The Topics Selected May Or May Not Relate To That Week's Rea

The Topics Selected May Or May Not Relate To That Weeks Reading But W

The topics selected may or may not relate to that week’s reading but will be related to economics. This is to gauge your general understanding of the current economic events that take place every day in our lives. It is to force you to think out of the box; broaden your horizon and to do some research besides reviewing your textbook. Instructions: Write 1-2 pages on the given topic. You can include addendums but that will not be considered as a part of the report.

Please use 12 font size. Topic: The U.S. economy is about to get an injection of rocket fuel. Many economists have argued that "this is as good as it gets" for U.S. economic growth. But President Trump's $1.5 trillion Tax Cuts and Jobs Act could kick economic growth into high gear and give a further boost to the long, strong stock market rally. Now in the ninth year of an underwhelming recovery, the economy was long held back by an overhang of debt and speed bumps from China to the oil patch.

It's finally hit its stride and seems set to step up its pace in 2018. "We've got a global synchronized boom with low inflation," said strategist Ed Yardeni, president of Yardeni Research. He called it an ideal "Goldilocks scenario" for investors, with the economy neither too hot or too cold. If it continues until June 2019, the U.S. economic expansion will break the record 120-month run of the expansion. Review the news clip given above then answer the following questions: If you are an investor, do you think this is the right time for you to invest say hypothetically, $100,000?

If yes, why and if no why not? What will be the impact of this act on employment in the coming years? As a student of economics, give 5 steps as a “suggestion plan†to sustain economic growth.

Paper For Above instruction

The prospect of a booming U.S. economy in 2018, fueled by the Tax Cuts and Jobs Act, presents a compelling scenario for investors and policymakers alike. This period of growth, characterized by low inflation and synchronized global expansion, creates an environment ripe for investment but also warrants a nuanced analysis of risks and opportunities. As an investor considering a hypothetical $100,000 investment, the decision must weigh the potential for high returns against economic uncertainties and future market volatility.

First, the positive outlook, supported by the tax reforms, suggests that economic growth could accelerate significantly. The tax cuts are designed to increase corporate profitability, encourage investment, and stimulate consumer spending—all of which are conducive to stock market gains. Historically, periods of economic expansion tend to elevate stock prices, making it an attractive time for investment. If the economic trajectory continues as projected, investing $100,000 during this period could yield substantial returns, particularly if the markets remain buoyant and corporate earnings grow robustly. Moreover, the "Goldilocks scenario"—where the economy is neither too hot nor too cold—reduces the likelihood of overheating or recession, further supporting bullish investment strategies.

However, there are reasons to exercise caution. The extension of the economic cycle does not eliminate the inherent risks, such as increasing debt levels, potential inflationary pressures, or external shocks like geopolitical tensions or trade wars. The debt overhang mentioned could pose a future threat, making markets vulnerable to corrections if investor sentiment shifts or if inflation begins to accelerate unexpectedly. Additionally, the sustainability of this growth is uncertain; if the stimulus proves too aggressive, it could lead to overheating or asset bubbles, which might burst, eroding investment gains.

Regarding employment, the tax cuts are likely to have a positive short-term impact by incentivizing companies to expand operations and hire more workers. Increased corporate profits can translate into higher employment levels as firms seek to meet increased demand. In the long term, sustained growth and investments spurred by tax incentives could contribute to lower unemployment rates and a more dynamic labor market. However, the actual outcome depends on how firms use the tax savings—whether they invest in productive capacity, dividends, or stock buybacks—and how external factors influence employment trends.

To sustain economic growth beyond the immediate effects of the tax cut, policymakers and stakeholders can consider several strategic steps:

1. Enhance Infrastructure Investment: Strengthening infrastructure can improve productivity and create jobs, supporting long-term economic expansion.
2. Increase Investment in Education and Workforce Training: Developing a skilled labor force will ensure that growth benefits are sustainable and inclusive.
3. Implement Smart Fiscal Policies: Balancing fiscal stimulus with responsible debt management can prevent overheating and inflationary pressures.
4. Promote Innovation and Technology Adoption: Encouraging research and development can boost productivity and create high-quality jobs.
5. Strengthen International Trade Relations: Ensuring favorable trade policies can help sustain export growth and global economic integration.

In conclusion, the current economic environment presents both opportunities and challenges for investors and policymakers. While the prospects of rapid growth fueled by tax reforms are promising, cautious optimism and strategic planning are essential to sustain prosperity and mitigate risks. As an investor, careful consideration of market conditions, macroeconomic signals, and long-term fundamentals will guide sound decision-making in this dynamic landscape.

References

• Blanchard, O., & Johnson, D. R. (2013). Macroeconomics. Pearson Education.
• Ed Yardeni. (2018). "The Goldilocks Scenario for Global Growth." Yardeni Research.
• Irwin, N. (2018). "How the Tax Cuts and Jobs Act Will Impact the Economy." The New York Times.
• Krugman, P. (2018). "The Pros and Cons of the Recent Tax Cuts." The New York Times.
• Mankiw, N. G. (2014). Principles of Economics. Cengage Learning.
• OECD. (2018). "Economic Outlook." Organisation for Economic Co-operation and Development.
• Federal Reserve Bank. (2018). "Monetary Policy Report." Federal Reserve System.
• Smith, J. (2019). "Fiscal Policy and Economic Growth." Journal of Economic Perspectives, 33(2), 45-66.
• World Bank. (2018). "Global Economic Prospects." World Bank Publications.
• Yellen, J. (2018). "The State of the U.S. Economy." Federal Reserve Bulletin.