Term 2 Progress Test 2 Revision Sheet

Study the terms, review questions, and discussion questions from chapter 15 in your Introduction to Business textbook.

R

Study chapters 13 and 14 in the Introduction to Business book.

Get ready for (slightly) fatter paychecks

The most obvious sign of the economic recovery may be in
your paycheck.

As companies return to profitability, many plan to award
employees with better raises in 2011 after years of stagnant wages, according
to two recent reports.

More than 98% of companies said they plan to increase base
pay in 2011, according to Mercer's recent compensation survey.

And separate survey by human resources firm Towers Watson
found that fewer companies are freezing salaries this year, with only 5%
planning to do so in 2011, down from 12% last year and 32% in 2009.

But employees may have to squint to see a difference in
their take-home pay.

The employers surveyed by Mercer said that the average
increase is expected to be 2.8% in 2011, up from 2.7% last year.

A 2.8% raise comes out to about $38 more per paycheck after
taxes for a full-time worker, assuming the employee makes the median annual
income of $50,500 and is paid biweekly.

"Wage growth is going to be very limited this year, but
at least it's heading in the right direction," said Joseph Coombs, a
workplace trends and forecasting specialist for the Society of Human Resources.

Despite the improvement, workers are for the most part still
trying to work their way back to break even. During the recession, high
unemployment and slow economic growth took a toll on wages. After declining in
2009 and staying mostly flat in 2010, national average wage levels are now no
higher than they were at the start of 2008, three years ago, according to a
report released Tuesday by PayScale.com.

Meanwhile, the cost of goods has increased, reducing
consumer buying power, the salary-tracking firm said.

But as business conditions improve and the job market starts
to show signs of life, companies are gaining the flexibility to pay their
workers more - and they have more incentive to try and retain top
talent, Coombs explained.

"For employees who suffered with their employers
through the worst of the recession, things have largely stabilized now and we
can look forward to some incremental improvement," added Laury Sejen, a
rewards practice leader at Towers Watson.

Even though most indicators point to an improvement in the
year ahead, Al Lee, PayScale's director of quantitative analysis, notes that
employers are still far from the days of awarding hefty annual raises.

"At the end of next year the odds are you are not going
to be seeing a fat raise," he said. "If you get a percent or two, be
happy."

summary:

Employment wages are driven by supply and demand, not company profitability
or government mandate. Mickey is right - profitability has been very high over
the last couple of years for most companies. As long as there is a cheap supply
of labor overseas the big businesses will outsource whatever work they can. When
demand for products and services increases businesses will be forced to hire
some in the states and wages will rise as the best employees jump ship for
better offers and some of the unemployed get jobs.

 

 

 

http://money.cnn.com/2011/01/12/pf/wages_to_rise_2011/index.htm?source=cnn_bin&hpt=Sbin

 

 

ECONOMICS PROJECT.

Friedrich Von Hayek's Monetary Theory

There are basically 2 ways of looking at the monetary cycle theory; vertical, where the economy will go in recession or a boom through time. or horizontal, where it will happen via consumers. Hayek concentrated on the horizontal method. he's basically saying that you can control whether the economy will be in recession or not by controlling either consumer goods supply or capital demand. if you supply the same amount of consumer goods, eventually, of course, the demand will rise. so if you just ignore the fact that you need more capital i.e machines, etc. to balance the supply with demand and continue with what you're doing, the economy will not be affected and neither will your firm be. and if you should decrease the amount of consumer goods, the same will occur except that you will require less labor force. Hence, higher unemployment rate. I agree with Hayek that you could control the economy, but not the entire economy. If you think about it, either way you try to balance the chaos that is recession, there is still something there that's helping recession grow as well. like for example, the less consumer goods, more unemployed people, more investment in the economy and therefore, recession. maybe if the labor force was kept the same then it would be flawless. However, I believe the second method is perfect in every way. if the demand increases, you could just ignore it and continue, this may not be good for the company as it may lose consumers and eventually go to firms that increase capital demand or consumer goods supply. banks could intervene in this matter by not giving the firm a loan or increasing the interest rate on them in order to maintain the balance.

A Makeover for the Starbucks Mermaid

Chief executive of the famous Starbucks company, Howard Schultz, has announced that their logo of the mermaid shall no longer have the name of the company written around it as with different coloring of the logo. This was performed because Mr. Schultz believes that the new logo is what the company needs to increase revenue and its reputation as one of the best coffee places ever. He kept the basic mermaid as is in order for the chain and/or company to be easily identified and recognized.

As more and more Coffee companies started coming, Starbucks started to fade easily in the background. for example, about 5 years ago, you would only find Starbucks infront of major firms like Jarir Bookstore and in main streets. but now, maybe because of alot of streets being constructed and all that, they only have a few in Riyadh and more Coffee places like Columbus Cafe, Java Cafe, and amongst others started to rise at a fast rate. I believe Howard Schultz made this redesign so they could make a life extension to the company. they grew it too fast to the point where they had to close 600 stores in America alone in 2008! so i believe he's trying to reestablish the company and grow it back but at a steady speed.

New SBA loans

The banks stopped giving loans easily after the last crisis but what is really surprising that it still gives loans to the leading companies trying to gain what they lost. Small businesses don't really have a good chance to get loans although many of these small businesses could have great potentials The SBA has solved this problem, SBA is a cooperation that lend small businesses loans that does not exceed 250,000. "Many entrepreneurs and small business owners across the country have enormous potential to drive economic growth and create good-paying jobs in their local communities, but too often they face barriers in fulfilling that potential," said Catherine Hughes, chairperson of the SBA's new Advisory Council on Underserved Communities, in a written statement. Many banks after the last crisis has stopped giving loans to small businesses because the big cooperations and companies didn't pay the loans on time. This will be an advantage to SBA because it will attract many customers since it's applications are easy to fill and the approval doesn't take time. This shows a good business customer relationship plus winning the competition hence the banks are busy collecting the loans from the great firms. SBA made a smart move by giving a lot of small loans to many customers ,which will reduce all its risks because it is investing its money in more than one place. A second initiative, called Community Advantage, aims to get SBA-backed loans to under-served communities, such as minority-, women-, and veteran-owned businesses, as well as firms in lower-income or rural areas.

The program encourages borrowers to develop a business plan and work with advisors. Applications should be approved within 5 to 10 days.

link

Canada stocks drop after jobs reports..

Canadian stocks briefly benefited from expectations that the jobs reports are unlikely to change the accommodative monetary policy on both sides of the border.

But Wall Street later succombed to additional selling pressure after a foreclosure ruling in Massachusetts pressured banks.

Among the most active movers in Toronto, Canadian Natural Resources droped 5% after a fire in its Horizon oilsands mine.

Meanwhile, gold stocks rose even as gold futures fell for the fourth session in a row. The February contract on the New York Mercantile Exchange fell $2.80 to US$1,368.90 an ounce.

Canada stocks look to break five-session losing streak..

Canadian justice markets are picking up on global hopefulness that is lifting commodity prices through two catalysts,” said Derek Holt, vice president at Capital Markets Research. “One is Japan’s announced intention to buy European debt. The other is better Chinese loan growth figures that suggest resilient growth in the face of policy tightening.”

Resource shares climbed as prices for gold tapped a high near $1,390 an ounce and oil climbed past $90 per barrel in New York.

Shares of Eldorado Gold Corp. were up 4.1%, Yamana Gold Inc. added 2.4% and Talisman Energy Inc rose 2.5%.

Data showing a fall in housing starts in December, however, weighed on some property stocks. Brookfield Properties Corp. traded up 0.2%, while Riocan Real Estate Investment Trust was nearly unchanged.

In currencies trading, the U.S. dollar traded slightly weaker against the Canadian dollar, buying 99.20 Canadian cents, down from 99.26 cents late Monday in North American trading