Questions and Answers on Domestic and Foreign Investments - Paper Example

Question 1(17):

The federal program pays for domestic and also foreign investments. Under domestic programs, the federal government funds social welfare programs to take care of the citizens, research programs to advance the technological course, and also other government expenditures like covering expenses and parties for government officials. In foreign investments, the federal government funds programs in countries that are allies of the USA for the reason of improving the conditions in these areas or forwarding an agenda that will potentially benefit the nation. For instance, foreign aid goes to African countries to relieve hunger and promote vaccination programs while scholarships are offered to several individuals globally. However, not all these programs are necessary. For instance, it does not make sense to finance foreign countries on a deficit budget. Internally, prioritization of programs can show that others, such as research into food security, are more important than space exploration programs. Hence, the federal government should reduce its deficit spending.

Question 2 (19)

The first potential problem with the use of Tulips as a form of currency is that they would not achieve worldwide acceptance and appreciation as a legal tender. Additionally, their usage would not develop a unification of currency exchange systems like the established US dollar. Tulips cannot be used as a true unit measure due to their variations hence determination of the exchange rates would be a challenge. Finally, the limited availability of the tulips would further hinder their possible commercialization as the accepted currency.

Question 4 (21)

According to CNN money, the United States recorded the slowest growth ever in 3 years during Trumps first quarter in office. The economic progress as reported by financial organizations showed a growth rate of 0.7%, unlike the previous years. However, despite the economic hitches, the economy has substantially picked up, and sources of funding such as external borrowing have stabilized the declining economic state. http://money.cnn.com/2017/04/28/news/economy/us-GDP-q1-2017/index.htmlQuestion 7 (24)

I fall on the side of free trade proponents because free trade promotes the expansion of trade activities beyond the boundaries of a given country. Additionally, through such initiatives as the creation of free trade areas, citizens can acquire commodities at affordable prices while also cutting down on production costs since there is a high availability of quality products from trade partners. Economic tariffs limit the purchasing power of buyers in a closed economy due to the high prices imposed on goods and commodities. Moreover, the tariffs may result in low foreign investments due to the taxations incurred.

Question 9 (26)

My major economic dream is the actualization of economic independence. This is a state where there is an adequate balance between income and expenditure to the extent that little to no effort is needed to sustain my lifestyle. To attain this dream, I need to learn a lot about investment so that I can invest wisely and establish profitable sources of passive income to free up my time to think of alternative investments and pursue other distractions without fear of loss of income. To invest, I need to start saving so that I have enough capital after ten years of working. However, it also means that I need to learn how to come up with a budget and be disciplined enough to follow it before I start working and earning a lot of money.

Question 10 (27)

A market economy is like a shopping mall; there are always several places to get the same product and compare prices before buying.

A countrys economy is like a household; (finish the connection).

Question 11 (28)

I would give up cosmetics, private transportation, and gym subscription if the prices increased by 10% because cosmetics are not essential, while the other two have cheaper alternatives in the form of public transport and jogging around the house.

I would not give up social media if the platforms charged for their services since it has become an integral part of my social life that the price would match the increased demand.

I would increase the price of ice cream to cover the cost of milk. This is because the increased cost of milk will mirror in all milk products which will have to increase in cost until the price reaches a market equilibrium.

Question 12(9)

While I normally support spending, I recognize the arguments from the other side. The most compelling reason to support tax increase include the fact that a larger budgetary allocation means can empower the government to improve its social programs, the government can diversify the economy and achieve all set goals within a shorter period, and the cost of goods and services can be reduced.

Question 13 (30)

In a recession with inflation, as chair of the Fed, I would reduce the amount of money in circulation to curb the inflation and also bail out the major industries that offer employment and critical services to stimulate recovery from recession. This is because inflation and recession are all caused by panics about the state of the economy, and by reducing the circulation of money, its value can be restored. However, this only achieves its purpose if the citizens can still get a way of earning, hence the measure to support industries that give employment.