ECON 301 Week 5 Discussions Group 2 US Trade Policy Summary For our group project we have decided to research, analyze, and formulate an argument on the World Trade Organization (WTO) in regards to the US Trade Policy. In our paper we have discussed what WTO stands for and the goal of this organization. We have also addressed the latest form of trade negotiations among the WTO membership – Doha Development Round and the controversial topics of protectionism and free trade. Among the research we have performed, we as a group have come to a conclusion that we support this organization. Although there are incomplete developments that still need to be addressed, we continue to support this organization because of the fact that numerous nations come together in order to reform these conflicts. Questions: 1. What makes free trade a better option than protectionism for the economic situation in the US? 2. What consequences would the WTO face if they acted unethically given their power? Group 3 US Fiscal Policy Fiscal Policy refers to the practice of monitoring spending levels and tax rates to try and influence our economy. Before the Great Depression, which started in the late twenties, our government had a hands off approach to the economy or a laissez-faire approach. After the Second World War it was deemed necessary for the government to become involved in our economy. (Heakal, Reem) They decided this would be necessary in order to attempt to influence unemployment, the business cycle and inflation. Of course there are many different ideas on the best approach and way to accomplish this. The government takes initiative in trying to regulate unemployment, unemployment benefits, and taxation. They do this through the use of what is known as automatic stabilizers, which are programs and policies meant to balance fluctuations in the economy. During a recession, automatic stabilizers are expanded, and during an economic boom, the automatic stabilizers are reduced. An example of this would be unemployment benefits (David Weil). When there is a recession and unemployment is high, the government spends more money on unemployment benefits, whereas when the unemployment is low, the government spends less money on unemployment benefits. According to William J. Carrington, an analyst of the Congressional budget office, some of the fiscal policies used to reduce unemployment include household assistance (reducing employees’ taxes, increased unemployment insurance expenditures, and more refundable tax), business assistance, and financial aid to the states. Carrington also shows that to reduce unemployment, unemployment benefit policies must be modified such as an extension to the duration of benefits, reemployment bonuses, and offering wage insurance. Fiscal Policy can also be used to influence new ideas like those in alternative energies. The United States government often tries to finds ways to stimulate the economy while looking towards its future. T ...

1. ECON 301 Week 5 Discussions
Group 2 US Trade Policy
Summary
For our group project we have decided to research, analyze, and
formulate an argument on the World Trade Organization (WTO)
in regards to the US Trade Policy. In our paper we have
discussed what WTO stands for and the goal of this
organization. We have also addressed the latest form of trade
negotiations among the WTO membership – Doha Development
Round and the controversial topics of protectionism and free
trade. Among the research we have performed, we as a group
have come to a conclusion that we support this organization.
Although there are incomplete developments that still need to
be addressed, we continue to support this organization because
of the fact that numerous nations come together in order to
reform these conflicts.
Questions:
1. What makes free trade a better option than protectionism for
the economic situation in the US?
2. What consequences would the WTO face if they acted
unethically given their power?
Group 3 US Fiscal Policy
Fiscal Policy refers to the practice of monitoring spending
levels and tax rates to try and influence our economy. Before
the Great Depression, which started in the late twenties, our
government had a hands off approach to the economy or a
laissez-faire approach. After the Second World War it was
deemed necessary for the government to become involved in our
economy. (Heakal, Reem) They decided this would be necessary
in order to attempt to influence unemployment, the business
cycle and inflation. Of course there are many different ideas on
the best approach and way to accomplish this.

2. The government takes initiative in trying to regulate
unemployment, unemployment benefits, and taxation. They do
this through the use of what is known as automatic stabilizers,
which are programs and policies meant to balance fluctuations
in the economy. During a recession, automatic stabilizers are
expanded, and during an economic boom, the automatic
stabilizers are reduced. An example of this would be
unemployment benefits (David Weil). When there is a recession
and unemployment is high, the government spends more money
on unemployment benefits, whereas when the unemployment is
low, the government spends less money on unemployment
benefits. According to William J. Carrington, an analyst of the
Congressional budget office, some of the fiscal policies used to
reduce unemployment include household assistance (reducing
employees’ taxes, increased unemployment insurance
expenditures, and more refundable tax), business assistance, and
financial aid to the states. Carrington also shows that to reduce
unemployment, unemployment benefit policies must be
modified such as an extension to the duration of benefits,
reemployment bonuses, and offering wage insurance. Fiscal
Policy can also be used to influence new ideas like those in
alternative energies.
The United States government often tries to finds ways to
stimulate the economy while looking towards its future. The
government was given powers to accomplish this by our
founding fathers when they wrote our Constitution. The
Constitution of the United States speaks to this in the first
article, “To promote the Progress of Science and useful Arts, by
securing for limited Times to Authors and Inventors the
exclusive Right to their respective Writings and Discoveries.”
(Article I, Section 8, Clause 8). With this in mind the United
States Government has distributed grants and loans to a myriad
of industries to improve technologies. We see this today in the
Department of Energy (DOE) and how they are focusing on
Solar, Wind, and other sources of natural alternative energies to
power the United States into the future. From January 2011 to

3. September 2011 the DOE was responsible for 45 conditional or
finalized loans or grants to the alternative energy industries
(DOE, 2011). During this time companies were able to use the
Energy Policy Act of 2005 section 1703 and 1705 to apply for
loans and expand business. This pursuit led to the expansion of
business and added additional employees. While many people
have heard of Solyndra and its 535 million dollar loan and it’s
later filling of bankruptcy not many have heard of Record Hill
Wind LLC? This company focuses on wind power and they have
actually been able through investment lower property taxes by
59 percent in their local community. Some companies will make
it and some will fail the monies pumped into the local
economies through the building of solar farms and wind farms
will push for invention, infrastructure improvements which will
create jobs and hopefully lead to a more robust stronger
economy. Which leads to the mention of Quantitative easing
within the Fiscal Policy, which deals a lot with the build-up of
the economy.
Quantitative easing is an unconventional monetary policy
where a central bank purchases government securities or other
securities from the market for them to be able to lower interest
rates and increase the supply of money. Overflowing financial
institutions with capital aiming to promote increased lending
and liquidity increases the supply of money. When short-term
interest rates are at or approaching zero, and does not involve
the printing of new banknotes is when Quantitative easing is
considered (Hussain, 2014). Normally in the Fiscal Policy they
agree to buy only short-term debt, but in some recent years they
have been buying larger sums of money, which leaves a long-
term debt (Adam, 2014). Things like this are outside of the
policy agreement and leave the Federal Reserve (FR) exposed
to, but indirectly the taxpayer to some risk. With this going on
it blurs the line between fiscal and monetary policy and the FR
is not taking any serious default risk. The problem then may
come when the economy recovers, and inflation begins to
become a problem rather than a wished for outcome (Hussain,

4. 2014). With that being said there will come a time when the FR
wants to withdraw that extra $1 trillion of money it created,
which is why they should stick to only using short-term debt as
stated in the Fiscal Policy.
Governments around the world try and find ways through
fiscal and monetary policy to limit and control the recession
portion of natural business cycle. The overall idea of these
governments is to try and increase aggregate demand or
consumer spending, investment, exports. There is no guarantee
that any of theses methods will work. Each business cycle is
different and the cause of a recession has a lot to do with what
the plan used to recover from it. The important part is to
continue to study these cycles so we can become better prepared
to limit the length and damaged caused by a recession cycle.
Question 1
Do you believe it is wise for the government to offer money and
incentives to companies using the taxpayer’s dollars and not
closely monitor them and their books?
Question 2
Should unemployment benefits be closely monitored to ensure
people are not just receiving the checks without actively
seeking employment?
Question 3
Do you believe the government should be more or less involved
in our economy?
ECON 301 Week 5 Topic 1
Open the link below:
http://www.imf.org/external/pubs/ft/exrp/macropol/eng/
[The same link is available in Course Schedule].
1) Sumamrize the issues discussed Section 4 of the paper
[around 300 words].
2) Critique Section 4 [in 150 words].
ECON 301 Week 5 Topic 2

5. Open the link below:
http://www.usip.org/guiding-principles-stabilization-and-
reconstruction-the-web-version/9-sustainable-
economy/macroeconomy
[The same link is in the Course Schedule].
1) Summarize the article (in about 400 words)
20 Critique the article (in about 200 words)
FINC 340 Week 5
Discussion # 5 (based on concepts covered in assigned reading
of Week 5)
Bonds are an important type of investment due to the attractive
investment opportunities they offer to investors and the size of
the bond market. The assigned chapters examine various
features of bonds and bond ratings and bond valuation. These
chapters provide very valuable information to one of the
important securities called ‘Bonds’. In the light of above
information, let’s discuss:
1- In your opinion, why do we need to invest in bonds? What
are the many types of bonds currently available and the wide
array of investment objectives they can fulfill? What are the
types of risks to which bond investors are exposed? Give
examples to substantiate your answer.
2- Explain the important role that interest rates play in the
bond investment process and the basic determinants of market
rates. Again, examples would help to understand the concepts.
What are the fundamentals of bond valuation, including basic
measures of yield and return? Are you convinced with the
effectiveness of these measures? Why?
3- The readings for week 5 discuss the relationship between risk
and return, certainly a concept that is important to analysts and
investors: How strong and how stable is the relationship
between risk and return in financial markets? What are the
implications for portfolio management? Discuss some personal
or business experience that you have had with the relationship
between risk and return and explain how it relates to the

6. textbook discussion?
4- Explain what do you understand by the term ‘short selling’.
Provide some examples of how an investor can use this
strategy? Discuss how you are using short selling in the
management of your portfolio management project?
5- Most Important Things Learned - What are the most
important things you learned from the study of this week's
readings and assignments?