Eco 372 Week 4

In the world today many American companies do not have just a U.S. presence they are international companies meaning they do business all around the world. One of the largest companies in the world is Walmart. Walmart is currently in twenty-eight countries and operates under sixty-five different banners worldwide. This paper is to bring light to what the president and Congress do to stimulate the economy and what the president and Congress do to contract the economy. What the Federal Reserve does to stimulate the economy and what the Federal Reserve does to contract the economy. Show what motivates policymakers to stimulate the economy or contract the economy. Provide what the Federal Reserve say about its policy goals. Show what the Federal Reserve says about the strength of the economy. Give light to how the strength of other economies outside of the U.S. affects Walmart. Finally, recommend changes in Walmarts competitive strategies and supply chain.  

The president and Congress the stimulate the economy by taking action to create more jobs for US workers some of the ways this is being done is through new American job tax credits. This tax credit is a three thousand dollar refundable credit for every full-time job a company produces  ("The Obama-Biden Plan", 2015).  Stimulating the economy is a long process that takes time and planning from the president and Congress. Other ways the economy can be stimulated is by investing in the nation's human capital and physical capital. Investing in human capital will help retain more local government jobs such as teachers, police officers, and firefighters.  The American Jobs Act includes $35 billion to prevent up to 280,000 teacher layoffs and keep police officers and firefighters on the job (Boushey, 2015). Congress and the president contract the economy by releasing funds to local governments to help the growth of the economy. In the governments report the economic activity contracted because of a more dismal trade performance and continued caution by businesses and consumers alike (Schwartz, 2015).  

The Federal Reserve has the most impact on the stimulation of the economy. Since the Federal Reserve is directly in charge of lending rates and inflation rate they can stimulate the economy by having lower interest rates. Low-interest rates drive more consumers to buy large items like homes and cars; it also makes getting a loan easier. When short- and long-term interest rates go down, it becomes cheaper to borrow, so households are more willing to buy goods and services and firms are in a better position to purchase items to expand their businesses, such as property and equipment ("How Does Monetary Policy Influence Inflation And Employment?", 2015). When it comes to contracting the economy by controlling the amount of money that is in the market. Contraction is stated as when the economy is on the decline; contraction occurs after the business cycle peaks, but before it becomes a trough. The Federal Reserve tries to control this by lowering interest rates allowing more bank to bank lending.