Promotion Mix of Pepsi

The Federal Reserve has the dual job of ensuring price stability and maximum employment, which are contradictory objectives. The Feds try to achieve the goals through monetary policy which determines the demand and supply of money by controlling interest rates. The Fed’s goal is to achieve a natural rate of unemployment of more or less 5%. When the actual unemployment figures are below the natural rate of unemployment, inflation increases and there is a high demand of goods and services propelling the economy with the ensuing labor demands and the pressure it places on wages, which in turn produces inflation. When the Fed is faced with this scenario, it must increase the rates to slow the growth and achieve price stability (contractionary cycle).

Reason is, the current demand forecast could be different with price increase. The risk is too high and doesn’t create growth.

This is an example of complicating the policy response. In recent years, a singular emphasis on targeting inflation has come to dominate debates on macroeconomic policy with strong calls to leave monetary and foreign exchange policies to an independent central bank. However, whatever the specific tools employed and regardless of who controls them, fighting inflation usually leads to higher unemployment and the risk of lower investment and growth in the medium term.

To begin, the article explains the Federal Reserve’s plan to take a careful approach to enacting contractionary monetary policies, policies used to decrease money supply, in the future. Last December the Federal Reserve raised the interest rates after they had been near zero for years to ensure inflation was kept in check and to promote economic growth. It appeared the economy would be in for another increase in the interest rates sometime this year, but the Feds have rethought that strategy. If the Federal Reserve were to continue to raise interest rates it would have short-run and long-run effects on the Money Market, Goods and Services Market, Planned Investment, Phillip Curve, and Aggregated Supply and Demand. These effects are aspects that have to be considered because they express and explain the effects the increase in interest rates has on the economy and explain if the Federal Reserve is enacting the correct policy to achieve their goal.

1). In 2016, the inflation rate was at 2.07 percent, and as of February 2017 the rate is about .90 percent (“Inflation Rate,” n.d.). As we can see, the economy has bounced back from its position during the recession. GDP has increased drastically since 2009, unemployment has decreased past its position from 2007, the interest rate has risen, and inflation has also gone up which indicates a strong and healthy economy. Although a higher interest rate is unfavorable for consumers and businesses, it means that the government is confident that the economy will continue to improve. This also means that consumers have enough disposable income to spend on whatever they wish, so the government does not need to lower the rate in order to encourage borrowing and spending. These metrics indicate that the economy has recovered from the Great Recession, and is continuing to improve.

• As previously stated in the executive summary, the United States’ economy is currently stagnating. From week to week we may see a rise in one indicator while there is a fall in another indicator, but none of the rises or falls are drastic enough to have an overwhelming impact on the economy as a whole. Although the economy is not near as strong as it was before the 2008-2009 recession, arguably one of the biggest economic crises of the past decade, there has been much growth and strength throughout the past few years with this year being the first year in which the economy is in somewhat of a holding pattern. I believe, that even with the little growth and movement of the United States economy over the past year, it is still perhaps one of the strongest economies in the world at the moment.

Other economic influences could be that inflation may rise faster than expected in the future as a result of the U.S.’s selling of its debt overseas and the value of the U.S. dollar could fall. (Beams, 2004)

The Federal Reserve 's actions affect the economy because changes in the real interest rate affect planned spending. For example, an increase in the real interest rate raises the cost of borrowing, reducing consumption and planned investment. Thus, by increasing the real interest rate, the Fed can reduce planned spending and short-run equilibrium output. Conversely, by reducing the real interest rate, the Fed can stimulate planned aggregate expenditure and thereby raise short-term equilibrium output. The Fed 's ultimate objectives are to eliminate output gaps and maintain low inflation. To eliminate a recessionary output gap, the Fed will lower the real interest rate. To eliminate an expansionary output gap, the Fed will raise the real interest rate.

In a recently released report entitled GDP Declines Slightly in Fourth Quarter, the United States Department of Commerce and the Bureau of Economic Analysis (BEA) examine recent data trends to provide a detailed advance estimate of the nation's gross domestic product (GDP). A pair of informative graphs is also included within this comprehensive review, with the first illustrating the quarterly growth in real GDP since 2009, and the second depicting annual real GDP growth over the same period of time. Released on January 30th, 2013, the BEA's most recent GDP forecast concludes that real GDP decreased by a rate of 0.1 percent during the fourth quarter of 2012, after a relatively encouraging increase of 3.1 percent during the preceding quarter (Bureau of Economic Analysis, 2013). Among the notable economic trends observed by the BEA in its latest report is a downturn in inventory investment by manufacturing industries, as major retailers struggle to cope with dampened consumer confidence during the prolonged recession (2013) The BEA also finds that government spending was curtailed dramatically, reflecting the Obama administration's commitment to reduce superfluous funding for the defense department.

Coca Cola and Pepsi are the brands with the highest brand equities. Both, Coca Cola and Pepsi have gone through the highs and lows of their business to reach that position. Coca Cola’s marketing has been changing over time with more and more products being added every day, while Pepsi has implemented several smart marketing strategies to improve its turnover and profits. So, let’s see what were the marketing strategies implemented by Coca Cola and Pepsi.

In order to reduce inflation the Australian government has traditionally implemented both contractionary fiscal and monetary policy. This would involve an increase in taxation or reduced government expenditure as well as increases in the official cash rate which would lead to a rise in interest rates in the economy to contain aggregate demand.

would not want to inflate prices too often because it could create a large GDP gap compared to

The main reason for our decision was the state of inflation in the economy. From trends it has been seen that with growth there is an increase in inflation. The U.S. just recorded its highest CPI(249.619), and in this light a contractionary policy is the best method to curb this increase in inflation and restore it back to our targeted range.

Growth in the agricultural sector has been driven by increased production of major food crops such as maize, sorghum and cassava, but the sector’s performance remains below potential. In turn, the services and industrial sectors have shown strong growth. The nascent banking sector and expanding telecommunications sector are key drivers behind services growth, while construction, electricity generation, manufacturing and mining are salient sub-sectors in industrial activity. Looking ahead, the banking and telecommunication sectors will continue to support services growth, while increased electricity generation capacity will benefit the expansion of the manufacturing

| Advocates of active monetary and fiscal policy view the economy as inherently unstable and believe that policy can manage aggregate demand, and thereby, production and employment, to offset the inherent instability. When aggregate demand is inadequate to ensure full employment, policymakers should boost government spending, cut taxes, and expand money supply. However, when aggregate demand is excessive, risking higher inflation, policymakers should cut government spending, raise taxes, and reduce the money supply. Such policy actions put