DISCUSSION QUESTION 1-2

MB609 Capstone: Case and Industry Analysis

Lesson 1: An Overview of Small Business Economics

Upon completion of the Required Readings, write a thorough, well-planned narrative answer to the following discussion question. Rely on your Required Readings and the Lecture and Research Update for specific information to answer the discussion question, but turn to your original thoughts when asked to apply, evaluate, analyze, or synthesize the information. Your Discussion Question response should be both grammatically and mechanically correct, and formatted in the same fashion as the question itself. If there is a Part A, your response should identify a Part A, etc. In addition, you must appropriately cite all resources used in your responses and document in a bibliography using APA style.

Discussion Question 2 (50 points)

Having successfully brought a new product to market, you are now ready to take your company public. Discuss how each of the following economic indicators may affect the environment for the launching of your initial public offering (IPO). Overall, how soon should you launch a public offering given the cyclic nature of the economy? (50 points) (A 2-page response is required.)

1. Nominal Gross Domestic Product (NGDP): The nominal gross domestic product is increasing at the rate of 2.6% annually, while the Real Gross National Product (RGNP) is rising only 2.3%.

2. Consumer Price Index (CPI): The Consumer Price Index has been rising at a fraction of a percent per quarter for each of the last four (4) quarters.

3. Discount Rate: The Federal Reserve has announced a reduction in the discount rate of 0.5% and hinted that further cuts may be forthcoming.

4. Unemployment Rate: The rate of unemployment is holding steady, although the rate of new claims is declining somewhat.