Free Finance Essay Samples

[…] In the meantime, the macro economy of China continues to be extremely strong. According to China’s National Bureau of Statistics, economy of China rose by 9.5 percent in 2004 (“Doing Business In China: A Country Commercial Guide for U.S. Companies”). Retail sales increased to 14 percent in 2004 and were expected to rose in 2005 in result of high consumer credit. In turn, foreign currency reserves more than USD 600 billion by year- end, up to 52 percent from year-end 2003. At the end of year inflation also declined up to a 3.9 percent rate. In 2004, the government fiscal deficit has fallen. In total trade there was observed a small surplus. Fixed asset investment increased quickly up to 25 percent to achieve USD 846 billion that made a little bit more than 50 percent of GDP. China involved USD 60.6 billion in foreign direct investing – mainly in real estate or manufacturing. According to this figure, China took second place after the United States. […]

[…] The next important negative effect of the first oil shock was the essential rise in the labor share of national income in all G7 countries excluding USA. Wages reacted dramatically to the oil price rise and companies did not want or were unable to increase wages and non-wage labor costs. As a result, profitability fell and financial complications in the corporate sector became higer. It led to declines in investment and stockbuilding that were the main reasons of the fall in GDP in 1975. By the way, Bruno and Sachs stated that the contribution of labour costs to the general price level was one of the most important reasons for deepening the recession in the 1972-1973 shock (154-176). […]

[…] Open Market Operations is the primary tool of monetary policy (“Monetary Policymaking”). The main functions of open market operations are the sale and purchase of U.S. Treasury and federal securities. The Federal Open Market Committee (FOMC) makes decisions for the short-term goals of open market operations. These goals are often to reach a definite amount of currency reserves or a definite interest rate. The special goals of the FOMC have changed over the years. During the 1980s and 1990s, FOMC paid its attention to achievement of a specified level for the federal funds rate. In 2000, price stability and sustainable economic growth became the long-term objectives for the FOMC. Now it is necessary to examine open market operations and its strengths and weaknesses in the world of economics. Besides, it is worth to outline the reasons for the Fed historical preference for open market operations as its main tool of operating strategy for implementing monetary policy. […]

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