Brent Katz

AP Economics

Employment is the condition of having paid work or a persons trade or profession. Employment is seen all of the time in the modern United States economy. An example of employment in todays world is shown in the NY times article Wary of Europe and Facing Pressure, Lloyds, HSBC and Goldman Will Shed Jobs by Julia Werdinger. This article is about three large banking firms in England and the United States making cuts on their employees because they are facing the pressures of todays economy and need to save money. The Lloyds Banking group is planning to cut 15,000 employees by the end of the year 2014. This lender that is 41 percent owned by the British government is trying to save 1.5 or 2.4 billion dollars each year up to 2014. This is a lot of money saved by the company and the government by the small cut of workers in their eyes. The reason they are saving this much money from the job cuts is that they are taking the workers out of more than 15 of the previous 30 countries that they were in beforehand, lowering computer system costs and making middle management more efficient. HSBC, the largest British bank is going to cut 700 employees. The HSBC didnt explain why they were making the cuts. They only showed where the cuts were being made. The employees being fired at HSBC will mainly be from banking services to individuals. 460 jobs will be cut from the financial advice team and 240 will be from human resources and financing. Goldman Sachs has economic reasons for cutting 230 employees. This is only 1 percent of their 34,500 employees around the world. The firm says it plans to cut jobs and hopes to lower its noncompensation expenses to one billion dollars over the next year. Although these job cuts may be frowned upon by many people the economy is going through tough times. In order for the banks to do well, they must make job cuts.

Brent Katz

AP Economics

Output is the amount of energy, work, goods, or services produced by a machine, factory, company, or an individual in a period. Today in the Unites States, output is seen every day in the factories. A specific example of output is in the car factories. The New York Times article With Sonic, G.M. Stands Automaking on Its Head by Bill Vlasic displays a current example of output in the United States through the production of a new car. The only subcompact car on American Soil is being built in Detroit, Michigan. In order to do that, they had to squeeze the production line into half of the space that is usually needed in a regular plant. During production welding robots are placed in clusters instead of along the lines like they usually are. This is in order to cut production costs. They also lowered the wages of workers to half that the people in the union would make. The push to make the car cheaper has even gone down to the rust coating, which is a one hundredth as thick as on normal cars. One of the oldest rumors in the car manufacturing business is that subcompact cars are too cheap to be made in the US because there will be no profit. The Chevrolet Sonic, the new car being produced by General Motors, is priced at $14,000. The reason they can do this is because they reduced the pay of the workers and used a smaller factory to produce the cars. The Sonic weighs up to 500 pounds less than the other subcompact cars around and with that, its 1.4 liter engine almost gives the best gas mileage in the business. Jim Federico, head of G.M.s global small cars and electric vehicles said, It will be north of 40 miles per gallon. The plant employs 1800 employees. To cover for the small profit that will be made on the Sonic, the plant will also produce the upscale Buick Verano on the same production line. This plant in Detroit will produce 160,000 cars this year. The usual 5 say shifts will be turned into 4 ten hour days in order to save money. The more money saved on the Sonic will greaten the profit on the sale of the car.

Brent Katz

AP Economics

Income is Money received, esp. on a regular basis, for work or through investments. Income is seen in every household in the United States. It is the way a family is able to have a house, buy clothes, and is able to eat food. In business terms, it is just a company making money or pulling in a profit. The New York Times article Profit Up 13%, UnitedHealth Raises Outlook shows how a company gains income and makes a profit in the modern United States Economy. The UnitedHealth group is one of the largest insurance companies in the United States. When they reported their second quarter results recently, more good news turned up for the insurance company. It turns out that there was a double digit increase in their profits and that it looked like 2011 would bring another good year for the company. During this unbelievable second quarter of the year for UnitedHealth, their net income rose about 13 percent to 1.26 billion dollars or $1.16 a share. One year ago, their net income was 1.12 billion dollars or 99 cents a share. Also, the revenue for the country increased 8 percent to 25.23 billion dollars. Out of all of the insurance companies in the nation, United Health was the first large company to report excellent results like these. The higher profits by the company appear to be a result of the high budget conciseness of their costumers, even though the insurers ask for higher premiums. Because of the recession many Americans have been putting off medical care over the past few months. This is because every time that they seek medical care, the amount they have to pay for their medical bills increase while their deductibles and copayments climb. Many health insurers say that it is too soon to tell whether utilization of health insurance would eventually rebound to the way it was beforehand. They could not count on demand for medical care to stay as low as it has been over the past few months. Over the next few months, UnitedHealth will receive pressure on its gross margin percentage from government customers and higher utilization.

Brent Katz

AP Economics

Price is the amount, usually of money, that is offered or asked for when something is bought or sold. Prices are extremely important to the current economy of the United States. In order to determine the value of an object, there has to be a price on the object to compare it to other objects. Prices are seen everywhere when goods are bought or sold in the United States. An example of prices in the Unites States is in the New York Times article U.S. Housing Prices Rise Slightly, but Remain Weak by Christina Hauser. This article is about the real estate market which has taken a huge hit from the recession but it is starting to get better. The article states that after the second consecutive month of May, the prices of houses on the market have gone up but there is still a very long way before there is a full recovery of the market. One of the privet indexes that showed prices of homes called the Standard & Poors/Case-Shiller index went up one percent in the month of April. The prices in 16 out of the 20 cities went up and the prices in only 3 cities, Detroit, Las Vegas, and Tampa fell. In another case, the Commerce Department announced an increase in home prices for the month of June. The median sale price for a new home was raised by 5.8 percent to $235,200. The prices rose 7 percent throughout the year. David M. Blitzer the chairman of the index committee at S. & P. home price indexes stated that they need to see a sustained increase that is longer than only two months to confirm that the real estate market is actually recovering from the horrible recession. Analysts are predicting this upswing in the prices of homes to start declining by October and the market to return back to its state previous to April. There is very little hope for the real estate market to recover in the year 2011.

Brent Katz

AP Economics

When something is International, it is involving two or more countries or their citizens. The Unites States deals with other countries economies every single day. Today, the United States is involved in many different overseas markets whether they are lending money to foreign nations or borrowing, they still deal with international markets. The New York Times article Asia Seeks to Cut Its Ties to Western Borrowers by Emily Kaiser shows how the United States deals internationally with different countries over certain economic issues. This article is about the Asian nations trying to avoid the United States debt default. But this will only solve the immediate financial problems for them. Reuters examined Asian finances and they showed that Asia is healthy financially and has vast amounts of reserves on hand to counter any sudden reversal of investment flows. Some locations in Asia like Singapore and China are already formulating plans to cut their exposure to the United States dollar. Some countries want to but are not able to. In Taiwan for example, foreigners hold $480 billion worth of stocks and bonds which eclipses the $ 400 billion reserve in the country. Also in South Korea, foreigners hold $450 billion in stocks and bonds which dominates the countrys $304 in reserves. What is keeping the United States out of debt are European countries borrowing from us but a problem that is soon to be is European countries not taking out loans from the United States because the interest rates are not affordable. Although Asia is more exposed to U.S. government debt than Europe, it relies more on European banks than American ones for private financing. European claims in Asia are almost three times that of the United States. Whether we like it or not, people are gravitating away from the US dollar.

Brent Katz

AP Economics

Production is the making or creating of goods or products. Production is extremely important to the United States Economy. In order for consumers to purchase and have demand for a product, it has to be produced or created. The New York Times article Crop Yield Raises Risk to Food Cost by William Newman shows how the production of important plants being grown can affect the prices on them in the end. Many important groceries such as pasta meat and vegetable oil may see a rise in prices in the coming months. The brutal weather, heat, drought, and flooding took a toll on the production of wheat soybeans and corn being grown on American farms. Commodities experts say that the production of these crops may cause higher prices for manufactures and consumers. The Agriculture Departments production and supply and demand reports, including information from a survey of farmers and visits to fields, predicted a national average corn yield of 153 bushels an acre, down from nearly 159 bushels in the governments previous forecast. They also predicted a small drop on the acres of corn being farmed this fall. The dry hot weather puts a lot of pressure on the corn and lowers the amount of energy the corn has to make kernels. Joel C. Widenor, a meteorologist with the Commodity Weather Group said that this July has been the hottest July since 1955 and the fourth hottest July in the prime corngrowing region in the last 117 years. This is why the corn production has been low this year. Even though there will be led corn growing the farmers responded to this by increasing the acreage that they are growing corn. It would be the same as it was before hand because the lack of corn grown per acre is saved by just increasing the acreage. The Agriculture Departments reports also lowered the forecast for soybean yield and the total soybean harvest. The lack of production on these products even raises the products on other prices such as meat. If the cost of grain goes up, it forces farmers to raise fewer animals to harvest the grains.

Brent Katz

AP Economics

Money is a current medium of exchange in the form of coins and banknotes. Money is seen every single day in the United States. In order to buy goods or products, one needs to pay with money in exchange for the product. Money is extremely important to everyone including many schools. Schools have a certain budget to act on in order to keep the school running. Principals have to be smart to make sure the school gets the most out of their money possible in order for the school to function well. The NY Times article Lessons in Austerity: How City Principals Make Budgets Work by Fernanda Santos shows how schools plan to use their money thats left after the school budget cuts. Five months after Mayor Michael R. Bloomberg outlined a plan to give principals more autonomy to run their schools, the city imposed what would be the first of five consecutive cuts to the schools budget. Principals are forced to cut jobs, materials, and programs that are not needed anymore. They fired coaches that can help teachers teach and also teachers whose salaries they cannot pay. While the Department of Educations budget increased as a whole, so have expenses. This means schools whose budgets are malleable have been asked to cut 13.7 percent of their budgets since 2007. For one principal Lisa Siegman, she is forced to place students in classes of 30 instead of 24 in order to cope for the lack of teachers. Siegmans school is one of 250 city schools to say that their budget was not enough to cover their expenses. This compares to the 166 schools last year. The first decisions on the appeals didnt turn out well for 88 of the 250 schools. The principals of these schools have nothing left to do but think of other ways to cut the budgets. Some of the schools with budget cuts include Science, Technology and Research Early College School, High School for Law Enforcement and Public Safety, Charrette School, Horace Greeley Intermediate School, and Public School 65.

Brent Katz

AP Economics

Transportation is means of conveyance or travel from one place to another. Transportation is seen every single day in the United States. In order to get from one place to another, people must use means of transportation. This can affect the economy in a large way. In jobs that deal with the economy, people need to be at work every day. If they are not there it can hurt the economy. In the New York Times article After Storm, Markets Plan for Business as Usual by Graham Bowley and Kevin Roose, The New York Stock Exchange and The New York Federal Reserve were relying on public transportation to get their companies running after the devastating Hurricane Irene. The nations stock exchanges, after consulting with the Securities and Exchange Commission, said that they planned to open their doors on Monday. With negligible physical damage from Hurricane Irene, the question for Wall Street was whether mass transit would be able to get people onto the trading floors in Manhattan. But even without subways and buses, the New York Stock Exchange and the companies that employ the traders on the floor of the exchange have contingency plans to help them function with minimal staff. Many of their employees live in Manhattan or expect to drive into the city, while others were put up in hotels over the weekend. The New York Federal Reserve was also unaffected by the storm and made transportation arrangements even if the public transportation system were not to be running. Many of New Yorks largest investment banks have their headquarters in Midtown Manhattan and thus fell outside the citys designated evacuation zones. They were planning on opening for business as normal on Monday, although some were still looking at ways to transport staff into New York if mass transit was not functioning. Even though most of the important companies have planned for no transportation, some of them need public transportation and could be in trouble if it isnt running.