US Trade Deficit

Explain what the US Trade Deficit is. Why did it go down in December 2007? What does the value of the US dollar have to do with the trade deficit falling? Why do you think that a large trade deficit is bad for the economy? In other words: why is it bad to import more goods than you export?
The U.S. Trade Deficit is the number of imported goods over exported goods. This has to be kept at a state of equilibrium because if imports surpass exports than, in a sense, the U.S. is losing money. You pay to import, but you get paid when exporting. When importing surpasses exporting we face a deficit, and surplus when exports proceed imports. During December of 2007 the U.S. faced a deficit because imports exceeded exports by nearly $58 billion. The value of the U.S. dollar also has importance here because when the value is down, this attracts foreign buyers to buy American products for cheap, subsequently if the dollar value is high, than buyers tend to stay away or there is a limit gap. Therefore, with more buyers prowling America for products, there were more exports and the U.S. was making money. A large enough trade deficit is bad for the economy because that is one way how it can go bankrupt and put the economy in a crisis. That is why it is better to export more than import, that way a country can gain surplus and not have to worry about deficit.

Opportunity Costs

In your own words, explain what economists mean when they talk about opportunity costs. What are opportunity costs? Give some examples. And give some examples from your own life.

An opportunity cost is quite simple to understand. It is something that is given up for something else. In the topic of economics, an opportunity cost is applied dead on within the stock market. You are taking your chances on a certain stock over others, and not knowing what the circumstances might be. Maybe a stock you buy goes down, and the stock you thought of buying goes up. An opportunity cost to me is a gamble between time and money most of the time. Of course, the ideology of opportunity costs can be applied to everyday life, such as cutting a class to hang out with friends, or going to class and getting the most out of it for your future. End college with a bachelor's or continue studying for a better degree. Even something as simple as buying an Xbox 360 or a Playstation 3. Everything has its positives and its negatives, chances that you take when choosing one thing over another.

My Investment Strategy

Why did you pick the stocks that you did?

Everyone has their own stock picks and entitled to their opinions as to why they chose those certain companies they wish to essentially be "a part" of. Well My choices I am going to be sticking to are Amazon(AMZN), Apple (AAPL), Google (GOOG), IBM, and Yahoo! Inc (YHOO). The reason I chose these specific stocks is due to the fact that these stocks usually remain stable, if anything else, go up. Of course there are times of fluctuation where their values will heavily drop, but they pick up rather quick because these are major businesses, corporations, etc., that are relied upon the most. Overall, they have a significant popularity factor that can semi-guarantee a route toward success and is why I chose them. A perfect example would be with the Google stock. It is establishing itself as a powerhouse corporation, and has a high stock value. So due to it's popularity, its value will increase, but if there is a decrease, it won't be for long, but it will be quite a loss in profit. But as expected, it will surely pick itself back up. Same as for the other stocks I chose.