global response to the catastrophe had simplified their firms; plaintiffs to this survey are more cynical about the precise movements their corporations have taken. Price reduction as well as overhaul is assumed to be the best and operational method that facilitates companies whenever it is in a predicament. Several companies have become proficient and a sturdy majority of the initiatives concentrate their operative charges since that time of diverse change. Many respondents argue that applying the method is a functional way that contributes to their firms in all catastrophes. Nevertheless, fewer corporations have gained aptitude that in some cases is never available.
Various companies' subordinate effective costs which come from staff discounts. However, a prominent 41% of defendants to this analysis claim that their businesses have not experienced any since that year. There are discrete variances on this argument amongst trivial, secluded enterprises as well as public corporations. Partial of the managers at the former explain that their corporations do not experience job cuts. In disparity, approximately three-quarters of directors at great, public firms have less...
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