Introduction
The global economic trends are prone to various changes that may impact positively or negatively on the entire system. The variance on the effect on the economic forecast is pegged on the type of policies that the government puts in place. The decision as to whether the relevant finance ministry focuses on the fiscal policies with stringent taxes, or monetary policies which will allow for the government to achieve more regarding improving its GDP, interest rates, savings and the overall rate of employment depends on the financial standing of the said country (Zarnowitz & Braun, 1993). Governments have a lot to do regarding the stimulation of the economy to be accommodative to its citizens. Some of the key considerations that highly affect the history and the overall forecast of the economy include the consumer sentiments. The sentiments of the consumers vary with the fluctuations of the economy and the provision of the consumer confidence as t what they project the economy to be like in times to come (Feldstein, 2017). The overall disposable income for the employees after footing their mandatory bills also gives a projection as to the direction the economy takes as well as the positivity that comes out of it. Other factors as the international price of oil and gas, the wage market prices as well as the international dollar rice are all contributor to the economic forecast and projections (Guido, Nir, Christopher & Henry, 2014).
Economic Outlook and Forecast
The economic changes continue to take place across the globe. A thorough examination of the past instances of economic changes coupled by various elements of the economic fluctuations can enable one to effectively and conclusively project the probable future changes in the economy that may take place (Guido, Nir, Christopher & Henry, 2014). In the examination of the changes that have taken place in the GDP which insinuates the real effect on the per capita, is based on a standard benchmark that is published by the United Nations, Eurostar or even the OECD (Dorothy, 1952). The real GDP 0 , reflects the production possibility of an economy, whereas the GDP e forms the expenditure GDP e is the expenditure balance from the adjustments from the trade balance (Feldstein, 2017). The International Comparison Program which started in the year 1968 was pegged on the aspect of the expenditure side of the economy. The output side of the GDP in the past years has shown a steady increase in the international activities including the imports and exports. According to Feldstein (2017), the earnings from the foreign trade inject the much-needed resource into the economy, thus providing an effective measure for the prospects of the economy.
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The measurement of the real GDP from the expenditure side allows for the calculation of the total value of the produced goods. The final goods may also be used as the intermediary inputs in the production process thus allowing for an effective self-running economy (Feldstein, 2017). The computing of the average of the many GDPs from many countries gives the average price of goods that exist in the international market. However, going by the observed changes in the recent past, there have been overall changes in the measure of labor market productivity particularly in the nonfarm sectors (Feldstein, 2017). There was a reported 3.2% decline from 1995 to 2004 (Feldstein, 2017). On the other data, there was a general decline in the overall GDP of 1.5% from the year 2004-2013 (Feldstein, 2017). The reduction in the degree of decline could spell fortune for the international economies. Thus the industrial engagements should be increases. On the other fronts, the 1.7% changes in the overall productivity should also insinuate an overall decline in the general industrial engagements across the globe (Feldstein, 2017).
The glaring and outright changes in the savings expeditions are a clear pointer to the turbulent trend forecasted in the coming half a decade. The savings takes place in various forms such as the reduction in tax rates as well as the employer pension plan (Dorothy, 1952). The mandatory savings plan (MSP) provides that forces on Danish citizens to take not less than 1% of the total earnings to the savings is a seen as one of the cures to increase the National Savings coffers (Dorothy, 1952). The data indicates that there was an upsurge in the savings plan from the year 1998 to 2004. According to Dorothy (1952), many firms in the international scope have indicated an increase of more than 85% of the total contribution and compliance by all the employees. Such an upsurge in voluntary savings in the employment market s an assurance that in the next five year, there is a chance to hit the all-time high of 90-95% employee savings (Dorothy, 1952).
There have also been changes in savings in relevance to the changes in the GDP. There is an overall change in the overall savings about the changes in the income level is a matter of consideration (Dorothy, 1952). The real income highly affects the number of resources than an employee will be taking to savings and the amount to consume. The savings as a function of income can be denoted as
S= f(Y).
Therefore, an increase in the level of income (Y) will automatically lead to the amount of money an individual is willing to save (S) (Dorothy, 1952) . Therefore, with the projection on the marginal propensity to consume (MD), it is possible to determine the degree of savings that are likely to occur in the next five years. The savings at a provided earning bracket will project the future earnings for all workers individually and cumulatively in the said bracket (Dorothy, 1952) .
The International Corporate Equity Associations (ICEA) shows a general increase in the investments which increased almost ten times between the years 1985 to 1990 ( Guido, Nir, Christopher & Henry, 2014) . Some of the factors that highly influence the international investment trend include but are not limited to the general level of earnings for the general public. The society will only be willing to invest as much as they earn ( Guido, Nir, Christopher & Henry, 2014) .
Employment is a huge factor in the determination of the global economic growth. The number of citizens underemployment and not thereof means that the economy is duly set for proper growth and establishment ( Guido, Nir, Christopher & Henry, 2014) . The continued disappearance of jobs as was realized by Guido et al. is a clear indication of the turbulent economic times ahead. The polarization f the U.S labor market in the 1980s saw the continuous decrease in the middle-wage labor market in a worrying manner ( Guido, Nir, Christopher & Henry, 2014) . The polarization is caused by the continuous disappearance of the per capita employment engagement. The research that used the Current Population Survey (CPS) data to match the employment trend in the United States found many flaws in the employment trends in the States. The findings in 2010 showed up to 5% decline in the Standard Occupation Classification of the non-routine cognitive occupations such as the management, business, science, and arts ( Guido, Nir, Christopher & Henry, 2014) . The routine cognitive employments include such tasks as the management roles, sales, and office occupations. With the evidence of the increased chances in the non-cognitive employments, there are chances of up to 10% increases in the manual employment coming at the wake of the shrinking formal sector with the expansion of the informal sector taking center stage of the overall employment ( Guido, Nir, Christopher & Henry, 2014).
Analyzing Economic Changes and Forecast
There are several ways of economic changes. An in-depth insight into the prospects of the business and economy is pegged on the various components of the economy as discusses. The greatest aspect is the consideration of the GNP and the GDP impact on the economy and how it can positively or negatively influence the growth of all the other sectors such as employment, interest rates and monetary and fiscal policies ( Guido, Nir, Christopher & Henry, 2014) . The GNP forecasting is egged on the current dollar and general price deflator. The dynamics of economic forecast also relies on the factors of production such as those that Keynes discussed including the Keynes aspects of the interest rates ( Zarnowitz & Braun, 1993) . Such factors ate interest rates; unemployment and the interest charged on the real estate business all influence the state of the economy in the future.
How Government Policies Influence Economic Growth
The government policies are in two broad parts: the fiscal policies and the monetary policy. The fiscal policies particularly affect the government taxing scheme. The increased spending on goods and services by the government is a sure way of stimulating economic growth. The increase in demand means that the production will automatically go up (Zarnowitz & Braun, 1993). To increase the production, the producers and relevant industries must increase the number of employees at their disposal.
Decreasing taxes will, on the other hand, stimulate economic growth. The decreased taxes mean that the consumers will have increased disposable income to spend on purchases and other transactions comfortably. Therefore, there is being increased demand for goods and services by the consumers, leading to an expansionary effect on the economy (Dorothy, 1952). The banks will be in a position to loan the money that they have in their coffers which will be spent by the consumers.
On the other hand, the central banks always strive to maintain the money balance and to steady the price inflation. The central bank will be in a position to stabilize and control the price of basic goods to the affordability y the general public (Dorothy, 1952). The controlled prices will thus give room for the consumers to spend more and thus grow the economy further. On the other hand, very high process have a negative effect on the economy making it so hard for the economy to grow at the same rate as it would have if effective monetary policies were in place.
Monetary Policies Effect On the Price Levels, Inflation Rates, Costs, and Other Real and Nominal Variables.
The monetary policies have a varying effect on the various areas of the economy including the price levels. Whenever the central bank decides to increase money supply into the economy, such moves lead to price inflation. The value of money will decline whereas the producers will have to increase the prices of the basic commodities. The consumers will bear the increased prices by the producers, and the inflation of prices will, therefore, accrue to the increased cost of production as well as the transaction cost of operation (Feldstein, 2017).
On the contrary, if the central bank absorbs the surplus money in the economy, the real value of money will increase. Therefore, the cost of production will be normal. There will be a decline in the price of goods due to the declining amount of inflation in the economy. Therefore, the monetary policies have real impact and effect on the type of economy in play at any given time.
Importance Of The Market For Loanable Funds And The Market For Foreign-Currency Exchange To The Achievement Of The Strategic Plan.
The market for loanable funds has a real effect on the level of GDP growth in any given country. The fund plays a central role in the development and the stability of the economy across the globe for all sectors. Both the market for loanable funds and the market for a foreign exchange play a critical role in the establishment of the strategic plan in any economy. Strategic plan involves the creation and development of goals, visions, and missions for all the economic sectors. The strategic planning also takes into considerations such factors as the kind of resources needed in the market and the ways to obtain the very resources (Feldstein, 2017).
The two market types solve these strategic issues by taking into perspective the issues and providing solutions that include but not limited to organizing to help the liquidity in the economy. They also provide the relevant resources needed for the effective running of the economy (Guido, Nir, Christopher & Henry, 2014). The market for foreign exchange helps the market in the conversion of the foreign funds as well as assisting them with the relevant market capital needs of the business.
The Achievement of Strategic Plan
The achievement of the strategic plans varies, depending on the timeliness of the process and the implementation of the plan to the very core. The strategic plan, by itself, is achievable with the right monetary and fiscal policies in place. For instance, when the government has the right policies in place, there is no hindrance whatsoever to the achievement of the strategic plans (Guido, Nir, Christopher & Henry, 2014). The market for loanable funds provides adequate thrust to the business community to remain liquid as they seek loans to finance their operations including the production process as well as the improvements on their competitiveness in the market scope (Dorothy, 1952). The market for foreign exchange equally enables the relevant country to meet its plan by meeting the vision and mission of the expansionary economy that accommodates the unemployed as well.
References
Dorothy, S. B. (1952). Family Savings about Changes in the Level and Distribution of Income: Studies in Income and Wealth. Bureau of Labor Statistics. Vol. 15 (p. 103 - 130). Accessed on 28 th 2018 August from http://www.nber.org/chapters/c9767.pdf
Feldstein, M. S. (2017). Underestimating the Real Growth Of GDP, Personal Income, And Productivity. NBER Working Paper Series. National Bureau of Economic Research , 1050 Massachusetts Avenue. Cambridge, Ma 0213. Accessed on 28 th 2018 August from http://www.nber.org/papers/w23306.pdf
Guido, M. C., Nir, J., Christopher, J. N., & Henry, E. S. (2014). The Micro and Macro Of Disappearing Routine Jobs: A Flows Approach. National Bureau of Economic Research. 1050 Massachusetts Avenue Cambridge, MA 02138. Accessed on 28 th August 2018 from http://www.nber.org/papers/w20307.pdf
Zarnowitz, V., & Braun, P. (1993). Twenty-two Years of the NBER-ASA Quarterly Economic Outlook Surveys: Aspects and Comparisons of Forecasting Performance. Business Cycles, Indicators, and Forecasting. University of Chicago Press. 0-226-77488-0. 11 – 94. Accessed on 28 th August from http://www.nber.org/chapters/c7189.pdf
