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Why are Oligopolies tempted to collude even if it means breaking the law? This essay deals with oligopolistic market structures and incentives that push them towards collusion. In doing so, it discusses the characteristics of oligopolies, collusion, cartels, game theory and the kinked demand curve.
This can be better observed with reference to the statistical data represented below: Interest Rates Fig.1: US Interest Rates 2007-2012 (US Department of the Treasury, 2012) It can be observed from the above diagram representing the interest rates fluctuations in the United States that since 2007 the economy has been witnessing steep decline in its financial investment market.
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This effect is likely to take economists decades to curb this though they are encouraged to act quickly in terms of scope and costs relayed through relative activism Amidst this, Romney comes with a comprehensive and deliberate plan to curb this crisis leading to economic growth and development of the Americans not forgetting their critical welfare.
The cost of one forklift is 2/6= .33 automobiles. The concave shape of the production possibilities curve shows the increasing opportunity costs. The shape of the curve depicts that the economy must give up larger units of rockets to gain added units of automobiles.
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Such goals often include price stability and low levels of unemployment. The US monetary policy impacts different aspects of financial and economic decision made in the country, for instance whether to purchase a house or establish a business or whether to put savings in bonds or stocks (Havrilesky 113).
The debate is not merely about the task of the government in business entities but also the respective contribution of the other stakeholders in the economic domain in the long-run market development. This paper comprehensively explores former Gov. Eliot Spitzer’s speech on governments and markets.
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Like any other agreement, compromise, or decision there are negatives and positives NAFTA was not excused as its matters flash heated debates. The greatest advantage of NAFTA was blatant; investment and trade have increased drastically since the agreement implementation.
Both low inflation and high inflation rates are equally dangerous. Higher inflation rates make ordinary people’s life difficult because of higher prices of commodities whereas low inflation rate results in output loss, unemployment and distorted investment and consumption decisions. Below 5 or 6 percent inflation rate is acceptable everywhere.
It is made from eco-friendly materials and powered by electricity. Sun Top has very high efficiency compared other normal cars and consumes less energy. Sun Top is has transparent solar batteries’ windows, panoramic view cameras and sensors, a transparent monitor in the windscreen, electro-engines at the back wheels, and auto parking systems.
The level of real income rose as the result of high terms of trade as well the inflation rate got reduced. The ratio between the prices of exports and the prices of imports is regarded as the terms of trade. With the high rate of terms of trade, the country will be able to obtain higher imports with relatively fewer amounts of exports.
Under a situation of fully flexible prices and wages, this would be the situation in which W/P is the nominal wage, Nd and Ns are labor demand and supply respectively. O is the output is the income and w/p is the real wage. This means that there exists a relationship between prices and wages in determining the economic cycles.
The global financial crisis that commenced near the end of the year 2007 has had tremendous adverse impacts on the economy. Almost five years have passed since the commencement of the global financial crisis and the consequences are still quite noticeable in many parts of the world in general and the US in particular.
Exporters of manufactured products have foreign exchange at their disposal that they use to finance imports, foreign direct investments, and capital goods. Developing countries that mostly export traditional goods always grapple with bop deficits that have to be constantly serviced. These funds could be used for economic activities that would result in economic growth.
The book discusses in details several fallacies such as high taxes, evils that take place in the public projects, minimum wage rate, effects of bailout, price control, tariffs on imports, rent control, trade union activities, regulations, and economic effects of government actions. Less important fallacies are also included in the book.
Usually, we think of measures of the money supply in a well-developed economy as partial and indirect indicators of the valuable demand for services and products in the economy. This is because a lack of demand for goods and services causes a shortage of new money creation or net credit creation.
It saw to the near collapse of large financial institutions, the bailout of banks by national governments and downturns in stock markets across the world. The housing market also suffered in many areas that resulted in evictions, foreclosures and prolonged unemployment.
According to paper, the BoE plays vital role of regulating the financial operations of the UK, with a view to maintaining financial stability. The Financial Policy Committee, a subsidiary of the BoE, was established after the crisis, with the aim of supervision of the financial markets, and implementation of the financial regulation mechanisms.
The paper derives insights and conclusions relating to all of these considered factors and makes recommendations moving forward. The general assessment is that of a coffee market on a global scale that is tilted towards the intermediaries being able to extract most of the value for coffee production from farmers, with the exporting countries themselves just getting a small percentage of the total value of their crop.
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The paper concentrates on factors that influence demand and supply and discusses the price elasticity of demand that produces a kinked demand curve in the oligopolistic airline’s service competition and the point of equilibrium. It also describes the benefits of intellectual property, and how it protects the owning airlines in their operations.
Thanks to globalization of trade, the prices of goods and services in the market are being driven by the global prices. Globalization has allowed for stiff competition in the market which has led to people choosing the best prices of goods. As result, people who sell their goods at extremely high prices have been forced to tone down by the market forces reading to creation of uniform prices of goods.
The period after recession and presidential election in 2012 saw changes in the policies of the government. These policies are in line with the fundamentals of economic theory on supply and demand and at the same time keeping an eye over the performance of US dollar.
This recession made the federal government under the leadership of president Obama to come up with a stimulus package program in the year 2009. The package was commonly known as fiscal policy and it was focusing at economic stimulation via financing government project to create direct employment opportunities.
The results are unpredictable and can cause shocking huge outcomes, for example, the 9/11 attack. Correa (n.d.) argues that the black swan events occurrences are unpredictable and no one knew before that such events could happen in the future. The author gives an example of the Internet, which has expanded and caused big changes globally.
The nominal Gross Domestic Product of the United States of America was approximated to be $16.62 trillion in the year 2012. This is almost one quarter of nominal global Gross Domestic Product. In addition, the country’s Gross Domestic Product at purchasing power parity is also the leading among any definite nation in the universe.
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As a major export-run nation, Germany continues to be exposed to changes in the domestic economy, capital markets, world economies, and trade flows. Risk Assessment: Germany Introduction The purpose of this paper is to assess the suitability and stability of Germany for both the United States Government and foreign private sector investment.
Policy decisions do not depend on social planners who explain the extension of social well-being as their choices. Many economic models that were made in the past failed to elucidate what is happening in the real world because they ignore politics. Political economy integrates anthropology, sociology, philosophy, and the sciences of nature.
Such issues include the concept of opportunity cost, production possibility frontier, and scarcity of resources, tradeoffs, efficiency, and the market structure in which Thasta operates. First section: Opportunity Cost Concept The management of Supa Drink must factor in this critical concept as they plan to roll out Thasta into the beverage market.
The monetary policy mainly revolves around the control of the liquidity preference and the money supply in the economy. The main objective behind the implementation of a monetary policy is the maintenance of the value of the local currency of the economy by taming the inflation.
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In reality, the Asian financial crisis became the severest form to affect developing countries after the huge 1982 debt crisis. In this way, this crisis was least expected. The crisis shed light on possible weaknesses within the international capital market in the event of immediate reversals of a growing market.
In the modern world, economic growth in a nation can be obtained with the benefits of international trade and competition. History has shown that nations like the U.K., have adopted the mixed economic system, thereby achieving substantial growth since Industrial Revolution. Economists believe that competition in the market maximizes the value of the net social welfare in a country.
In recent years, most states have increased taxes on tobacco to assist in reducing their budget deficits. Economists have viewed this effect as a win-win situation as it has positive health effects and also a budget effect. There is a general agreement among policymakers that raising taxes on tobacco would result in a reduction of consumption.
High powered incentives enables employees to achieve their set targets because they would work with vigor to ensure that their goals are achieved. The intensity of the qualitative work done by employees is also increased due to the intensity of punishment that may be levied against one for not achieving their goals or the set objectives.
Samsung has been innovative because they were among the first to manufacture smartphones. A smartphone is a mobile phone that is built on a mobile operating system that has a more advanced capability of computing and connectivity as compared to the common feature phone (Tidd, 1997).
The circumstance lies in the fact that labor productivity does not entail some other elements of production that exist. This may influence the value added per employee. Taking into account several other factors of production, it is crucial to approximate total factor productivity (TFP) as an alternative to just concentrating on labor productivity.
Internationalization is the process by which any company that is operating in its home country or a particular nation aims at expanding to foreign soils through various techniques in order to tap the international markets and to move out of any stagnation in the growth of the company. There are various methods or strategies by which corporations enter into foreign markets.
Accordingly, free international trade facilitates quick movement of goods due to uniformity of trade standards and makes the economic environment predictable thus enabling businesses to engage in foreign direct investments (Frederking, 2010). After the passage of Tariff Act 1930, the protectionist policies led to decline in the level of trade thus forcing successive US governments to engage in aggressive efforts of opening markets in other parts of the world.
Holihan (2008) explains that, in economics, the term commodity specifically entails goods. A commodity is a product that is a marketable item that is difficult to differentiate from other products of the same type that are from other manufacturers or producers. According to Holihan (2008), commodity products include both soft and hard primary goods.
The article applied an aggregated bar graph to represent its information and the graph improves visualization f the effects of the tax cut that the government proposed. Its horizontal axis illustrates percentages of respective items relative to the nation’s gross domestic product while the horizontal axis represents a period in years and communicates anticipated changes in effects of the tax cut. ‘
Some conventional banks have integrated Islamic banking by creating subsidiaries that offer Shari’ah products. Jurisdiction’s Central Bank Acts, Islamic Financial Services Board and Auditing Organization for Islamic Financial Institutions have been created to provide framework under which Islamic Banks will operate.
Measures that have been taken to stop dumping have always been and are still used as most significant devices by countries as a protection against imports. Measures to stop dumping tend to be supported over other trade remedies because unlike safeguard measures, they provide the opportunity for a selective approach.
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Seven of these ten countries would join once they are able to meet the strict guidelines of Eurozone. Rest of the three countries, including the United Kingdom, have an opt-out exception and will not join the Eurozone until the government takes a decision through a political referendum.
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Major banks became bankrupt and various governments undertook to rescue their economies through economic stimulus packages. Mortgage-back securities became toxic and general stock market declined in value.
There have been many reports which have helped people understand the impact of currency demands, especially since the increase of demand through the use of cards like debit cards, etc. Many surveys have been conducted and when all of these are used to survey new trends.
The study is descriptive in nature and would be based on case studies. Data would be collected partly from legit documentations and partly from observations. The study is expected to take a total of about four months, following proposal’s approval.
Macroeconomic convergence, economic growth and financial development.Convergence is a process in which the per capita incomes of the poorer economies tend to grow as fast as that of the richer economies. The process results in the all the economies per capita incomes to converge eventually.
The extent to which global economies are currently converging is driven by national and international banking regulations (Rosenbluth and Schaap, 2003) and the General Agreement on Trade in Services (GATS), which constituted the first global trade agreement that covered services (Key, 1999).
However, same source indicates there are still traces of its past autarkic policies because of the social democratic policies that have governed the country since 1947 to 1991. At that time, the economy was characterized by extensive regulation, slow growth, protectionism, and corruption.
The last quarter of 2008 witnessed market failure as well as a regulation failure. Thus it is expected that the global financial crisis will encourage the authorities to strengthen the regulation regime and make new regulations as well.The Global financial Crisis first began in USA’s sub-prime mortgage market.
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The Relationship Between Trade Openness and Foreign Direct Investment (FDI). There is a vast body of literature to show the cause-and-effect relationship between trade openness of a country and the growth of income. The concept that increase of trade results in increase of incomes lays the basis of endogenous, classical and neoclassical theories of growth.
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The growth rate of manufacturing sectors plays an important role in the economic development of a nation and depicts its economic potential. The manufacturing sector has been the engine of growth since the 18th century. However, recently the service sector accounts for 70% of GDP in advanced economies.