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He opposed the thoughts of Keynes based on previous predictions which proved false in the future. The war affected different sectors of Germany. Germany saw its steel output increase by around 30% and iron output increase by 38% from 1913 to 1927, contrary to Keynes prediction that it would decrease. Germany's efficiency in mining coal was also predicted to decrease, which proved wrong when the efficiency of labor increased by almost 30% from 1913 to 1929. It was also predicted that German coal exports would stop right after the treaty. However it showed a consistent increase to 15 million tons in the year following the treaty and rose up to 35 million tons in 1925. In a similar fashion, the German savings figure, which was expected to decline showed a steady increase. Mantoux demonstrated how Germany was in a position to pay according to the terms of the treaty, given…… [Read More]
(Thomas, 1999, p. 66)
The four aspects of health profiling are; 1.collecting and analysing information2. selecting priorities for action 3. choosing nursing activities, including methods of working, for selected priorities 4. evaluating nursing practice. Information, should be gathered base on regional demographics of disease such as; incidence of disease, illness, diasbilty and trauma and on the existing health system and what it provides and does not provide for the community based on its defined and identified needs.
Once information has been gathered it can be analysed to identify and select priorities. Priorities can be aimed at individuals, at a group or community level, or at a national and/or local campaign level. Appropriate nursing activities can then be chosen to pursue appropriate action....The following presents a summary of suggestions for key activities: 1. assess the health needs of local populations through compilation of health profiles 2. support people to participate in…… [Read More]
Economic Reform in Russia
Since 1992, Russia has undergone a complex process of economic transition. It is a process that has been made more difficult due to the lack of theoretical and practical guidelines on the problem of transforming a communist command economy into an open capitalist one. All the existing theories on such a transformation tended to focus on the reform of rural subsistence economies, rather than on an industrially developed one, such as Russia. Yet, despite the absence of an effective economic blueprint, the state of the Russian economy, at that time, was such that the Yeltsin government was required to take action quickly, in order to save the country from economic ruin.
However, the radical reforms which were introduced in January 1992, and were termed 'shock therapy', did not prove to be successful and, rather than encouraging the growth of a market economy, they produced an awkward…… [Read More]
economics problems from a broader perspective, we need to apply macroeconomic principles. These principles help in understanding collective problems that various industry or countries are encountering and the role government can play in this connection. The paper studies current economic problems in the Transportation sector and explains how levels of supply and demand affect the demand curve.
MACOECONOMICS AND TANSPOTATION SECTO
Macroeconomics deals with economy on a larger scale and studies the principles of economics as they pertain to the whole industry and not just one firm. This helps in understanding national economic problems of inflation, unemployment, slow GDP growth, lower productivity etc. Therefore it is important to apply macroeconomics principles when we want to study and understand the problems being encountered by any economic system. For example in these days of slow growth, we notice that United States economic problems can be better understood in the light of macroeconomics…… [Read More]
The economic environment of Greece is that of a capitalist economy, but with significant public sector contribution – about 40% of total GDP is from government activity. This speaks more to the relatively small size of the Greek private sector than to excessive government ownership of industry. Tourism is one of the major drivers of the Greek economy, accounting for 18% of GDP (CIA World Factbook, 2017). Thus Greece would be characterized as a mixed economy with some government-owned entities. Greece is a member of the EU, but has also received several bailouts in recent years, and struggles with tax collection, and overall economic development. Tax evasion ranges between 6-9% of total GDP in Greece, which makes it a significant economic problem (Georgakopoulos, 2016).
Recent Macroeconomic Data
In recent years, Greece\'s economy has flatlined. The country has received several infusions of capital from other EU countries, but there…… [Read More]
An analysis of the latest figures for key economic indicators and the factors which have affected these indicators. This should include the figures for unemployment, inflation and economic growth.
The unemployment rate is a very important indicator of the overall health of the economy. Currently the unemployment rate is at 7.8% (Office for National Statistics, 2012). However, this figure does not affect the population equally. Different segments of the population have different employment rates. Furthermore, the unemployment rate does not include people that are not actively seeking employment. In the chart these people are considered to be "inactive." Another interesting item listed in the report is that the unemployment rate for the youth demographic was falling due to a record number of 16 to 24-year-olds being enrolled in some type of educational program.
Employment in the UK has suffered from recession. In 2008 there was a…… [Read More]
Energy costs increased substantially and the yen's exchange rate was shifted to a floating rate. The eventual recession reduced expectations of future growth and reduced private investment. Economic growth went down from 10% to 3.6% during the period 1974-79 and to 4.4% in the decade of the 80s. ut despite the oil crisis and its consequences, Japan's major export industries stayed competitive through its cost-cutting policy and increasing efficiency. It reduced industrial energy demands and allowed the automobile industry, along with other industries, to improve. y the late 70s, the computer, semiconductor and other technology and information-intensive industries entered a period of rapid growth. During this high-growth era, exports continued to support Japan's robust economic growth in the 70s and in the 80s. However, the problems encountered on account of its growing balance of payments surplus urged for the opening of domestic markets and a stronger focus on domestic demands…… [Read More]
Producers do not want to produce too much, lest there be waste. Consumers do not want to spend too much, because their resources (for most people anyway) are inherently scarce.
Hayek makes the point about there being different types of knowledge. In his free market economy free from centralized planning, he argues that each individual has different knowledge -- each specializes. This allows the millions of people who are making economic decisions to have the ability to gather and process as much information as possible. ith more information, better decisions are made. By delegating decision-making to millions of economic actors, each operating within their own specific area of expertise, decisions are going to be better. They will be based on more information and more specialized knowledge to interpret that information.
He argues that economic planning inherently must be based on cycles, such that there is day-to-day adjustments. Such a situation…… [Read More]
Economic Events: 1980-1989
the decade of greed. The era of onald eagan when the rich got richer and the poor got poorer. Despite this common wisdom, 1980 started off auspiciously. On May 8, 1980 the World Health Organization hailed "one of the century's greatest medical accomplishments," the final and total eradication of smallpox (Dickson 247). But how quickly times change - barely a quarter century has passed and this same disease is making headlines once again.
Attitudes change also. While many in this day and age would still agree that the 1980's was a selfish period in American history, a sea-change has occurred in the rhetoric issuing forth from Washington D.C. In a very fundamental way, party politics has been thrust aside as concerns for homeland security take precedence over petty partisanship. Michael Barone notes this in his analysis of a speech made by Democrat ichard Gephardt in the Summer…… [Read More]
Interestingly, it seems that this feature remains relatively constant regardless of the level of the socioeconomic spectrum. That is fascinating to anybody who comes from a foreign community where Americans are envied and believed to be so much more fortunate than many of us in the rest of the world.
Finally, in that regard, I also anticipate that studying the ethical issues and legal concepts that apply to economic practices, including the intersection between the private business sectors and government. From my perspective, it seems that there are many potential areas of study just in the manner in which the consumerism mentality in the U.S. fueled the housing market bubble and the ways that big business interests profited from those impulses at the macro level while, in effect, destabilizing the entire national economy. Likewise, at the micro level, there is much to learn from the practices of individual lending institutions…… [Read More]
Shift from Central Planning to Market Economy
The Turkish economy is in what might be termed semi-precarious health. It could certainly be worse, but also certainly be better. Since its birth as a nation-state into its current shape in 1923 in the wake of World War I, Turkey has operated a mixed economy, in which both state and private enterprise have contributed to economic development. (Indeed, it is arguable that all country's in the world today have a mixed economy; the United States may be a bastion for private enterprise but many workers also benefit from government money, such as the money awarded by the federal government to private companies in the form of defense industry contracts.) Since the end of World War II, the economy has been transformed from a predominantly agricultural one to one in which industry and services are the most productive and rapidly expanding sectors even…… [Read More]
For the period of the late 1960s and early 1970s, West Germany strived to assist the dollar. The United States and many other nations pushed West Germany to reassess so as to make up for the dollar excess. (Germany in the World Economy)
At last, after escalating waves of conjectures, the retton Woods system had a collapse in August 1971. All through the post-retton Woods period, the deutsche mark stayed under pressure. In order to relieve strain within Europe, West Germany and other European states assented to peg their currencies to a special system of comparatively narrow exchange rate bands officially named the 'European narrow-margins agreement' but unofficially identified as the 'snake'. The United States and West Germany performed main roles in attempting to organize a new global monetary system. but, in spite of its willingness to make small exchange-rate alterations for the benefit of new currency arrangements, West Germany…… [Read More]
It is also argued that the insurance mandate is not constitutional since the government does not have the right to tell the United States citizens what products to purchase, even when these products are beneficial for them, and even less when the socio-economic impact of purchasing the respective items is questionable (Savage, 2009).
Arguments against changing the direction of the policy
Once again delaying any measures to restructure and resolve the two impending problems in the health care system (raising costs and insufficient coverage) does not constitute a constructive approach to resolving the impending problems
Aside the socio-economic problems it raises, the mandatory health insurance would ensure that all the U.S. citizens benefit at least from the basic health care services and this does not put tremendous strains on the federal budgets.
5. ationale of the suggestion to change the direction
Despite the benefits the mandatory health insurance would generate…… [Read More]
assumes the notion that it would be best to have "a system of economic
enterprises collectively owned and democratically governed by all the
people who work in them," meaning that he differs from the notions of Okun
and the Friedman's by proposing something radically different to promote
the ultimate goal of democracy (Dahl 92). Neither equality nor freedom is
necessary to fix the relationship between the economy and democracy, but
rather a completely different and even radical outlook on the relationship
between the economy and government can solve the dilemma. Furthermore Dahl
argues to how it is possible to retain the democratic principle within
firms, and prevent problems such as oligarchy. These notions in which the
economy becomes compatible with the political notions are completely
different than the Friedman's and Okun's notion that there lies a problem
with democracy. Dahl is even casting serious doubt on Tocqueville's long…… [Read More]
4. Jon opens a video-rental store. What factors should he consider in making his decision on what hours to operate each day? What hours would you recommend? Why?
The rule is that every business is different. Jon's video-rental store sells a specific product to a specific customer base; this means that the offer has to be tailored to the needs of the respective market. Elements which should be taken into consideration then include:
The working schedules of the target market
The preferences of the target market in terms of the times they want to watch the movies
The demographics of the target market
A proposed schedule is that of 1 PM opening hours and 12 PM closing hours during the week so that customers can rent their movies on their way from work. During the week-end, the store should be opened in the mornings so that customers can rent their…… [Read More]
These include: the European Union, China, India, and Japan. Clearly, what many Americans perceive to be simply an economic problem in the United States, has far reaching effects around the globe.
Barba, R. "Centra Returns TARP Money." American Banker 173(65) 6 Apr 2009: p. 4. Business Source Complete. EBSCOHost. University of Phoenix, Phoenix, AZ. 27 Apr 2009 .
Crain, K. "It's All About Saving an Industry." Automotive News. 83(6348) 23 Feb 2009: p. 12. Business Source Complete. EBSCOHost. University of Phoenix, Phoenix, AZ. 27 Apr 2009 .
Fajt, M. "Iberiabank to Give TARP Infusion Back." American Banker 174(39) 27 Feb 2009: p. 20. Business Source Complete. EBSCOHost. University of Phoenix, Phoenix, AZ. 27 Apr 2009 .
Marino, J. "Red Planet." The Dealmaker's Journal. 44(4) Apr 2009: p. 38-65. Business Source Complete. EBSCOHost. University of Phoenix, Phoenix, AZ. 27 Apr 2009 .
McGreer, B. & Barba, R. "Here's Your…… [Read More]
Politics and Libertarianism
According to the documentary "Liberty and economics" which focuses on the work of the economist Ludwig von Mises, the free market works in an ideal fashion because consumers can decide what they wish to buy in a free and unfettered manner. Von Mises' thought was heavily shaped by his experiences as a Jew living in Nazi Germany: he saw Nazism, socialism, and communism all as ideologies which attempted to deprive people of the ability to make decisions on their own terms. Von Mises believed that all economic problems were rooted in mismanagement by the government and centralized authority. He was a great advocate of the gold standard as a method of ensuring market independence. Von Mises was extremely unpopular because he condemned both fascism and communism as statism and contrary to liberty: conventional economic liberalism was very unpopular when he was writing and frowned upon as antiquated.…… [Read More]
An economic system is basically described as specific set of principles that addresses the production, distribution, and consumption of products and services. The involved parties in the production, distribution, and consumptions processes are usually determined by or dependent on the economic system. Throughout the history of humanity, different types of economic systems have evolved because different societies have placed varying emphasis on distinctive goals and priorities as part of their efforts to obtain answers to certain economic questions. In addition, the difference in economic systems is fueled by the tendency by different societies to develop very broad economic approaches to manage their resources. One of the main reasons for the development of different economic systems is to address the challenge of scarcity. The challenge of scarcity is an essential problem that confronts individuals and nations. hile there are four major types of economic systems recognized by economists, there…… [Read More]
The economic policy tools that were employed just after the war subsequently underwent some changes. From 1947 to 1950 direct controls on wages and distribution were eliminated followed by removal of trade controls in 1958. However, the government continued to maintain its hold over prices and credit distribution which made it different from many of its neighboring states in the postwar period. The French Ministry of Finance exerted greater control over the economy than the Bank of France. This led to a greater predilection to resort to devaluation when external equilibrium resulted due to the state failure to control incomes. In France, the period between 1945 and 1975 was known as the "thirty glorious years" because of the phenomenal economic performance. During this period, the average growth rate of GDP was around 6.8% which was quite remarkable considering that Britain's average GDP growth rate was 2.4% and Germany's…… [Read More]
Two alternative solutions are available. The first sees that the U.S. federal authority uses the budget allocated to support the development of the national industries, without raising barriers to imports. The second possible solution is for the United States to strive to increase its exports by focusing more on international operations.
Criteria / goals
The evaluation criteria for the proposed solutions revolve around the benefits they generate, as well as the costs they imply. Otherwise put, the decision will be made in accordance with the arguments in favour and against each of the two alternatives, and by the solution's ability to meet the established goals. These goals include the insurance of economic stability within the United States (for all population, corporations and the entire system), the maintenance or even development of international relations, as well as the sustained development of the domestic industries.
Evaluation of alternatives
Pro: does…… [Read More]
Economic Depression of Europe
An economic depression is more severe than a recession due to the fact that a depression involves drastic decline in a national or international economy, characterized by decreasing business activity, falling prices, and high levels of unemployment.
There were economic depressions in Europe that were experienced before and after the 1870 but with a remarkable difference, being that those that were experienced before the 1870s were less costly in terms of life and resources and took relatively lesser period. Indeed it was a commonplace that every part of Europe experienced one sort of economic depression or the other.
One such economic situation before 1870 was the "little ice age" which began in the late 16th century till around 1950s as indicated by Big Site of History (2011). This was a time when a severe cold that could not be withstood by most crops set in most…… [Read More]
Thus, a region or nation experiencing economic depression will be unable to use the interest rate lever to boost the economy. Similarly a country with high inflation will be unable to independently raise interest rates to contain inflation. Moreover, Islamic countries, which form a large part of the geography, do not believe in interest rates.
Political barriers -- Political differences between nations make it extremely difficult for them to adopt a common currency. It can lead to a loss in political sovereignty as monetary interests would need to surpass political interests. This is unlikely to be acceptable to most of the nations and the idea of a single currency may be difficult to implement (Gimp, 2008).
Will Pros and Cons change Over Time? Depending On the Country?
The economic conditions to determine a monetary union depend on: the openness and size of the economy involved to trade; the free movements…… [Read More]
He would be faced with deciding whether he must spend all his available resources on goods or services, or whether he must save some of his income so that he would be able to finance some of his needs of his future. When he is taken as a labor resource, he must make the decision whether he must use his time in working for his pay, or whether he must spend it on sleeping and other leisure time activities. ("Decision making using marginal analysis," n. d.)
Similarly, when he is a labor resource, he must decide how much of his time he must spend on education, so that he may be able to maximize his life earnings. On the other hand, if he were an entrepreneur, then he must make the decision on how many people he must hire, or how much he must spend on acquiring a new product…… [Read More]
Unfortunately most growth oriented economic policies such as "supply-side" economic policies tend to exacerbate inequality. A greater role of the government in the economy such as increased taxation on the rich can reduce inequality. Inflation and unemployment are usually inversely proportional in most economies, i.e., increase of money supply through deficit financing reduces unemployment but increases inflation while tight monetary policies reduce inflation but increase unemployment. According to a number of analysts, a major cause of terrorism in the world is an acute sense of deprivation among a large section of the population. Economic measures can, arguably prove more effective in rooting out terrorism than military action.
What, How and for Whom to Produce:
In 'free market economies' decentralized decision making by individuals and firms based on consumers' desires (which determine the price of goods) and the profit motive determine what goods are produced and in what quantities.…… [Read More]
Economic Challenges Canada Faces
In recent years, the challenging economic condition in Canada has emerged as a concern for citizens, policy makers and the government alike. Canada faces challenges in terms of creating a more innovative society, as the country continues to experience a significant productivity gap compared to other advanced industrial economies. The Canadian industry appears to be slower in successfully developing, applying and marketing innovative products, processes and services than a majority of other nations. This lack of innovation is the cause of Canada's low productivity growth and competitiveness, and therefore must be addressed in order to increase employment growth, a higher standard of living and an improved quality of life for all Canadians.
Current research predicts that although Canada's economic performance will gradually strengthen out of the recent mild slowdown into a better pattern of growth in 2004, Canada's economy still faces the longer-term challenge of increasing…… [Read More]
Economics impacts on many areas of life subsequently it will impact on many areas of professional life. eflecting on the lessons learned, including the knowledge and skills gained, the real value is in the way that economics concepts can be applied to the real world; not only to explain event that are seen in the macro-environment, but to guide the way personal decisions will be made with that knowledge.
The first indicator of the lessons and concepts taught in the class being absorbed and developing into transferable knowledge has emerged with an increased understanding of the way that the economy operates and the influences which are present in the economy that are driving up prices.
There are many examples of the economic concepts; one example is the way that supply and demand has impacted on oil prices which has had a knock on effect in the economy as…… [Read More]
Economic Crisis 2008-2009
This report focuses on the events that took place in the Great crash of 2008-2009. It aims to highlight the events that took place and what the basic factors and events were that eventually led to the economy crashing. It is also a point of focus to determine what effects came about and how different parties were to be blamed for the deregulation that led to the catastrophic events of the crash. It is linked with the policies present at that time i.e. The Monetary Policies outlining the control of money supply and interest rates as well as the Fiscal Policy that focus on the government spending and taxation policies.
The financial crisis refers to a situation whereby there is a contraction of money supply and the amount of wealth in the economy. This is also known as a "credit crunch" whereby participants of the economy lose…… [Read More]
Economic Value Added (EVA) Accounting Practice
Although Economic Value Added (EVA) is not a new concept in economics and financial theory and is based on the 19th century concept of "economic profit," it has only been widely adopted recently by business firms as an accounting practice. In this paper we shall describe what EVA is, and look at its pros and cons from the point-of-view of the company adopting the practice and the investors. We shall also discuss how EVA differs from some other emerging accounting practices and the major issues relating to EVA as compared to other commonly used accounting principles. Finally, the possible problems and opportunities that a company adopting EVA principles can face shall be examined.
What is Economic Value Added (EVA)?
Economic Value Added (EVA) is the after-tax cash flow generated by a business minus the cost of the capital it has invested to generate that…… [Read More]
A negative consequence, however, would be increased volatility in the value of the dollar. Imports would become more expensive as well, increasing inflation and potentially compelling the restructuring of the economy. Increased currency risk -- transaction and translation -- would also create difficulties for U.S. companies operating abroad. I do not support such a proposal. Attempts to jury-rig a global currency are as impractical as enforcing Esperanto as a global language. Such a currency would be inherently unstable, as the Euro example has shown us. The constituent communities would be committed to enforcing controls on each other in order to maintain the integrity of the currency. If at some point the currency of another economy overtakes that of the U.S., it will be because that economy is stronger, larger and more stable -- fundamental market forces -- rather than as the result of a political decision.
3. a) The Fed…… [Read More]
Sorkin's book does a good job of giving the details on what happened among Lehman Brothers, Barclays, JP Morgan, Goldman Sachs, the Fed, and Big Gov following the collapse. Essentially, everyone had egg on his face -- but some of the bigger powers had the muscle to save face -- and sink competitors at the same time: which is exactly what Goldman Sachs did to Lehman. Goldman had been placing its cronies in the hite House for years -- and it would now go through the hite House to see who got bailed out and who did not. AIG got one -- because it owed a large chunk to Goldman (who had figured out the game ahead of time and started betting against itself by buying insurance through AIG). Sorkin's work is a work full of the kind of details that other writer's like Taibbi and Lewis do not take…… [Read More]
Economic crash can be viewed from a number of perspectives ranging from causes and effects to the 2008 Crash's resemblance to the Crash of 1929, which began the Great Depression. This paper will consider the 2008 recession from the standpoint of the financial banking industry, which, according to economic journalists like Matt Taibbi (2010), played a major and significant role in the crumbling of the nation's economy -- just like it did in the Lawless Decade also known as the oaring Twenties.
Big Banking Meets Big Government
What has now become known as the Era of De-egulation actually had its beginnings in the 80s decade known just as much for its rampant excess as the early 20s were known for their unbridled lawlessness. Yet, while the latter enjoyed the snubs-to-the-law bootlegging speakeasies, the former enjoyed the merging of the financial sector with the political -- which began during eagan's tenure…… [Read More]
First and foremost, I intend to major in Economics. From quite an early age, I have grown up admiring successful business leaders. I envisaged such individuals as living relatively fulfilling lives based on the wealth they had amassed from investments. One of my main personal heroes in business and investments has always been Benjamin Graham, an astute investor and economist who passed on in 1976. Graham who in my opinion remains one of the most rational investors of all time came up with some of the most priceless yet simple investment principles. Having developed a keen interest in the investments field at an early age, I have been an avid reader of any available literature on Ben Graham. Based on these readings, I remain convinced that to make sound investment decisions; the need for a well-founded understanding of economics cannot be overstated. Further, over time, I have come…… [Read More]
The national unemployment average was 7,591,000 in 2005. Therefore, an addition of 8,500 people would represent a.11% change in unemployment. Factor in additional domestic job losses from the closing of that company, and it is very possible that the closing of Pratt & Whitney would be enough to cause a reversal in the current trend, which is a decline in unemployment rates.
Connecticut's unemployment compensation would experience the most immediate and dramatic impact. For example, if all of Pratt & Whitney's employees are entitled to full unemployment benefits, then the first unemployment cycle for those employees would result in over $4 million in unemployment benefit payments. If all of those employees remain eligible for unemployment for the full benefit period, those payments would total over $104 million. Those estimates may be high, because not all employees would qualify for the full benefit payment or for the entire benefit period. In…… [Read More]
The nation will enforce law and order to protect its public property, regulate monetary frameworks and correct market failures. The government will be responsible for protecting private life of its citizens and property (Grant & Vidler, 2000).
Market and Competition Forces: the country's economy should be designed in such a way that it will promote competition. This is because competition means a fair deal in obtaining results. The government should increase sellers and buyers in the market because this would promote competition thus increasing the quality and efficiency. With competition, the country will be able to control and manage different functions of its economy (Grant & Vidler, 2000). Demand and supply are the prime market forces determining the production of a country produces and the suitable ways to do so.
Market equilibrium, price and output, are determined by market forces. Therefore, I would recommend that any least developed nation to…… [Read More]
00). This is below the EU, where they have a rating of 42 or a PPP of $32,500.00. (Czech epublic 2010) 1 When you compare the two numbers, the purchasing power is lower in the Czech epublic in comparison with the EU. This means, that labor costs are much lower in relation to the rest of Europe. When you put this together with the increases in the GDP over the last two quarters and the fact that the banking sector, was undamaged from the financial crisis; means the Czech epublic has outstanding opportunities for addressing the needs of the company. As the country's costs, the business friendly atmosphere and prudent practices of government policies are creating the ideal environment for a European call center to flourish.
Despite the obvious advantages, there are risks of relocating to the Czech epublic the most notable would include: the underlying cost structure. While…… [Read More]
When debt becomes a multiple of GDP, then responsible government is not being undertaken.
16- 3) a. The equilibrium is .016 dollars per peso.
b. If the Philippine government set the exchange rate at 50 peso, they would need to sell 20 pesos per month, because supply would be 60 and demand would be 80.
16-7) a) A country would want an overvalued currency if they were a net importer of goods. This would make foreign goods cheaper. The policy would cause harm to that country's exporters.
b) A country would want an undervalued currency in order to facilitate exports. This would cause harm to importers, other countries who want to sell their goods in that market, and to their own citizens traveling abroad.
16-9) a) The exchange rate would be the equilibrium point. In this case, $0.90 dollars per euro.
b) If there is no intervention, the new equilibrium…… [Read More]
In order to understand this idea about inventories, it is necessary to understand that if the prices were to change and not be rigid, then it would be the prices and not the inventories that would guide companies in their decisions about production. For example, if prices were increasing, a company would know that their product is popular and that they should increase the production of it. And if the prices were decreasing, the company would know that their product is not selling well and that they should probably reduce its production. In an economy though where the prices are fixed, companies need another way of deciding whether they should increase or decrease production. This is where Keynes came to the conclusion that the key is to observe the changes in the inventories in order to drive production (hat Causes a Recession to be a Recession, n.d.).
Over the…… [Read More]
e. no standardization) b) Diamonds: good medium of exchange
Peaches: perishable, differences in quality (i.e. no standardization) d) Grade a Honey: differences in quality (i.e. no standardization), difficult to transport e) Ice in a warm climate: perishable, difficult to store a. Over the long run, what is the primary determinant of the price level? Supply and demand, with price acting as an equilibrator b. Over the long run, what is the primary determinant of inflation?
The supply of money as compared to changes in productivity.
c. How is inflation related to the nominal interest rate?
Expectations of future inflation are one of the key factors in determining the nominal interest rate, the other being the 'core' interest rate, or the inflation-free level at which one is willing to lend money (which differs according to the issuer and associated risk premium).
4. Describe each of the following financial institutions. If it…… [Read More]
That is, international financial organizations, such as the World Bank and the International Monetary Fund and which controlled by core states, decide that, in order to grant financial aid to undeveloped countries, these states should comply with some rules that are, in the end, in the detriment of their own economy. For example, Africa pays more to the IMF and World Bank, than it collects in credit from them, and this leads to low living standards, poor education and health systems and undeveloped infrastructure.
Besides financial institutions, transnational corporations have a saying in the economic development of a country. Although one might be tempted to say that a corporation, by creating a branch in an undeveloped country gives that economy a boom, it is actually all about personal gain.
Working in a corporation might be considered the best thing that could happen to a person, on a professional scale. You…… [Read More]
A price discrimination strategy is one where different customers are charged different amounts. The price charged for my shop's submarine sandwiches will therefore be different for locals than for visitors. There are a number of ways to achieve this. In the context of a sandwich shop, the prices are going to be listed publicly on the menu, so it is impossible to openly discriminate with respect to prices. One technique that can be utilized to lower the average cost for each sub-for locals is to offer a loyalty card. The local would then receive either a discount or a free sub-after making enough purchases. This would deliver a lower price to locals in the long run. Alternately, a loyalty club can allow the locals to receive discounts if they are members of the club. A certain amount of annual sales would be required for club membership, or even a…… [Read More]
the country aims for the working population that had been estimated to be 125 million in 2006 to reach 147.8 million by 2020 (Economy watch, 2010).
elationship between unemployment and Brazil's economy
Unemployment in Brazil directly affects the economy of the country in several ways this include economic costs; rates of unemployment being persistent in Brazil indicate that there will be market failure in the country. Unemployment is an indication that resources are being wasted thus leading to loss of potential output and eventually a reduction in allocative efficiency. Brazil's economy will then be seen to operate below the maximum output that the country has potential of.
Unemployment also affects the economy of Brazil through financial costs. The Government of Brazil and the entire nation suffers some costs due to unemployment. There are some benefits that the government has to pay the unemployed and therefore the higher the rates of…… [Read More]
12-3) the following reflects the amount and rate of return on the investment based the following formula:
Return = (500-P)/P
As the price rises, the return on the bond diminishes. The bond that is priced today at $500 returns nothing to the holder for their time, but the bond that returns $125 over the year has a high rate of return.
12-5) This is not correct. When aggregate demand for money increases the interest rate, there will be a reduction in money demand, but the relationship between the two is not perfect. The decline in demand for money will not be sufficient to bring the interest rate back to equilibrium without assistance. The Fed must actively move to decrease the money supply in order to bring the interest rate back to equilibrium. The speaker is assuming that the demand for money is related only to…… [Read More]
But there have been other causes as well. For example, the collapse of the Soviet Union brought about a significant reduction in defense spending, bringing about a mini-recession in 1990. In the early 1980s a change in Federal Reserve policy brought about an increase in interest rates, which reduced investment both in terms of major consumer products (homes, cars) but also business investment as hurdle rates increased dramatically.
10) 3) a) the marginal propensity to consume implicit in this data is an increase of 800 for every 1000 increase in income, or 0.8.
A b) the expenditure multiplier is 1 / (1- MPC) or 1 / (1-.8) = 5 c) to calculate the equilibrium GDP in this economy, we should build a graph. Where this economy meets with the 45 degree line is the point of equilibrium GDP. In this case, that point is at GDP of 12,000.…… [Read More]
Transfer payments include welfare ($5) and UI ($2). Thus, net taxes are 12-7 = $5.
A c) Total planned investment is the new capital stock, so the increase in capital stock, plus depreciation. In this example new capital stock = 103-100 + 7 = $10.
A d) Real GDP = (C + I + G) / (1 + r) = (50+10+5) / (1.06) = 61.32 e) Total savings = Disposable income - consumption. Disposable income = GDP - Net Tax. Thus, DI = 65-5 = 60. Total savings = 60-50 = 10 f) Total leakages = Net taxes + Savings = 5 + 10 = 15 g) Total injections = I + G = 10 + 5 = 15
8-5) if the capital stock decreases, workers will be less efficient, which will reduce the production function. However, companies will adjust be reducing demand for labor. This will increase worker productivity.…… [Read More]
There are a number of different causes for the most recent recession in the United States. The primary cause was instability in the banking industry, which was brought about mismanagement of mortgage assets. This paper will investigate this cause in particular, although there were other causes as well.
The housing bubble was created when, fueled by easy access to cheap loans, housing prices increased rapidly. These prices increased rapidly in part because the financial institutions that underwrote the mortgages were able to offload that debt onto other investors. They did this by packaging that debt into instruments that were known as collateralized debt obligations (CDOs). These rare derivative instruments were used by financial institutions to hedge loan risk, by spreading that risk around the financial services industry. Loans were packaged, and these complex bundles of loans were typically seen to be low risk. They were not, however, and when…… [Read More]
The U.S. is a property owning civilization and a number of the people wanted land and housing. Americans however scarcely ever create savings. "The country itself lives on other countries' savings by issuing bonds to finance its excessive consumption. The current crisis began with cheap housing loans offered by banks. Banks provided loans but instead of holding the loan in their books, they packaged them into collateralized debt obligations (CDOs) and sold them to other agencies. These agencies passed them on to others and spread them globally as assets" (the Current Economic Crisis, its causes, its impact and possible alternatives, 2009).
Interest rates were lowered and housing loans went up with construction activities leading to land prices increasing. The real estate was booming, generating employment and incomes. But as the rate of interest on housing loans came down, banks started to compete to get more business. Because of low interest…… [Read More]
As Taibbi shows, it is not easy: "I'm going to say something radical about the Tea Partiers. They're not all crazy. They're not even always wrong. hat they are, and they don't realize it, is an anachronism. They're fighting a 1960s battle in a world run by twenty-first-century crooks" (Griftopia 16-17). Taibbi makes clear that the Tea Party is not even homogenous: it is made up of a broad spectrum of individuals (some of whom do not even want to be called Tea Partiers) who are angry and looking for someway to focus their anger.
In conclusion, recouping the losses is not an easy thing to do. hen a company like Lehman Brothers can be allowed to collapse while their competition (Goldman Sachs) can be bailed out by tax payer dollars, citizens are going to start wondering how their country got to such a point in the first place. Taibbi…… [Read More]
is the price. The supply schedule can be represented by the equation Qs = 1400-700P, where Qs is the quantity supplied. Calculate the equilibrium price and quantity in the market for chocolate bars.
Ch5, #20 - For each of the following pairs of goods, which good would you expect to have more elastic demand and why?
a. required textbooks of mystery novels
Because the textbooks are required, there will be more elasticity for mystery novels. That is because elasticity is a measure of responsiveness and indicates how much one thing changes if something else that affects it is changed. In other words, the required text book is needed whether the price changes or if the number of students changes.
b. Beethoven recordings or classical music recordings in general
In this case, the elasticity of demand would show that the classical recordings in general would fluctuate as new artists or prices…… [Read More]
The recession of 2008-2009 and the subsequent government responses provides a good test for economic theories. There are no controlled experiments in economics, so we can only work with case studies in order to understand how economies work. A good starting point is to consider the issue through multiple different lenses, so that we can understand how the crisis occurred and what prescriptions might be best suited for response either to address the root problems or to engage in prevention. This paper will consider the works of Marx, Schumpeter and Keynes in analyzing the financial crisis. All three of these men would have been able to understand its causes, but likely would have taken very different approaches to solving the problem.
The second issue at hand is the question of the future of capitalism. We have a pretty good sense at this point of what the response of…… [Read More]
ealth does not equate to happiness, a sense of purpose, dignity or respect. One of the key underlying assumptions of neoliberal philosophy, as derived from Milton Friedman, is that financial wealth is the ideal end goal of all activity. hile financial wealth solves many problems it does not solve all problems. Opponents of globalization, whatever their other arguments, incorporate this understanding into their protestations.
Naomi Klein goes further, suggesting that the unequal wealth distribution in the globalized economy is deliberate. The march towards globalization is not an altruistic endeavor borne of a firm belief in the power of the free market, but is a calculated strategy on the part of the world's elite to seize the world's wealth and power at whatever expense is necessary. Indeed, any economic benefits realized by the masses are incidental. Casualties -- be they citizens of Iraq, indigenous peoples or indeed any of the world's…… [Read More]
Ergo, the role of the EU seems to be that of implementing protectionist policies. These would be developed onto three simultaneous directions.
A first set of policies would revolve around the creation of a new market architecture at the EU level. This would strengthen the EU's position in the face of future challenges by:
ensuring a sustained and strong support from central banks allowing banks to rapidly implement the rescue plans, and allowing the Union to rapidly implement decisive methods that would prevent the expansion of the crisis to other countries (Commission of the European Communities, 2008).
A second set of strategies revolves around the necessity to really analyze the impacts the crisis has had upon the real economy and find ways in which to improve the real economy. These policies would combine short-term solutions to issues in need of rapid response as well as long-term projects. The short-term solutions…… [Read More]
The downward spiral of deflation, the collapse of countless banks and other financial institutions, and the unprecedented levels of unemployment all demanded that something be done.
The programs that constituted President Franklin Delano Roosevelt's New Deal were not entirely unknown in the pre-Depression world. Various European countries already possessed social welfare schemes to some extent, but in the United States this was largely new thinking. The changes wrought by the New Deal reflected as much the uniqueness of conditions during the Great Depression as they did the undercurrent of new attitudes and ideas that had gradually been taking hold among America's intellectuals.
FDR's planners acted in the context of changing values, an evolving set of institutions, shifting political and economic circumstances, and the ebb and flow of planning opportunities to create a distinctly national, American form of planning.... They were part of a wide-ranging national debate over how to create…… [Read More]
t is explained that the "fiscal cliff" itself refers to the end of Bush-era tax cuts and large spending cuts that will occur at the end of the year if Congress can't agree on a way to cut $1.2 trillion in debt over the next decade. This would lead to income tax and payroll tax increases for almost everyone, with an immediate negative impact on spending and thus on the economy, and with a rising unemployment rate through 2013. The article also cites Ben Bernanke as saying the Fed would not be able to counter or even effectively mitigate the effects of going over this cliff, yet the politics will have to play out before any action is taken by anyone.
lluminating the issue still further, John D. McKinnon, Kristina Peterson, and Josh Mitchell's "Most Households Face 'Fiscal Cliff'" from the November 21st edition of the Wall Street Journal present…… [Read More]
Both Keynes and Kalecki use Marx's theories as a starting point but quickly moved into new ways of thinking, particularly with regard to effective demand being oriented toward the demand-side. Marx had remained rooted in supply-side demand function, rejecting Say's Law only to note that demand did not necessarily meet supply.
Marx, K. (1867). Das kapital: A critique of political economy.
Mandel, E. (1995). Marx's theory of crises. International Viewpoint. Retrieved April 24, 2010 from http://www.internationalviewpoint.org/spip.php?article289
Argitis, G. (2003). Finance, instability and economic crisis: The Marx, Keynes and Minsky problems in contemporary capitalism. University of Crete working paper no. 0307.
Green, F. (1991). Marx, Malthus and wages: A comment on Cotrell and Darity. History of Political Economy. Vol. 23 (1) 95-100.
Magdoff, F. & Magdoff, H. (2004). Disposable workers: Todays' reserve army of labor. CBS Marketwatch. Retrieved April 24, 2010 from http://findarticles.com/p/articles/mi_m1132/is_11_55/ai_n6137106/
Sebastiani, M. (1989). Kalecki and Marx…… [Read More]
The wage subsidy idea - combined with training and technical placement - could work well, even though it may be seen as a "government hand-out" to some. To those who cannot find work, public employment, if handled well, increases the labor supply ("net job growth") and reduces the amount of money paid out in unemployment benefits.
The answer to the question of how to increase the labor supply is perhaps simpler than increasing the demand: to wit, by increasing the number of immigrants one also increases the labor supply; the downside to that is that wages for native-born workers tend to decrease. A second way to increase the labor supply is to raise the age of retirement for workers, and/or raise the age at which pensions for older workers kick in. In either case, more workers remain in the market.
hy do our political leaders favor exports of U.S. goods…… [Read More]
If I was in Congress, I would not vote for such a tax. From an ethical perspective, such a tax is simply punitive. The oil companies are not strictly to blame if the price elasticity of demand for oil is low and they take advantage of that. Consumers have no inherent right to dirt cheap oil. The argument could be made that there are benefits to monopolistic profits such as further exploration, but that argument is actually a bit soft. First, drilling is already included on the income statement -- these are profits above and beyond what the companies need to sustain their business. And that is why they drill -- to sustain their business, so they're going to do it anyway. The reason you don't vote for such a bill has nothing to do with finding ways to make oil companies more profitable or less profitable; it is…… [Read More]
Postal Service (USPS) operates at a loss but its closest competitors -- UPS and FedEx -- both operate at a profit. Suggest how fixed costs have contributed to the situation of the USPS. Provide support for your response.
I would suspect that the fixed costs of contributing to employee's retirement funds (Risk Analysis Research Center, 2009, p. 4) and also their restriction from closing local offices (Slentz and McCann, 2009, p. 12) contributes to higher fixed cost at USPS than FedEx because FedEx is not unionized and while UPS is unionized, and thus experiences a fixed cost that is incurred to the level of union contracts, those contracts are more negotiable for UPS than USPS, and nonexistent or fluid for FedEx. Furthermore while union contracts probably affect the rate of closure for physical facilities for UPS, this would probably be more negotiable than for USPS and…… [Read More]
Consider the following pairs of goods. For which of the two goods would you expect the demand to be more price elastic? Why?
water or diamonds
insulin or nasal decongestant spray
gasoline over the course of a week or gasoline over the course of a year
In this situation, diamonds are the more luxurious item, whereas water is an absolute necessity. Because of their nature, diamonds would have much more elasticity in price because their demand may change much more drastically than water.
Nasal decongestant spray would have the more elastic price because there are many options and substitutes. However, insulin does not have any close substitutes and so it would not be as elastic.
Gasoline becomes more elastic the longer the time duration is being examined. As with other products, elasticity increases as time does. Thus, gasoline over the course of a year is more elastic.
2.…… [Read More]
Countries that are just getting started often use tariffs, quota, and embargos to protect their industries until they can compete without government help. The difficulty with this infant industry argument in support of trade restrictions is that it is not always possible to foresee which industries will do well. For this reason protection frequently lasts long after the industry has matured (Trade estrictions and Their Effects, n.d.).
Governments are enthusiastic to protect what are called strategic industries. These have included in the past industries, such as steel, cars and chemicals. Today, they are more often the high tech, high wage industries like commercial aircraft production. One way of assuring that they remain strong is to protect them from foreign competition. Agriculture is another area that a lot of governments try to protect. Tariffs help make sure that domestic farmers can earn enough profits to continue farming. The decision to use…… [Read More]
Bush implied unemployment figures were declining and Kerry touted very high unemployment figures. In hindsight, it appears that the labor department statistics concurred with the Kerry camp. When Bush still won, unemployment trend indicators seem to be coming true now and there seems to be more problems on the horizon for the economy. The Bureau of Labor Statistics indicated recently that new jobs being created in the economy were the types of jobs that cannot fuel economic growth. Thus, the economy is and will continue to lose jobs to cheaper labor markets around the globe.
The Federal eserve has dictated the cost of capital for businesses to borrow. Trends show that cash shortages in corporate American are increasing and borrowing heavily will be a likely result. Therefore, future actions of the Federal eserve impacts a major aspect of America's future. Trends to observe by the Fed relate to consumer consumption…… [Read More]