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Essay / Research Paper Abstract
A 2.5 page paper. The writer posits that over-investment in capital expenditures and surplus inventories in the late 1990s are two causes for the slow recovery of the American economy. The writer also proposes that unexpected events, such as the Attack on America also has a strong impact on the economy. These propositions are supported through experts. Bibliography list 4 sources.
Page Count:
2 pages (~225 words per page)
File: MM12_PGamec.rtf
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Unformatted sample text from the term paper:
the telecommunication industry; unexpected events, and decreased consumer confidence in economic recovery. There is support for at least some of these conclusions. For instance, McCarthy, writing for the Federal Reserve
Bank of New York commented that business expansion was at a high pitch during the 1990s, particularly during the late 1990s (2001). As prices of computers and other information equipment
decreased and as stock prices soared, companies were encouraged to expand their operations placing significant amounts of resources in capital expenditures, including the purchase of high tech equipment and software,
as well as in building up inventories (McCarthy, 2001). In fact, expenditures for information equipment grew by more than 20 percent and by 45 percent for computers between 1995 and
the first quarter of 2000 (McCarthy, 2001). Those types of expenditures came to a screeching halt in mid-2000 as technology stocks crashed (McCarthy, 2001) and dot.com businesses folded in droves.
Many argue that this over-investment in machinery, information technology and other capital items has resulted in the slowness of economic recovery in this country (McCarthy, 2001) Addressing the semiconductor industry,
Souza reported that companies in this sector have spent nearly two years getting rid of excess inventory that was accumulated since 2000 and companies now face another challenge: "Having spent
the better part of two years burning off excess inventories, the industry is faced with the possibility of sudden, catastrophic supply shortages by early 2003" (2002). Demand has been slow
in this industry but if it suddenly picks up, it could be hard for companies meet the demand (Souza, 2002). At the same time, those companies who supply components have
still not reduced their excess inventories sufficiently (Souza, 2002). America did not only face the failure of so many high tech companies, mostly dot.com businesses and a falsely inflated stock
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