At the end of June 2003, the Federal Reserve cut interest by a Essay

At the end of June 2003, the Federal Reserve cut interest by a quarter-point to 1.0 per cent, their lowest level in 45 years. Explain the three main channels by - Essay Example f the aggregate demand in the economy, - consumption, investment and government spending, these appear to be the three main channels, through which interest rate influences aggregate demand. The decrease of the interest rates accounting other factors being stable, leads to the increase of the new equipment among firms, which they plan to purchase, it also increases the number of new houses, and the goods of long-term use. Changes in the price levels through the impact on the amount of money in use also influence interest rates. Changes in the interest rates, caused by the changes in the price levels, changes the aggregate demand on goods and services; however, in graphic form this does not make the aggregate demand curve shift; it only reflects the movement along the already existing line. (Handa: 2000) However, interest rates also create another impact. No matter what may be the reason of the interest rates change, their level impacts aggregate demand as a whole. Separately from the price level change, the aggregate demand curve shifts with the changes in interest rates. For example, if the government comes down to the higher expenditures and loans to cover the deficit, with the other conditions stable it leads to the increase of interest rates and negatively influences the plans of expenditures for the firms and individuals. If the supply of the finances for loans increases abroad, the interest rates stay stable, keeping aggregate demand from decrease. (Handa: 2000) Consumption is the most considerable part of the aggregate demand, and it is wise to start the discussion of the interest rates decrease with the impact it creates on consumption. Individuals acquire their incomes in the form of salary, and the capital profits. A portion of the income is spent for paying taxes to governmental structures. On the other hand, government also provides individuals with subsidies (social insurance, unemployment payments, etc.). The decision about consumption lies in the

Adebat about can any one be an entrepreneur including with the Essay

Adebat about can any one be an entrepreneur including with the strength about it and proving them also weaknesses and prove it - Essay Example 3) The acceptance of failure or risk. From the economist’s point of view, an entrepreneur is an individual who brings together labor, resources, materials and other valuable assets into a combined form that brings out a value that is greater than before. An entrepreneur can also be defined as person who introduces innovations, changes, and some form of new order. The psychologist says that such individuals are driven certain internal forces of the urge to attain or obtain something, to accomplish, to experiment, or just to escape the authority of other individuals. To a business person, an entrepreneur will be treated as a threat or an aggressive competitor. Again to the same business person, an entrepreneur can be a benefiting factor as one can become a business ally, customer, supplier or creator of wealth to others. An entrepreneur can also be seen as a person who is finding better ways to reduce waste, utilize resources or produce jobs to those who are jobless. Entrepreneurship is also seen as a dynamical process of producing an increment of wealth (Casson, 2008). This wealth is frequently created by the people who take an assumption to some significant risks in terms of time, equity. However, these definitions will tend to view the entrepreneur from different perspectives, but they have similar notions about organizing, newness, wealth, creating, novelty and the risk taking. Each definition is sometimes restrictive because entrepreneurs are found in all professions such as education, law, research, engineering, social work, medicine, distribution and government. Entrepreneurship is a means of creating new things with some added value by devoting the required effort and resources. At the same time assuming psychic, social risks, financial and acceptance of the results of the monetary rewards and the personal independence and satisfaction. The definition of the entrepreneur stresses four