Fluent Essays

Respond to two or more of your colleagues in one or more of the following ways:~ Provide additional insight into the macroeconomic factors discussed by your colleagues as affecting interest rates.Offer advice regarding the use of short- or long-term financing in the industries discussed by your peers. Be sure to explain the rationale behind your advice. karri_brown_discussion_week_3.docx lacresha_blue___discussion_week_3.docx Unformatted Attachment Preview Karri Brown RE: Discussion - Week 3 Two Macroeconomic Factors Influencing Interest Rates and their Effects One macroeconomic factor that influences interest rates is the Federal Reserve policy. The Federal Reserve stimulates the economy by increasing the supply of money, which causing short-term rates to fall and long-term rates to raise with the promise of increased inflation due to the increased money supply (Brigham & Houston, 2019). We are experiencing a similar situation right now with so much unemployment and the government offering stimulus checks in hopes to stimulate the economy. Another macroeconomic factor is the federal budget deficit. The higher the budget deficit, the higher the interest rates because of more demand for money Brigham & Houston, 2019). We have experienced a budget deficit for many years now, and with our current situation leading us into another grand recession, I would expect to see rates increase again. Macroeconomic Factors Impacting My Industry In my current healthcare organization, we are most sensitive to the budget deficits that are driving up interest rates and inflation. When interest rates and inflation increase, this impacts the health of our patients as their finances are negatively impacted. One of the biggest concerns is the mental health of our communities. In a study on macroeconomic determinants of health, suicide risk was a key indicator as people carry the extra burden and anxiety about how to pay their bills and put food on the table for their families (Naik, et al., 2017). In addition to mental health, other health outcomes are in jeopardy as people often need to prioritize how they spend their money during times of recession. My organization and the healthcare industry in general are currently experiencing this situation. COVID-19 is a key contributor, but we have been experiencing the impacts of the federal budget deficit for quite some time. Two Contemporary Factors Impacting My Industry and Their Impacts on Interest Rates One contemporary factor impacting healthcare currently is the COVID-19 pandemic and the increasing recession it is causing. The government is trying to stimulate the economy due to most workers losing their jobs because of stay-at-home orders. The demand for money is high, which should cause interest rates to rise as well as inflation due to the increase in money supply (Brigham & Houston, 2019). Not only is healthcare impacted by the influx of sick patients seeking care and the hospitals losing money because of the halt of all elective procedures and surgeries but there is added burden on the general population who have lost their incomes. Now, the economy is being stimulating and the deficit is increasing, which means interest rates will rise again creating more issues for the healthcare industry and the public. Another contemporary factor is the Affordable Care Act. Hospitals saw a reduction in rates on hospital municipal bonds (McGrail, 2019). Hospitals were able to invest more capital because of this savings. Being able to invest more means hospitals can make improvements to help mitigate health disparities and improve health outcomes. One of the things this allowed my organization to invest in was improving our electronic health record and virtual platform. This gave patients immediate access to vital tools and resources to help them manage their healthcare and make better decisions regarding their care. References Brigham, E. F., & Houston, J. F. (2019). Fundamentals of financial management (15th ed.). Cengage Learning. McGrail, S. (2019, October 25). Hospitals saw lower interest rates after Affordable Care Act. Revcycle Intelligence. https://revcycleintelligence.com/news/hospitals-saw-lowerinterest-rates-after-affordable-care-act Naik, Y., Baker, P., Walker, I., Tillmann, T., Bash, K., Quantz, D., Hillier-Brown, F., & Bambra, C. (2017). The macro-economic determinants of health and health inequalities-umbrella review protocol. Systematic Reviews, 6(1), 222. https://doi.org/10.1186/s13643-0170616-2 LaCresha Blue RE: Discussion - Week 3 Two economic factors that influence interest rates in general can be the overall policy of the Federal Reserve and International Investing. According Brigham & Houston (2019) if the Federal Reserve increases the amount of money put into circulation in the US, it could lead an increase of anticipated inflation thereby causing long term rates rise. And in many cases the mere thought of short term rates wouldn’t necessarily cause long term rates to decrease, in fact this could result in foreign investors to sell their bonds to collect immediate cash which they could in turn by currency in their own countries thereby lowering the value of the dollar. The second factor which could influence interest rates would be a twofold congruent.The US importing more than it exported causing the US Federal Reserve to running into a federal deficit, borrowing money from countries which are already rich in export surpluses. And the flip side of this congruent, borrowing from other countries does not allow for the FRS to use monetary policy to control economic activity in the US. As an educator, the two factors in this industry which seem to be the most sensitive can be the response to an unintended natural disaster, such as a hurricane, and or a global pandemic such as now, school’s mismanaging funds or excessive law suits brought against the local school district. For example, our local school districts allocates a budgetary allowances according to the number of students per year per school. This formula is based on attendance during two periods; once in October; the second in February. Prior to that, principals attend 2-3 budget conferences prior to the beginning of the fiscal year in June. Because of these budgetary measures, it’s pretty hard for public schools to go into what is commonly referred to as in the “Red”. In the Red means over budget and now money has to come from in some instances, from another school’s budget. Another factor, would be impeding lawsuits or messy claims filled against employees which now have to go before the board for approval. The easiest cases based on my observation are the ones that don’t require any extensive investigation, but the costly ones are the issues where employees have been on administrative leave for years and then have to be compensated for retro pay. With regards to contemporary factors impacting the teaching industry, insurance rates seem to be impacted teacher salaries. Although, we’ve had a raise in the past decade or so, current inflation compounded by insurance hikes has eroded the little extra in most people’s primary job. Now, the lucky few have also a secondary, which may be teaching Adult Education, but now you’re moving into another tax bracket which in the long run can cause you to owe money, work longer hours throughout the day, but now the bigger check has a greater deduction. Not a typical catalyst for intrest rate, but in public education the profit is not monetary. But what may be beneficial to the district is when we are given a raise in recent years, instead of giving us the money, they have held on to it for a couple of pay periods to collect interest on it. All the best, LaCresha Reference Brigham, E. F., & Houston, J. F. (2019). Fundamentals of financial management (15th ed.). Boston, MA: Cengage Learning. ... Purchase answer to see full attachment