Sarbanes Oxley :: essays research papers

Effects of a rig care shortage and the necessary government policyTrade faulting Widens, Fuels C alones for Tougher Stance on China WSJ, 4/13/05, A2.The U.S. current fliering (trade deficit) hit a monthly high rising 4.3% in February to $61.04 billion. The increase deficit reflects the rising costs of imported oil and increased consumer acquire for foreign goods. Imports rose by $2.58 billion from January to February as Exports remained constant.The widening trade deficit over the past two years has economists misgivinged more or less the longevity of attracting foreign capital. This is especially true between China and the U.S. where the deficit has increased 50% from 2004, making it the largest deficit of any single country. As a result, there is pressure from industry officials to consider stronger trade guidelines to sink for this widening deficit. The U.S. cites the fixed yuan-dollar exchange rate for keeping Chinas funds relatively weak and therefore encouraging the consumption of Chinese goods in world markets. The U.S. government is considering a 27.5% responsibility on all Chinese products entering the U.S. if Beijing refuses to raise the value of their currency. This purpose of this tariff would be to offset Chinas currency advantage, but critics turn over it whitethorn increase the price of Chinese-made goods more than a currency adjustment. To value the validity the proposed policies for this scenario, we will analyze this issue using intermediate economical theory as a framework. The current account is of great concern to U.S. policymakers as a long-run surplus or deficit may have undesirable effects on the national welfare. Large imbalances washbasin also create political pressures for increased trade restrictions, as is the lawsuit in our study. Therefore, it is important to determine how monetary and fiscal policies will travel the current account with respect to output and the exchange rate. We can represent the relationship b etween the exchange rate, output, and the current account in price of the AA-DD framework. The XX curve shows the combinations of the exchange rate and output where the current account balance would be equal to some desired level (equilibrium). The XX schedule is upward sloping because, ceteris paribus, an increase in output encourages pass on imports and worsens the current account if it is not accompanied by currency depreciation. The point labeled A, is where the graph is in equilibrium and the economy is at full employment (Yf) with a given exchange rate, Eo.