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Generally, deflation is a decline in the price level in an economy; it is a reverse of inflation1. Some of its effects are: increase in fixed nominal income, growth of savings because of the reduced prices, and gains to creditors. A deflationary gap exists where the economy has insufficient demand to generate or stimulate full employment equilibrium
In order to achieve its objectives of enhanced global commerce and competition through trade liberalization, the WTO must help improve the political atmosphere for further liberalization. Governments should be engaging in less promise of job increases as a result of trade liberalization but should inform the public about the lasting increase.
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In ordinary language, inflation means a process of rising prices. A situation is described as inflationary when either the prices or the supply of money are rising . In other words, we can say “Too much money chasing too few goods”. Therefore, inflation is a state of an economy in which the value of money is falling i.e. prices are rising.
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The healthcare and drug industry is unique from others because environmental conditions directly influence the nature of ailments and, to some degree, the susceptibility and responsiveness of people to drug types. Intimate knowledge and awareness of the host-environment directly correlate to a pharmaceutical company’s ability to deliver.
The growth of the economy has slackened drastically (Ramin, 2004). The economy, with a rapidly expanding population, has experienced a marked decline in investment, low labour productivity, a widening trade gap, a fast accumulation of debt and, above all, a sharp decline in the standard of living. What are the determinants of economic performance?
It further assumes that Israel would not take up any activity that would hinder economic growth in Palestine. The current economic scenario in Palestine is not very encouraging. In the second quarter of 2007, the GDP of Palestine grew by 6.5%. The largest increases in gross value added were registered in the sectors.
The author asks scientists to become more rational in dealing with crisis and strike a balance between two extremes. On one side, some scientists ask to tie hands and stop the economic progress, while others advocate progress at the cost of destroying the environment. The article overall is balanced and well written and shows the grasp of the author from a different perspective.
John Kenneth Galbraith, a noted American economist, a prolific author and a scholar proposed in his book The Affluent Society that in advanced market-societies, many consumers’ wants and demands are created by large corporate firms and are thus artificial. This statement was in departure to the theory of consumer demand and behavior.
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There are now a growing number of examples that support the potential role of FDIs in improving the economic situation of poor nations and developing countries. Africa especially is an area of interest since it has shown enormous growth in recent years due to FDI than any other effort that has been carried out in the past.
Most of the decision models are formulated in terms of mathematical symbols and relations. Mathematics gives precision which is important in decisions. Decisions have to be precise and sharp. To the extent that the economic decisions are measurable and quantifiable, the use of mathematics is acceptable. Symbols and numbers alone do not suffice; additionally, the logic of reasoning behind those numbers and symbols is also required.
Perhaps the foremost social responsibility levied upon private and public credit providing organization in recent decades is the adoption of fair and just supply of credit to the consumers. This responsibility is being increasingly codified in law and various governmental orders. Its influence is becoming increasingly pervasive.
Attached you will find the evaluation of the foreign currency regimes utilized by some of the major countries in the Asian region. Australia and Indonesia operate on a free-floating regime, whereas Hong Kong is pegged at a fixed rate to the US dollar and China and Malaysia operate a managed float system.
In this article, it is found that the government and other traditional sectors are running short of labor. The scarcity has been brought about by the natural gas and oil boom. The laborers are forgoing other business jobs and offer oil jobs. In this case, there is scarcity in labor and the opportunity cost is the labor to be offered in other sectors of the economy.
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The Keynesian theory suggests that the fiscal and monetary policy can be used to stabilise the economy while taking into consideration the type and extent of the problem needs to be addressed and the level of measure needs to be taken. These policy measures can lead to a higher price level in the absence of policy changes.
As such market structure refers to the state of market or an industry with respect to competition (Market Structure 1).Market structure is important in determining the degree of competition in an industry thereby enabling us to know how this rivalry affects a customer.
International Financial Institutions like the World Bank and the IMF etc. extensively extends aid to the underdeveloped countries. Apart from international institutions, some developed countries such as the USA and UK, etc. also provide financial assistance to poor countries such as Ghana and Nepal, etc. for the promotion of economic development.
The Gross Domestic Product seeks to measure the sum of incomes received by the different types of sectors of the economy, from manufacturing and wholesale to agriculture and service industries. In most developed countries, this national data is published and revised every three months by the National Statistics Office.
The rate of inflation is another important measure of economic performance. Classical economic theory, particularly Irwin Fisher’s equation of exchange, emphasizes that the inflation rate depends on the excessive growth of money supply in the economy. Phillips curve establishes the linkage between the two, with empirical evidence.
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The last two decades have witnessed substantial deregulation of the financial services industry across the globe. The liberalization of financial markets took place during the 1970s and 1980s and was characterized by the abolition of credit and interest rate ceilings, the abolition of controls on international movements of capital.
With only one or two service providers operating in the industry, it was a monopolistic market, where the consumer was fleeced for the use of goods and services. However, with government authorities waking up to the situation and forming telecom regulatory authorities, this situation changed. The number of private operators too increased and the market slowly moved towards perfect competition.
Rose (2004a, 2004b) surprisingly shows that there is no strong empirical evidence that the GATT/WTO has systematically played a strong role in stimulating trade. In contrast, Subramanian and Wei (2007) and Balding (2008) find robust evidence that the GATT/WTO has had a strong positive impact on international trade.
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Universal healthcare is one οf the most important topics οf the world. Since the tenure οf President Bill Clinton in the United States, universal healthcare has also been an important subject for media because the idea resounds in the desires οf people in this country. A sector οf the US population which is growing at a rapid rate is the poor, including underemployed, and legal and illegal immigrants.
The exchange in foreign market would only create the different in the cost of currency transfer, depending on the value of the currency. In essence, the model outlines that the demand and supply changes have various impacts in trade.
In recent years, Europe has reached an unprecedented economic integration through the European Union (EU). The economic integration to date has never been replicated by any other country, region or area of the world. The economic integration of Europe is an achievement envied by all the other regions worldwide and is a model for future development.
As a result, the economic analysis and appropriate managerial solutions are found to be quite similar.
One of the most distinctive features of the New Economy is the importance of the scale and scope of economies. A prime focus now is on the concept and viability of ‘scalability’ - the degree to which the total scale and scope of the business can be increased without a corresponding increase in costs (Mankiw, 2006).
Surely the economy of South Korea has taken great advantage from globalization and this can be proved by observing the improvements in the economy of the country after the financial crisis of the year 1997. Obviously globalization made them survive and to work hard by observing other countries and by also taking help from other countries which made them able to stabilize their economy.
In order to determine whether a data is set is normally distributed the skewness value is determined, positive or negative skewness value shows that the data is not normally distributed. Another way to determine is using the values of the mean, median and mode, when these values are all equal meaning that the mean = mode = median then the data set is normally distributed.
International discernment of this type of thinking will be critical to ensuring the success rate of economic efficiency initiatives led and instituted by nations with a history of regional and global success. There are many variables in modern times that can impede the efficiency that nations seek in regards to economic efficiency.
According to the essay, risk happens to be the most crucial and inevitable factor involved in financial investment. Investors at all stages are vulnerable to various types of risks associated with different investments. Shares are riskier than bonds because they do not bear any legal guarantee for the investors to recover their principal amount.
The author states that with the help of the paradox of thrift, Keynesian economics has been able to illustrate the differences between macroeconomics and microeconomics. It shows how microeconomic considerations only will seriously jeopardize the macroeconomic factors and the economy as a whole.
The author states that by shifting demand away from their own goods the resultant effect will be increased imports suggesting a weak currency in value as compared to the other country’s currency. The average value of the exchange rate between two currencies depends on their relative purchasing power.
When there is a rise in the price of a particular good you want to buy, it affects your spending level. In the short-term view, inflation and unemployment are inversely proportional to each other. That means when unemployment is high, the price level keeps low, and when inflation goes high, unemployment takes a downturn.
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Amid the credit crunch and subprime crisis of the United States which brought about the bankruptcy of its biggest victim Lehman Brothers, I received a forwarded email which is the published opinion of Rosa Brooks from the Los Angeles Times. This is purportedly a letter to the US from the IMF and World Bank critiquing the recent policies and regulations of the country which lead to its downslide.
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In the given work Becker presented the three foundational assumptions of the economic approach as "maximizing behavior, market equilibrium, and stable preferences". Becker defines primary auxiliary assumptions as household production and interdependent preferences and economic approach to the family.
As evident from the formula given above price elasticity of demand is calculated using percentage changes in quantity demanded and price. This is because elasticity is independent of the type of measure used. Average values for quantity and price are used so as to eliminate discrepancies arising due to movement from lower to higher or vice versa.
Claire Sterling in her book, “The Terror Network”, convincingly made the case that the Soviet Union was supporting international terrorism as a way to destabilize the west in general and the United States in particular. The foreign policy principles of the Reagan-Bush administration were friends of Sterling’s hypothesis.
The model of intertemporal trade is one of the simplest models which make up the foundations of contemporary economics. In its simplicity, this model gives significant information about the functioning of the entire economy. Micro-foundation models help us understand larger more complicated economic situations by starting at the basics.
The paper will include a report of the chosen business with data and statistics about the industry’s growth and competitors in the business. The purpose of the paper is to work on a detailed business review report touching on topics like price, income and cross elasticity,
This essay focuses on determining the influence of Hurricane Katrina on macroeconomic indicators, measured in the definite figures. Major relevant factors are discussed, such as labor force, GDP, inflation, trade and energy supply and prices. Macroeconomic effect of Katrina is deemed less dramatic, since affected states account to a small portion of economy.
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The decision to consume one product usually comes with the trade-off of giving up the consumption of something else (Investopedia, 2009). The phrase ‘There is no such thing as a free lunch’ believed to be originated from some shops in the United States which offered free lunch to their customers who purchase a drink.
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The last part analyses the strengths and weaknesses of the economy as a location for FDI or foreign direct investments. The Appendix contains the summary of the key indicators for each of the three countries in this analysis. Most of the data used in this paper came from one source, the latest Factbook of the Central Intelligence Agency (CIA, 2007).
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The article “Corporate Income Tax” gives a clear definition of the corporate income tax, which is beneficial to the research. It defines corporate income tax as “a direct tax levied on a juristic company or partnership which is established under Thai or foreign law and carries on business in Thai or derive certain types of income from Thailand.”
The UK economy is suspended for its initial depression ever since the early 1990s. An idyllic tornado of growing price rises on the backside of the high product charges, a failing house financing, loans, financial market in addition to the tattered monetary segment have combined to darken the skies.
Since it helps the economy to produce more, more goods are produced and everyone has more goods for consumption, living standard in the economy increases. This is why economists rate economic growth as a matter of great importance. If an economy is growing at 2.5%, the economic growth or total output will double from the current level in 70/2.5= 28 years.
According to the paper, tied aid does not help recipient countries as much as untied aid. First, tied aid is less cost-effective . Second, the recipient is not able to buy local goods or hire local companies. Just four countries (Norway, Denmark, the Netherlands and the UK) were breaking away from the idea of “tied aid” to the “untied aid”.
The three objectives of banks today are solvency, liquidity and of course profitability which despite their conflicting nature are still being pursued simultaneously. Today banks in allocating credit will rather prefer firms with a track record and not by political or other unprofessional considerations.
In the Post Industrial Revolution era, the economies of many countries have experienced tremendous growth, which has resulted in the shape of economic strength and high living standards in the countries such as United States, UK, and Japan. Despite the tremendous progress the economies of these countries also face periodical economic shocks.
David Ricardo coined the comparative advantage theory of trade. He considered two countries, two products and two factors of production. In his theory he stated that even if one country had an absolute advantage in the production of the two goods they would still gain by trading, absolute advantage according to Adam Smith refers to the cost advantage country posses in the production of goods.
The forward market is one of the various tools available to mitigate the risks involved in foreign exchange risk. The forward market is an OTC market where traders can buy or sell currency at a pre-specified rate for delivery on a pre-specified date. The exporter can sell the forward contract to hedge his/her receivables and the importer can buy forward contract to hedge his/her payables.
A lot of background work goes in before some company decides to expand in other countries. Once decided and implemented, this penetration process is very difficult to change. Issue of how to reach buyers effectively and efficiently and thereby maintain the profitability of the organisation is the prime concern of the distribution process.