Milestone 3: Business Recommendations Based on Economic Projections

Milestone 3: Business Recommendations Based on Economic Projections

Learning Team D: Angeline Muliawan, Shonte Allen, and Zach Brewer

ECO/561 - ECONOMICS

January 11, 2011

Professor Kevin Mc Kinley

Big Drive Auto

Big Drive Auto is as major player in the automotive industry. Challenging economic times have caused the organization carefully evaluate current business plans in preparation for future projections concerning economic conditions. Within the automotive industry, current economic challenges tend to invoke many forms of change within consumer demand, etc. Big Drive Auto is an organization that has considered all accounts. Thus, the organization is restructuring, rethinking, and realigning all aspects of the current business into consideration of future demands. This paper will discuss recommendations for an appropriate course concerning business decisions in contrast to the projected credit markets, business decisions that relate to trade and specialization concerning the effects of the future global markets. Lastly, supporting evidence will be provided for each recommendation, and a modification for alternative economic futures will be given.

Projected Credit Markets

Initially, a credit market is a broad market for organizations who are seeking venue to raise funds through debt issuance. Typically, a credit market involved three bonds known as the junk bonds short-term commercial, and investment-grade bonds. Within the United States, the Federal Reserve Board (Feds) affects credit market performance by influencing interest rates. The Feds target lower interest rates to ensure economic growth, and raises rates as a means to manage inflation.

Today’s projected credit markets expose the United States in a credit crunch. Stunning bankruptcy levels and other economic crisis indicator expose struggling credit markets, which make it more difficult for struggling U.S. carmakers to finance their future. These negative effects...