National and Global Finance Essay

1. Choose an example of a type of new company you could start, and then use this company idea to answer the questions below. You might choose a pet store, a restaurant, a tutoring business, or something else. This can be the same type of company you chose in assignment 8 or 9, or it can be different. a. Describe the type of business you chose. (1-2 sentences.) -A grocery store. b. Describe at least two ways in which the local, state, or federal government would have an impact on your business. (2-4 sentences.) -The state government would impact my business’s profit because we have to pay taxes for what we sell. -The federal government would impact my business because I would need to make sure that my store is up to safety standards by the CPSC. 2. Describe at least one advantage and one disadvantage of price ceilings and price floors. Do you think price ceilings and floors are more helpful or more harmful to consumers and the economy? Explain. (2-4 sentences. ) -One advantage of the price ceiling is that people won’t be paying outrageous prices for things they need, one disadvantage is that they could be set too low for the company to make enough money. I think that the floors and ceilings help the economy and are more helpful for the consumers, if there were none, then a company could charge 10 dollars for a gallon of gasoline, which would cause people to not want to buy gas, even though some people are paying that amount, a lot less people would be buying gas so the company, economy, and consumers would all be hurt. 3. Describe at least two negative outcomes of having too little money and credit in the economy. (2-4 sentences. ) -It makes it so that banks can’t lend out as much money, if there is no money to be lent out, entrepreneurs can’t make investments and people can’t buy things like houses as easily, this causes a cycle where  the economy grows slowly 4. Describe at least two negative outcomes of having too much money and credit in the economy. (2-4 sentences. ) – Inflation happens, that’s when the value of the dollar raises, not everyone gets higher wages when that happens, but things end up getting more expensive, causing consumers not to buy stuff. 5. Which Fed tool do you think is most important, and why? (2-4 sentences.) -Probably the Reserve Requirements, if they didn’t have that the bank would be able to screw the government and anyone who uses the bank. 6. Choose one of the following government agencies or laws: FTC, EPA, FDA, CPSC, OSHA, FLSA, EEOC, ADA, SEC, or Affirmative Action. Search online to learn more about the agency or law, and then describe three specific things the law or agency accomplishes. Make sure the information comes from a trustworthy website. Include a link to the website in your answer. (3-6 sentences.) -The EPA is all about helping and protecting nature and our selves, they have passed many laws to keep us safe. Some of these laws include: C.A.A., or the Clean Air Act. This is a Federal law they passed to make sure we’re not releasing too much emission into the air, or releasing really bad things. Another law they have passed is the C.W.A., or Clean Water Act, this is also a Federal law, it protects our water systems from getting infested with pollution and toxic chemicals, without this we could lose our fishing locations and fresh drinking water. The last law they have passed that I am going to share is the E.S.A., or better known as the Endangered Species Act, this is a lot like the other two acts, but specifically targets endangered species from going extinct. Whether they’re plants, animals, or aquatic life, this law protects species in low numbers from being hunted, destroyed, or sought after. 7. Describe  at least two products that are commonly imported into the United States. (1-2 sentences.) -Oil from the Middle East is often imported to the U.S., another product that is commonly imported from other counties is a lot of different foreign cars and car parts from companies like Toyota. 8. Describe at least two products that are commonly exported from the United States to other countries. (1-2 sentences. ) -Aircrafts, a lot of military and commercial planes & helicopters are exported from the U.S. to many different countries. 9. Why does the U.S. government encourage U.S. companies to sell their products in other countries? Explain how this helps the U.S. (2-4 sentences.) -It does so because the more U.S. products going to other continents and nations the more tax money comes in for the U.S.; the more tax money, the better our economy does. 10. Find the value of one U.S. dollar in a foreign currency. You might choose the Euro, the Japanese Yen, the Canadian dollar, or another currency. List the type of currency and the current value of the U.S. dollar in that country. – $1.00 USD has the buying power of â‚ ¹59.28 INR (Indian Rupee.) 11. Describe at least three exchange rate factors that are likely to attract foreign investors to a country’s currency. Explain why these factors are attractive for foreign investors. (3-6 sentences.) -Inflation, they want the inflation to be low so that the can sell their products for higher prices to the U.S.A. Another thing investors don’t want is an unstable country, whether that’s political or economic troubles. The last thing investors want is a high interest rate, if the interest rate in China is 15% and in the U.S. it’s 9%, then that company will probably want to invest with a company in China because they will receive more money in return for their loan.