The ressesion in the fashion industry Essay Example | Topics and Well Written Essays - 2000 words

The ressesion in the fashion industry - Essay Example The fashion industry together with other textile products industry has undergone a downturn due to the financial adversity (Global Recession Impacts on Fashion Industry 2009). Fashion is a complicated business with no standard to define the companies in the industry. Fashion companies belong to a broad of range of firms that produces apparel, footwear, textile accessories and home furnishings. The industry is formed of diverse professionals and firms that include fashion designing, modeling, marketing, retailing, planning and distribution. Fashion includes brands and local sellers to whom the recession has brought in a struggle to sell the products for survival. The impact is felt among the various members of the fashion industry in a different manner and the similarity among the members is their poor financial status. The lavish spending attitude of consumers is now replaced by a cautious closefisted consumer behavior due to the global trend of increasing unemployment, plunging home budgets and the credit squeeze. Some of the few items consumers cut back during financial crisis is fashion accessories and apparels. This has led several fashion companies to contact credit problems. Various companies around the world have already filed for bankruptcy. Even big labels in the fashion industry are faced with financial problem and have declared their negative financial trend. Some companies have gone to the extent of expecting a take over or are negotiating a partnership deal with consenting investors for financial support. Many innovative plans and events are being cancelled and the plans to cut down jobs in regional offices are more of regular news. Fashion labels in fashion cities in the Italy have held discussions with the government to appeal for support and reduce the burden of the financial downturn. Fashion houses are hesitating to show the collection for various seasons in 2009 since the shows are expensive without any guarantee of returns. The

Macroeconomics of Financial Markets Assignment Example | Topics and Well Written Essays - 2250 words

Macroeconomics of Financial Markets - Assignment Example Foreign businesses that would like to purchase goods in the US have to convert the currencies they have into US dollars. However, a rising dollar makes the foreign businesses to use much of their currencies to obtain a unit of US dollar. Thus, the foreign businesses will use more US dollars to obtain a product in the US. This means that businesses in the US that export goods and services will prefer a rising dollar. As the dollar rises, they obtain higher amounts for the goods that they export. This would be the same for a European tourist who comes to the US to visit the Grand Canyon. The tourist will have to change the European pounds that he or she has for US dollars. However, in case the dollar is rising, it means that the value of the dollar is declining. Thus, one unit of European pound will fetch more units of US dollar (Thomas, 2006). Therefore, the European tourist will obtain more units of US dollars. He or she will be able to access more products and services when he or sh e reaches the United States. Question Two The Fed can use various methods to create money. Creation of money refers to the methods that the Fed uses to manage the quantity of money that is in circulation in the economy. One of the methods is through open market operations. This refers to purchase and sale of United States’ government bonds (Ritter, Silber, & Udell, 2004). The Fed can buy government bonds from the public. This increases the amount of money in circulation in the United States. As the government buys bonds, it releases money into the economy. Alternatively, in case the Fed wants to reduce the amount of money in the economy, it can sell government bonds to the public (Mishkin, 2010). The sale of government bonds makes the Fed take money from the public and offers the public bonds. Therefore, the amount of money in circulation decreases. The Fed can use commercial banks’ reserve requirements to influence the amount of money in circulation (Burton, Brown, & Burton, 2009). Commercial banks must retain a given proportion of the deposits they receive. Thus, commercial banks cannot lend all the money deposited in their accounts. An increase in reserve ratio means that commercial banks will reduce the amount of money that they lend to the public. This reduces the amount of money in circulation. On the other hand, a decrease in reserve ratio requirement means that commercial banks can lend more money to the customers. Thus, the amount of money in circulation increases. The Fed can also influence the amount of money in circulation through the discount window (Thomas, 2006). Commercial banks usually borrow money from the Fed since it is the lender of the last resort. The Fed usually charges an interest whenever commercial banks borrow money. The Fed can increase the interest rate it charges to the commercial banks to reduce the amount of money in circulation. Alternatively, it can reduce the interest rate to increase the amount of money in cir culation. Finally, the Fed can make recommendations to the treasury so that money supply can be increased through printing (Ritter, Silber, & Udell, 2004). The Fed does not directly control money through printing or minting. The treasury prints notes and mints coins. This method can be used to direct the quantity of money in the economy. The most powerful method is the open market operation. However, the most commonly used method is the discount window or rate. It enables gradual reduction or increase in money in