- 23/11/2012
- Posted by: essay
- Category: Free essays
The aim of this essay is to consider the behaviour of major economic variables constituting the GDP, study the recent context for movement, the impact of current tendencies on profits and profits share, and define the impact of the studied trends on Wal-Mart.
Part 1. List the leading and lagging SECTORS of the economy.
GDP components by expenditure are: consumption, investment, government spending, and the balance of exports and imports, i.e. trade balance. Consumption is an indicator which positively correlates with GDP, and coincides with GDP. The same can be stated about investment. Government spending is a leading sector, and trade balance tends to be a lagging one.
Part 2. Context for movement.
In 2010, the following tendencies were witnessed: in the first quarter of 2010, annual GRP rate increased by 3.7%, and in the second quarter it increased by 1.7% (US Bureau of Economic Analysis, 2010). The increase of GDP was mainly driven by increase in investment, private consumption and government spending. Import sector has accelerated significantly, as well as export. Private inventory investment has decelerated; however, it was compensated by increase of other types of investment (US Bureau of Economic Analysis, 2010).
Part 3. What does composition of outlook mean for profits and profit share in the economy? Risks?
In general, the major constituents of GDP have the tendency to increase, and though the growth of GDP is slower than it was projected, positive trends can be outlined. The growth of export and import as well as the increase of government spending indicate that profits can increase in 2010. Since the net exports change in the negative direction, risks can also increase, especially taking into account the part of economic forecasts prognosing a new turn of recession in the end of the year. However, overall estimate of economic development remains positive.
Part 4. Where does your company fit in the spectrum? Wal-Mart.
Concerning Wal-Mart position in current economic situation, it is possible to forecast the increase of profits and new space for development. This forecast in based on slight increase of export and on growing consumption. Moreover, since investment and government spending are also increasing, beside separate areas of these sectors, it is possible to predict future growth and increase of revenues at least for the end of 2010. Thus, for Wal-Mart it is time to introduce new products, promote stores and include other ways of attracting customers.
Reference
US Bureau of Economic Analysis. Available from
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