Profits hit by rate rises Essay Example | Topics and Well Written Essays - 500 words

Profits hit by rate rises - Essay Example The increase in the accumulation of inventories however reduces the GDP as firms tend to avoid the "overhang of unsold inventories" as mentioned in the article. As real GDP converges to equilibrium i.e. aggregate planned expenditure starts to match real GDP, than the inventories of the firm start to draw down. If we take the scenario where inventories start to accumulate, a drift towards equilibrium would suggest that the planned expenditure exceeds real GDP hence in order to adjust the planned expenditure in line with the real GDP, inventories will start to reduce As discussed above, there are two components of aggregate expenditure i.e. autonomous expenditure and induced expenditures. Autonomous, investments, exports expenditure include government spending as well as autonomous consumption. The induced expenditure most involves private consumption including imports, savings, consumer expenditure etc. The autonomous expenditure does not vary with the changes in the real GDP therefore there is a very little impact of interest rises on this type of expenditure in short run. However, induced expenditure gets affected by the series of rises in interest rates.

An advantage and a disadvantage of a large, public company because of Assignment

An advantage and a disadvantage of a large, public company because of its corporate form of ownership - Assignment Example For instance, a key benefit that can be seen is with regards to the fact that the initial public offering in stock price of Twitter has progressively risen since its first offering (Wilhelm, 2014). This of course stands in stark contrast to what was predicted and the way in which a similar platform, Facebook, behave. However, tangential to this, a noted drawback that the authors of several articles have noted has to do with the fact that Twitter has the difficulty of living up to an unrealistic expectation. As individuals have seen the rapid growth and advance in stock price, more and more investors have come to see this as a lucrative investment through which they can make something of a sudden gain upon their initial investments. However, the fact of the matter is that Twitter is an established tech company and seeks to provide a level of resilient growth without being seen as an investment instrument. In this very manner, the negative drawback of the growth that Twitter is facing is ultimately the result of its success. Wilhelm,  A. (2014, January 13).  IPO Underwriter Goldman Sachs Boosts Its Twitter Target 41% To $65 | TechCrunch. Retrieved  February  3, 2014, from