Macroeconomic Policy Analysis in the United States

This report analyzes and discusses the major macroeconomic variables and policies in the United States. It covers topics such as the general business environment, inflation, unemployment, economic growth, and government expenditure. The report provides insights for businesses looking to invest in the United States.

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Macroeconomic Policy
By (Name)
Course
Instructor’s Name
Institutional Affiliation
The City and State
The Date

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Table of Contents
1. Executive summary...................................................................................................................1
2. Introduction...............................................................................................................................3
3. Analysis and Discussion of major macroeconomic variables in the United States...................4
3.1. General Business environment..............................................................................................4
3.1.1. starting a business..............................................................................................................4
3.1.2. Electricity...........................................................................................................................8
3.1.3. Property registration.........................................................................................................8
3.1.4. Paying taxes.......................................................................................................................9
3.1.5. Trade across borders.......................................................................................................10
3.1.6. Protecting minority investors..........................................................................................11
3.1.7. Construction permits.......................................................................................................12
3.2. Inflation................................................................................................................................13
3.3. Unemployment.....................................................................................................................15
3.4. Average wage rate................................................................................................................17
3.5. Economic growth.................................................................................................................18
3.6. Real Interest rate.................................................................................................................19
3.7. Government expenditure in the economy............................................................................21
3.8. Taxation policy in the United States....................................................................................22
3.9. Monetary policy...................................................................................................................24
3.10. Effects of the Global Financial Crisis (GFC) in the United States..................................25
4. Conclusion and Recommendation...........................................................................................26
References............................................................................................................................................28

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1. Executive summary
The paper discusses and analyses the macroeconomic variable and polices that can be depended
on to invest in the United States. The report indicates that Primus is a Telecommunication
company that operates in Australia with its major focus on broadband, mobile and fixed services.
Also, the report indicates that the company was the 1ts Telecom carrier to get a license at the
time it was deregulated. The research results indicate that the United States the macrocosmic
factors in the United States favor private investment. The report indicates that the United States
has a higher Gross Domestic Product per capita as compared to Australia. Also, the report
recommends investing in the United States because the business can be in the position to attain
increased economic benefits in the long run.

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2. Introduction
The aim of this report is to provide a detailed knowledge about the macroeconomic conditions of
one of the Australian trading and investment partner in the recent years. Also, the report aims at
illustrating how the changes in the macroeconomic variables and fiscal and monetary policies in
the target country would influence my company's long term investment decision. According to
the "United Nations’ International Standard Industrial Classification of All Economic
Activities," the chosen company is Primus Telecommunications (Eaglen et al 2009). The
company aims at making a long term investment in the United States. Primus is a
Telecommunication company that operates in Australia with its major focus on broadband,
mobile and fixed services. The company was the 1ts Telecom carrier to get a license at the time
it was deregulated. Currently, the company operates in major cities such as Melbourne, Adelaide,
Perth, Brisbane and Sydney. The company is also aiming at investing in the United States and it
needs a general analyses and justification that are favorable for its operations. Therefore, the
report will clearly indicate the macroeconomic variables and policies that the company need to
put into consideration (Phil 2012).
3. Analysis and Discussion of major macroeconomic variables in the United States
3.1. General Business environment
This section aims at analyzing the organization’s environment in the United States including the
factors that can affect the business operation and the factors that can largely influence an
organization’s investment. The environmental factors are considered to affect the general
operation of the company. As a result of the generalenvironmental influencetowards the business

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operation, various trends and events need to be anticipated so as to evaluate the implications of
such events and trends (Matthew 2012).
3.1.1. starting a business
Before starting any business in the United States, various procedures have to be followed so as to
effectively carryout your business activities. The following steps are required for one to begin a
business in the United States,
1. make a decision of the right business that you wish to start
The decision of choosing the right business is considered to be very important because the nature
of the business selected influences all the day to day activities such as taxes, the number of
individual assets at risk. In addition, it is also very important in knowing the type of the business
and selects one that is best according to the business goal and situation (Andrew, et al 2012).
2. Decide the area where to your forming your company
For United States residents, they are required to locate their business or companies in their areas
of residence. For example if an individual resides in California, he or she is advisable to locate
his or her business in California. However, for people who are not residents of the United States
but have plans of stating in the United States, and then they are required to locate their
businesses in Wyoming because it is the best friendly state for business in the United States for
all Non-United states residents (Zandi, & Mark 2009).
3. Get an Agent who is Registered
In this case, all the business or companies in the United States are required to be with a
"Registered Agent" having a physical address but not "P.O.BOX" in the course of normal

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business time/hour in order to receive the documents of the company on their behalf. The
Registered Agent helps the company to receive its legal documents and official papers. A
Registered Agent acts as a service so that a company does not miss any useful document related
to the state taxes or lawsuits. This implies that the Agent must be located in the same state with
the Company (Wheatley, et al 2010).
4. Register your company
After deciding the nature of the business and after deciding the location of such a business, then
the next step should be registration of the company by filling the required fillings (Stiglitz 2010).
5. Get a United States mailing address
Most of the banks in the United States require residential address or mailing addresses in order to
open up any bank account. In the United States, you are required to provide the business address
in case you possess one. However, if you don’t possess a United States address, you can be in the
position to get one using the following companies, iPostal1.com, USAMail.com and many others
(Joseph, et al James 2011).
6. Open a United States bank account for the business
When starting a business in the United States, most non United States residents find it very
difficult to open a bank account in the different states. Opening up a bank account can be done in
case a company gets an EIN. Recently, any company can be in the position to open their business
account. In addition, the entrepreneur is required to visit the United States to open their bank
accounts (Brand 2015).

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7. Open a merchant account of the business in order to receive payments from the clients or
customers
In the United States, the "merchant service account" is free. This service allows the business to
accept debit and credit card transactions from its customers. The merchant account can be
opened after a business has got an EIN. Merchant accounts are got from Authorize.net,
payoneer.com, stripe.com, and Braintreepayments.com (Lang, et al 2012).
8. Get an insurance for the business (if necessary)
The cost of getting insurance varies according to the business operation. In the United States,
business insurance is very important because it helps in protecting a company from different
unexpected costs that may arise in a business operation. If the business is not insured, natural
disasters, lawsuits and accidents could lead to the decline of the business if it is not protected
(Hout 2012).
9. Get ITIN (if the company is a non-United States citizen without SSN)
In case an individual opening up a business in the US is not a citizen and does not have a "Social
Security Number", he or she will be required to have an "Individual Tax Identification Number
(ITIN)." An Individual Tax Identification Number is an individual tax Identity number that is
issued to an individual by the "IRS." ITIN is required for; opening a United States bank account,
apply for any rental apartment, and many others (Tausig 2013).
10. Understand your responsibilities of paying tax and make a file for the taxes
In order to appropriately file a tax in the United States, the entrepreneur is required to consult an
accountant so as to tax his or her taxes at the right time and be in the position to set up his or her

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payroll. By finding an account, the entrepreneur will be able to maximize deductions and reduce
taxes (Olney 2011).
11. make sure that the business is in line with other county, federal and city requirements
This is very important because it helps the entrepreneur to understand if the business is in line
with the laws of that state where it is established. In addition, it helps in understanding if the
business requires a working permit or license. These requirements depend on the location of the
business (Boland, et al 2015).
12. Carryout consultation from the lawyer of the business
Starting a business in the United States is very challenging and complicated. Most of the
entrepreneurs in the United States make a very big mistake of failing to consult their business
lawyers while starting a business. This creates a bigger risk to the personal assets of the business
for example car, property, home, bank account and many others (David 2013).
The process of starting up a business in the United States is longer because it may take up to
three weeks. Each process performed while starting a business in the United States may take one
or two days to be completed. The process of starting up a business in the United States is quite
longer and complicated unlike that of Australia which usually requires only three procedures and
they take a very small period of time (Thomas 2013).
3.1.2. Electricity
The processes and practices of getting electricity are the United States scores 82.15 percent while
Australia scores 82.31 percent. This indicates that Australia has favored practice and procedures
of getting electricity as compared to the United States. To get electricity in the United States,

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various processes have to be followed for example, Applying for electricity, approval of the
application form, getting a utility permit, receive electricity connections, installation, and an
implementing automated machines (Lowrie 2012).
3.1.3. Property registration
In the United States, the registering a property is quite important. The procedures followed while
registering a property in UnitedStates are straightforward so long as the entrepreneur make
enough research and possess the necessary requirements. Here is a procedure followed to register
a property in the United States.
 Calculating of the money paid as "stamp duty." this is in the form of a tax that a state
levies as one of the most important item required to register a property.
 Preparation of a sales Deed, this document is very important during the registration
process. A valid legal sales deed of the company is supposed to appear on the business's
stamped paper.
 Collect the necessary documents, while meeting the sub-registrar, there are some
documents that are required to be checked first.
 Process an appointment to meet the sub-Registrar, registration is only done when a sub-
registrar is present.
 Payment of property registration fees, after paying stamp duty and the sub-registrar
verifying the documents, the owner of the property will be required to pay fees for
registering his or her property
 Collection of the registered documents, after approving the documents by the sub-
registrar, the original registered documents are given back to the property owner.

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Considering the producers required registering property in Australia and United States, they all
look the same but a difference may arise on the time taken to process the registration. The
registration process depends on the terms and conditions of a given country (Stiglitz, & Joseph
2012).
3.1.4. Paying taxes
Before starting a company in any country or area, taxes are the most important things that need
to be considered. Low taxes on foreign companies play an important role in helping the business
grow faster hence increased income in the shortest run. In the United States, business are
supposed to pay a cooperate tax which is implemented most at some local, most state and federal
levels. The tax is imposed on the income that is earned by a business i9n the United States that is
received or earned within one year (Vicki, & Ramsey 2014). The tax is paid using the "employer
Identification Number." Further, all business operating in the United States are supposed to file
their tax returns. The payment of the tax can also be made in estimated payments or advance
installments for most of the states in the United States. Upon making different payments such as
wages, businesses may be in the position to withhold the obligation of a tax (Aneel 2015).
In United States, most of the localities and states impose a corporate income tax. However, the
rules of determining the tax depends on the state or locality. Also, United States imposes a value
added tax to all the commodities produced by a given company. However, Australia gains much
from its VAT because the tax is higher than that of US (Cassens 2014). In United States, the
shareholders of a given company are meant to pay an individual or corporate income tax in case
the earnings of the business are distributed. The distribution of earnings is basically regarded as
"a dividend." Notably, US taxes all foreign or non US companies differently as compared to the

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home businesses. Foreign companies operating in the United States are meant to tax on the
income of the business if the income obtained is in connection with a United States business or
trade. Also, foreign companies operating in the United States are meant to withhold a 30% tax on
interest, royalties, dividends and other forms of income (Greenstone 2012).
3.1.5. Trade across borders
Most of the countries across the world wish to take part in trade across borders so as to increase
their tax revenue and foster economic growth. In United States, trade across borders involves the
international exports and imports of the country. United States is considered to be among the
strong economic markets across the world. The United States trades with various countries
across the globe (Zeigler 2014). In 2006, the Gross United States asset that was held by
foreigners amounted to US$16.3 trillion. Just like Australia, the United States is also a member
of various international trade institutions. The United States joined this organization with an
intention of coming into close with other countries on different issues regarding trade. According
to the internal LPI index of World Bank, the United States is ranked as the 14 and Australia is
the 4th (Cowen 2011,).
Before staring up any form of business, contracts and laws need to be implemented with an
intention of enforcing and protecting the rights of the companies and entrepreneurs. In this case,
a contract is referred to as an agreement signed between different parties with an intention of
creating a "reciprocal obligation" that is enforced by a given law (Cowen 2011). The
enforcement of contracts and laws is vital to the business because it helps in measuring the cost
and time required to resolve any form of business disputes through the local court. In the United
States, the "contract law" governs the transactions that involve selling of goods (Brynjolfsson, et

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al 2011). Before enforcing a given contract the country is required to first follow some indicators
such as the cost of enforcing the contract, the effect of the contract to the parties involved, the
time required to enforce a given contract though courts and the effectiveness of the judicial
process. In this case, the "quality of the judicial process" is very important because it determines
if a given county can be able to form and adapt to good practices which may influence cost and
time performance while enforcing the contracts. According to the data variables of World Bank,
Australia scored 79.00% and the United States scored 72.1 in enforcing contracts (Navarro
2011).
3.1.6. Protecting minority investors
For the business to improve its performance, new investors are required because they provide
new investments to the company. In addition, all companies or businesses which are aim at
expanding and developing, they require getting access to different external financing. The
protection of the minority investors plays a bigger role in increasing the invertors' confidence in
the market (Matthew 2013).According to the recent World Bank statistics, they indicate that
Australia scores 60.00 percent and the United States scores 64.67 in the protection of minority
investors. This indicates that both Australia and the United States almost have the same
performance though US is ranked highly as compared to Australia (Rampell 2012).
In United States, most new comers find a very big challenge in getting credit. Most of the new
migrants in the United States quickly understand that they cannot be in the position to acquire a
credit card, an apartment or even buying a car as a result of lack of credit history. In order to get
credit in the United States, one is required to have at least a credit history. In the United States
where an individual is a temporary or permanent resident is required to begin establishing his or

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her credit history (Victoria 2014). In this case, healthy credit can be made i9f an individual
wishes to get a loan for purchasing a house or car, pay for different items using credit card or
even do other basic activities like opening a utility account or cell phone (Peter, et al 2017). In
some cases, employers may check the credit of an individual before offering him or her a job.
While coming to the United States, everyone is required to prepare to begin building his or her
credit from scratch because it is what everyone goes through. Getting credit in the United States
may take an individual some got time but is very possible to establish it. In order to get a credit
in the United States, one has to follow the following steps (Latham 2018).
 start by applying for an Individual Taxpayer Identification Number (ITIN) or Social
Security Number (SSN)
 Open an account from any bank in your state
 make sure that you possess income
3.1.7. Construction permits
Construction permits help in ensuring that the region has experienced development with an
intention of protecting the interest of the community and the people at large. In this case, a
construction permit helps in regulating building with an intention of ensuring that structural, fire,
and health standards are attained. In the United States, it is always a very big offense to start
building any house minus getting a permit. Also, any individual in the United States who starts
building any house without being permitted does it on his own by violating the "Building By-law
and the Building Code Act." An individual who Violates the "Building By-law and the Building
Code Act" is subjected to legal and financial consequences. In the United States, construction
permits rose to 0.6% in January 2019 as compared to the previous year. As compared to
Australia with 84.59 percentage score of construction permit, the United States has 77.88

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percent. This indicates that Australia performs far better than the United States as regards to
issuing of construction permits (Tankersley, & Jim 2018).
Figure: Construction permits in the United States
Source: https://fred.stlouisfed.org/series/PERMIT
3.2. Inflation
Inflation rate in the united states by years is regarded as the change in the percentage of prices
from a current year to another or year by year. In the United States, the rate of inflation depends
on the stage of any business cycle. The first business stage is expansion. According to the current
statistics from World Bank, they indicate that the rate of inflation in the United States was 0.3
percent in April this year. In the United States, the prices of gas raised by 5.7 percent as a result
of increased prices of oil. An increase in the prices of oil in the United States contributed to a 70
percent increase in the prices of gas. In the United States, the rate of inflation was 2.1 percent
year by year. The core rate of inflation in the United States eliminates the impact created by food
and oil prices. Inflation plays an important role of predicting the economic performance of a

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given nation. In this case, inflation indicates the change in the prices in a given year of any
business cycle. Incase consumers expect price increase of the products; they are always forced to
purchase more at that time instead of waiting. This results into increased demand of the products
(Carmen, et al 2011).
Figure one: Inflation in the US (% annual)
Source: https://data.worldbank.org/indicator/FP.CPI.TOTL.ZG?locations=US
3.3. Unemployment
The United States "Bureau of Labor statistic" defines unemployment as, people who do not have
jobs, jobless people who have been looking for jobs within the past four weeks, people who have
neither looked for jobs nor employed within the last four weeks, and workers who are expecting

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to go back to their previous jobs. In the United states, the rate of unemployment is measured as "
the number of persons unemployed divided by the civilian labor force, rose from 5.0% in
December 2007 to peak at 10.0% in October 2009, before steadily falling to 4.7% by December
2016 and then to 3.9% by December 2018." In the United States, there are various domestic,
government and foreign factors that impact the level of unemployment in the nation. The factors
may be categorized as structural "related to underlying economic characteristics" or cyclical
"related to the business cycle." The monthly reports of United States jobs is provided by bother
the private and government sources so as to estimate the level of people not employed in the
nation. The rate of employment t in the United States fell from 3.8% last year to 3.6% in April
this year. Since 1969, this is the lowest rate of unemployed people in the nation as the number of
jobless people decreased by 387,000 to 5.8 million. In addition, employment reduced by 103,000
to 156.6 M. In the United States, the rate of unemployment averaged to 5.75% from 1948 up to
2019. As a result of the low employment rate in the United States, companies find it very
difficult to employ workers at a reasonable wage hence affecting the businesses. In addition, the
low rate of unemployment in the United States indicates that competition for jobs is less because
most of the people have jobs (David 2012).

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Figure: The rate of unemployment in the US
Source: https://tradingeconomics.com/united-states/unemployment-rate
3.4. Average wage rate
Wage refers to the monetary remuneration that is computed on a daily, hairy, weekly or any
piece of work. Economies indicate that wage is determined by the forces of demand and supply.
In the United States, the wages raised to US$23.31 per hour in April from US$ 23.24 per hour in
March this year. It is indicated that wages in US averaged US$11.22 per hour from 1964 up to
2019 reaching to US$ 23.31 per hour in April 2019. Considering the statistics of "Bureau of
labor statistics (BLS)", the medium wage that is paid to workers in the US is the 1st quarter of

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this year was US$905 every week or US$47,060 every year for forty-hour workweek (Stockman,
& David 2011). The wages rates in the United States were 2.7 percent higher as compared to the
previous year. However, wages in the United States vary according to both location and
occupation. In addition, what is regarded as a good wage in a given location may not exist
somewhere else. For example, employees who worked in management, professional and other
related jobs in the United States earned an average wage of US$66,820 every year, whereas
those were working in service occupations were in the position to earn an average wage of
US$30.524 per year. In the United States, jobs which are located in big metropolitan cities with
higher standards of living also tend to be with higher wages as compared to those in rural areas.
In the 1st quarter of this year, women earned only US$41,912 while men earned US$52,208.
This indicates that men in the United States earn highly as compared to women. Considering the
wage statistics of the United States, they indicate that any entrepreneur is supposed to consider
the location of his or her business to determine the wage rate or sex, profession and age ( Barlett,
& Paul 2012).
Figure: Average wage rate of United States

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Source: https://fred.stlouisfed.org/tags/series?
3.5. Economic growth
The United States experienced a growth in its economy by 3.2% in the 1st quarter of this year.
This was a higher increasing which followed a 2.2% increase in the last three months. The
economic growth of the United States was majorly fostered by "private inventory investment"
local and state government spending, exports, "personal consumption expenditure", and
"nonresidential fixed investment." The Gross Domestic product rate of the US grew by an
average of 3.22 from 1947 up to 2019. This indicated a higher growth of the Gross Domestic
product. Since 1950, the United States has experienced a higher economic growth rate as
compared to Australia with an average of 0.85% since 1959 up to date (Feldstein, & Martin
2011).
Figure: The rate of GDP growth of US
2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017
-4
-3
-2
-1
0
1
2
3
4
5
GDP growth (%)
UNITED STATES Australia

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Source: https://data.worldbank.org/indicator/NY.GDP.MKTP.KD.ZG?locations=IL-OE-DE-US
3.6. Real Interest rate
Interest rate refers to the price of interest that is due according to a given period as part of the
borrowed or deposited money and amount lent. The sum of the interest rate of a given amount
borrowed or lent is determined by the rate of interest, principal sum, and the period, over which
the money is lent, borrowed or deposited. In simple terms, an interest rate is referred to as a
proportion of money that is lent and the lender charges it as an interest to an individual who
borrowed it. The interest of a country depend on various factors such as the demand and supply
of goods in the market, the rate of collateral, the level of investment maturity, and the directive
of the government. Example of Interest rate includes; if the company borrows capital from any
financial institution to buy business assets, the financial institution (bank) charges an interest to
the company. In an economy, various interest rates coexist that reflect the competitive
conditions, the terms regulating deposits and loans, the variation in the status and position of
debtors and creditors. Also, real interest rates are regulated by administrative or regulation fiat.
While making an investment in a given country entrepreneurs need to consider the interest rate
as a major factor. Interest rates are considered to be good indicator of risk. Lower interest rate
indicates higher chances of paying a debt by the borrower. However, high interest rate limits
investment making the relation between investment and real interest rate to be negative. In 2016,
the real interest rate of the United States was at 2.208 percent. This recorded a rise in the real
interest rate to 2.152 percent per Annam for 2015. In 2016, the real interest rate of the United
States was reported to be 2.21%. On the other hand, Australia's interest rate was reported to be at
5.8588 percent in 2016 in accordance to the data variables of World Bank. This indicates that

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Australia had a higher interest rate in 2016 as compared to the United States (Krugman, & Paul
2011).
Figure: Interest rates
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
0 100 200 300 400 500 600
Interest rate payments
Australia UNITED STATES
Source: https://data.worldbank.org/indicator/GC.XPN.INTP.CN?
end=2017&locations=AU&start=2007
3.7. Government expenditure in the economy
The government of United States spends in money on various sectors such as social security,
Medicare, defense, Cabinet department and agencies such as exchange commission, and
securities. The United States Treasury is the one concerned with dividing federal spending of the
nation into major three groups that is to say, discretionary spending, interest rate on debt and
mandatory spending. In the United States, discretionary and Mandatory spending covers up to 90
percent of the government spending. During 2018, the United States’ federal government

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expenditure was US$4.11 trillion. Government's expenditure raised for all key categories driven
by the higher expenditure on social security. Also, the government of United States spent a
higher net interest rate on defense and debt. As a result of increased government expenditure, the
country's Gross Domestic Product reduced from 20.7 percent Gross Domestic Product to 20.3
percent GDP which was equivalent to the average of 50 years. During the financial year 2017,
the United States Federal government’s expenditure was US$3.98 trillion (Jaikumar, & Arjun
2011).
Figure: Government expenditure on consumption (%GDP)
2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017
0
2
4
6
8
10
12
14
16
18
20
Government expenditure (% GDP)
UNITED STATES Australia
Year
%GDP
Source:https://data.worldbank.org/indicator/NE.CON.GOVT.ZS?
end=2017&locations=AU&start=2007
Explanation: The graph above indicates that Australia’s GDP expenditure was high as compared
to that of US from 2007 to 2017

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3.8. Taxation policy in the United States
The United States taxation policy is made up of both state and federal level. In the Nation, there
are various categories of taxes that is to say; capital gains, sales, income tax, and many others. In
the United States, state and federal taxes are different from each other where every tax has a
separate authority of charging taxes. In this case, federal government tax does not possess any
right of interfering with "state taxation." For the purpose of this report we shall make a review of
two types of tax in the United States that is to say income tax and sales tax (Hoffman, & William
2013).
Income tax
In the United States, a tax on income is considered as the major way of taxation. In the United
States, all people who earn income evidence a deduction on their paycheck. All people who earn
income in the United States are required to pay an "income tax" on state and federal level.
Federal taxes in the United States include FICA and social security. For every state, it has a
different charge for income tax that people are supposed to pay (Pratt, et al 2013).
Sales Tax
In the United States, a sales Tax is another form of a tax that people are supposed to pay. A sales
tax is known as a tax that is charged on the purchases of people for example if you buy bread.
This is a state tax that depends on a given state. For example, the sales Tax of New York is 7
percent; Albany is 8 percentandSydney is only 7 percent. In the state, municipalities possess a
right of raising the "sales tax" beyond the limit of the state. Also, sales tax in the United States
consists of other different rules that is to say the items taxed and those not taxed. For example,
New York state taxes gum but does tax milk.

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Figure: Taxation policy in United States
Source: https://data.worldbank.org/indicator/
Explanation: The graph above indicates the tax policy of United States in percent from 2002 to
2016. The graph indicates that United States the taxation policy of the US contributes highly
towards the GDP of the nation
3.9. Monetary policy
Monetary policy is concerned about the actions taken by a central bank or any other regulatory
board or authority to determine the rate and size of money supply growth. In the United States,
the body in charge of the monetary policy is the "Federal reserve." This body implements the
policy by primarily carrying out operations that impact the interest of the nation within a short
period of time. For this report we shall make a discussion of two major monetary policies of
United States as below; first, Interest rate policy, as a result of the continued expansion and

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strengthening of the economic activities in the United States at a high rate, the Federal Reserve
increased the variation of the proposed range for "federal funds rate" by mid-2018. In addition,
the Federal Reserve increased United States "federal fund rate" to 2-1/2 from 2-1/4 percent in
September and December 2018. As a result of increased concerns in the United States about
trade tensions, and global growth, the Committee of Federal Reserve illustrated that it would be
in the position to monitor finical and global economic developments and also assess their
meaning for such as economic outlook (Whittenberg et al 2013).
Second, balance sheet policy, in the United states, the federal Reserve Committee went on
implementing the normalization program of the "balance sheet" that was proposed in October
2017. In this case, the Federal Reserve was in the position to cut down its agency securities and
Treasury holdings the predictable and gradual manner by only reinvesting principle payments
received from the securities that were above slowly by slowly hence rising caps. The total assets
of the FR reduced by US$260 billion leading to an average of US$ 4 trillion by mid-2018
(Stieglitz 2010).
3.10. Effects of the Global Financial Crisis (GFC) in the United States
In the United States, the Global crisis had a bigger impact on the people in the Nation. As a
result of the Global Crisis, the poor people in the United States have been marginalized in the
political process of the Nation. In the United States, the financial Crisis resulted into severe or
depression recession. Now for a while, the United States has not experienced any financial crisis.
As a result of the economic crisis, the demand for goods in the US declined due to various
factors during 2008 and 2009. In addition, the economic crisis led to a major decline in stock and
housing value which are considered as the two major wealth classes that the people of United

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States depend on. This created fear on the economy of the nation leading to a decline in the
overall investment. In United States, the financial crisis resulted into unemployment where
8.5%v of the people in 2009 were jobless. This is believed to be the highest percentage of
unemployment since the Federal Reserve was under "Paul Volker" in 1980. In addition, the
financial crisis led to the decline in the value of houses. This indicates that very many people in
the United States lost hope in their own houses. Therefore, some people in the United States lost
their ownership of houses. The rate of poverty also increased in the United States as a result of
the finical crisis in 2007. Before, the financial crisis, at least most of the people in the United
States were rich but as a result of the financial crisis, the poverty rate in the nation increased up
to 10 million from 7.5 million. Therefore, financial crisis affected very many people in the
United States leading to increased income inequality (Wheatley et al2010).
4. Conclusion and Recommendation
Basically, this report was aimed at discussing and analyzing the microeconomic factors that can
influence a company to invest in the United States. Investing in United States is a best idea that
every company should consider. Despite some challenges and limitation in starting up a business
in the United States, companies can be in the position to effectively conduct their business in the
areas and earn increased income. As compared to United States, staring a business in Australia is
very simple because it requires few steps for registering a business. For any technology related
business, United States is considered as a strong economy globally with Gross Domestic Product
per capita of US$ 57,300. In addition, forms in the United States are near or at the forefront of
advancement in technology most in computers, military equipment’s and many others. As a
result of the high score of 72.1% in the trade borders, the United States is good for any investor
(Wheatley, et al 2010).

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Considering the various macroeconomic factors in the United States, the CEO of Primus
Telecommunications is recommended to invest in such a nation. The decision made is a result of
the high economic growth of the nation, reduced inflation rate, favorable taxation policy and
many other factors. In the United States, business enjoys high levels of flexibility as compared to
Australia in the decision to develop their products and capital plant. Therefore, the CEO of
Primus Telecommunications should focus on investing in the United States so as to enjoy
increases financial benefits (Stiglitz 2010).

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