Summary
This article talks about the fact that most European countries were hit hard by the recession. However,
Connections
Since this chapter is all about the Stabilization Policy, this chapter can tell us why
Personal Reflection
Tuesday, May 5, 2009
Chapter 8 Blog
Wednesday, April 1, 2009
Chapter 7 Blog
http://news.bbc.co.uk/1/hi/business/7724215.stm
Summary:
In the current recession, banks are having many problems keeping up with the economy. Banks are considering another tax reduction of 0.5%. This banking crisis can be comparable to the one in World War I. Apparently; this recession is expected to continue for quite a long time according to the Bank of England. Banks are urging the government to contribute billions of dollars help us get out of this recession. Banks as well as the government is trying to find a solution to this recession, but we all know that it will take lots of time before we can get ourselves out of it.
Connections:
This chapter is all about banks and money. This article talks about the fact that banks are trying their best to get out of the recession. However, it will take a lot of time. Also, 7.2 talks discusses if banks can actually go bankrupt. Well, the main reason we are in a recession is because one of the banks in the
Personal Reflection:
I agree that this recession is going to take some time to get out from. However, I don’t think that it will take as long as the Great Depression. We have seen a recession before, so I believe that we can find different solutions or reuse the ones that we had in the past. The tax cuts will help, but I don’t think it is enough to pull us out. One strategy I read on a website is to get people to spend more so the money can be invested in the country.
Sunday, March 8, 2009
Chapter 6 Blog
http://www.economist.com/displaystory.cfm?story_id=13248177
Summary:
Many banks such as the Bank of England are trying to lower interest rates to help with the current recession. In fact, the Bank of England has dropped its interest rate from 5% to 0.5% since October of 2008. As we all know, two percent inflation is supposed to be considered healthy. However, it is expected to decline to 0.7% by the end of 2009. Moreover, unemployment rate is also expected to drop even further than it is currently at. With this being said, GDP would also drop. As a matter of fact, banks anticipate that the GDP will drop another three percent when this year comes to an end. Although banks around the world are trying to come up with solutions to this recession, the GDP is not looking too good all over the world.
Connections:
This chapter is all about the Gross Domestic Product (GDP), which refers to the value of goods and services produced in a country in a given year. Since we are in a recession, the GDP is dropping which results in unhealthy inflation (above or under 2%) and unemployment rate rising. Banks are currently using the Monetary Policy to lower interest rates to help with the recession. This policy is trying to get households to save less and spend more in their country so the economy and GDP can become healthy again. People may think that a country spending a bit more won’t do anything, but I have heard that the money spent in a country can be invested about four times the original amount.
Reflection:
I think that this interest rate cut back isn’t going to be enough to get us out of the recession. However, if new ideas keep building up to get us out of this problem, the insignificant things might add up and make a significant one. Like one of the economists says, “Even if the central bank’s bold new strategy is not a sure remedy, it is still worth trying.” I totally agree with him because things are only going to get worse if no action is taken. However, the bank’s action at least gives us a chance to get out of the recession and/or prevent things from getting worse.
Summary:
Many banks such as the Bank of England are trying to lower interest rates to help with the current recession. In fact, the Bank of England has dropped its interest rate from 5% to 0.5% since October of 2008. As we all know, two percent inflation is supposed to be considered healthy. However, it is expected to decline to 0.7% by the end of 2009. Moreover, unemployment rate is also expected to drop even further than it is currently at. With this being said, GDP would also drop. As a matter of fact, banks anticipate that the GDP will drop another three percent when this year comes to an end. Although banks around the world are trying to come up with solutions to this recession, the GDP is not looking too good all over the world.
Connections:
This chapter is all about the Gross Domestic Product (GDP), which refers to the value of goods and services produced in a country in a given year. Since we are in a recession, the GDP is dropping which results in unhealthy inflation (above or under 2%) and unemployment rate rising. Banks are currently using the Monetary Policy to lower interest rates to help with the recession. This policy is trying to get households to save less and spend more in their country so the economy and GDP can become healthy again. People may think that a country spending a bit more won’t do anything, but I have heard that the money spent in a country can be invested about four times the original amount.
Reflection:
I think that this interest rate cut back isn’t going to be enough to get us out of the recession. However, if new ideas keep building up to get us out of this problem, the insignificant things might add up and make a significant one. Like one of the economists says, “Even if the central bank’s bold new strategy is not a sure remedy, it is still worth trying.” I totally agree with him because things are only going to get worse if no action is taken. However, the bank’s action at least gives us a chance to get out of the recession and/or prevent things from getting worse.
Wednesday, February 25, 2009
Economics Chapter 5
http://www.cbc.ca/money/story/2009/02/06/januaryjobs.html
Summary:
As most of us know, we are currently in a recession. When a recession occurs, there is usually a high rate of unemployment. Current statistics have shown that there are many job losses. As a matter of fact, the job losses exceed the numbers of the 1980s and the 1990s. In just January alone, the unemployment rate went up by 0.6% to a current 7.2% unemployment rate in Canada. This unemployment rate is partly because of the 213,000 jobs that were lost ever since October 2008. To make matters worse, economic experts expect that this drop will continue for another six months or so. Although the unemployment rate is expected to increase, companies such as the Bank of Canada declared that they will cut interest rates to help solve the problem of this recession and the unemployment rate.
Chapter 5 Connections:
This is related to chapter 5 because it does talk about unemployment rates and the labour force. A survey known as the Labour Force Survey is complied monthly based on 50,000 households across Canada. This is used to determine the employed and unemployment rate. We can say that the survey in the present ended up with a high unemployment rate due to this recession. In fact, there is a formula for unemployment rate and that is: unemployment rate= unemployed / labour force. Out of all the types of unemployment, I believe we are going through a demand-deficient unemployment because many people are now purchasing fewer goods (not to mention, inflation), because of this recession; thus, the employers will have to lay off workers due to the fact that they are having difficulties selling their product. As a result, there is currently such a high unemployment rate in Canada.
Personal Reflection:
Being in the current labour force, I have witnessed many people that have been laid off. I also believe that the unemployment rate will increase for another six months or even longer. Canada usually has a higher unemployment rate compared to the United States, but right now, the unemployment rate for Canada is actually lower than the United States. Although there have been job loses in Canada, when we compare to our neighbours, the United States, they are doing worse than us. However, if we compare the unemployment rates of 1980s and the 1990s to the present, we actually have a lower rate right now. Overall, I believe that this is currently an economic drawback and not a crisis; therefore, I think jobs will be available to the unemployed within a year.
Summary:
As most of us know, we are currently in a recession. When a recession occurs, there is usually a high rate of unemployment. Current statistics have shown that there are many job losses. As a matter of fact, the job losses exceed the numbers of the 1980s and the 1990s. In just January alone, the unemployment rate went up by 0.6% to a current 7.2% unemployment rate in Canada. This unemployment rate is partly because of the 213,000 jobs that were lost ever since October 2008. To make matters worse, economic experts expect that this drop will continue for another six months or so. Although the unemployment rate is expected to increase, companies such as the Bank of Canada declared that they will cut interest rates to help solve the problem of this recession and the unemployment rate.
Chapter 5 Connections:
This is related to chapter 5 because it does talk about unemployment rates and the labour force. A survey known as the Labour Force Survey is complied monthly based on 50,000 households across Canada. This is used to determine the employed and unemployment rate. We can say that the survey in the present ended up with a high unemployment rate due to this recession. In fact, there is a formula for unemployment rate and that is: unemployment rate= unemployed / labour force. Out of all the types of unemployment, I believe we are going through a demand-deficient unemployment because many people are now purchasing fewer goods (not to mention, inflation), because of this recession; thus, the employers will have to lay off workers due to the fact that they are having difficulties selling their product. As a result, there is currently such a high unemployment rate in Canada.
Personal Reflection:
Being in the current labour force, I have witnessed many people that have been laid off. I also believe that the unemployment rate will increase for another six months or even longer. Canada usually has a higher unemployment rate compared to the United States, but right now, the unemployment rate for Canada is actually lower than the United States. Although there have been job loses in Canada, when we compare to our neighbours, the United States, they are doing worse than us. However, if we compare the unemployment rates of 1980s and the 1990s to the present, we actually have a lower rate right now. Overall, I believe that this is currently an economic drawback and not a crisis; therefore, I think jobs will be available to the unemployed within a year.
Sunday, February 1, 2009
Chapter 4 Blog
http://online.wsj.com/article/SB123180759988175649.html
Summary:
In this article, it talks about the “death tax” which is a tax that family members have to pay due to the death of an owner. Mr. Obama wants to bring this estate tax back which was supposed to expire in the year 2010. He states that this “death tax” will create new jobs, but the author thinks otherwise. Although this tax is targeted towards the wealthy people such as Bill Gates, these rich people have ways to avoid the taxes which ultimately means that the lower and middle income people pay it. This is a problem because those two groups of people (lower and middle class) are responsible for creating new jobs, but if those people can’t pay the taxes, then there will be no new jobs created. Also, studies have shown that countries are better off without a “death tax” because many countries remove this tax so there would be more jobs. Although the government thinks that they are creating more jobs for the people in the United States, the results show otherwise.
Connections:
Since chapter four talks all about taxes created by the government, this article is related to this chapter. Since revenue is made as a result of taxes, the estate tax also creates revenue. Also, there the ability to pay concept can be applied to this article. Since the wealthy have the ability to avoid much of the estate tax, some argue that taxes should be paid according to their incomes and all their personal wealth (e.g. real estate, stocks, bank accounts, etc.) This is also somewhat related to a regressive tax because the poorer people end up carrying the burden of this “death tax” while the wealthy people find ways to evade it which makes the poor people pay a higher percentage of it.
Reflection
After reading this article, I have to agree with what the author says. If studies shown that eliminating this “death tax” do indeed help create new jobs, I think Mr. Obama should consider getting rid of this estate tax. Also, Countries such as China and other poor countries eliminated the “death tax” and as a result, new jobs were created. The only countries to pay the “death tax” are the United States, New Zealand and the United Kingdom. In my opinion, there is no point continuing this tax because most of the people the country is taxing are the poor people. If the lower and middle class people are the ones that are looking for the jobs, giving them more taxes to pay isn’t going to help them one bit. Overall, studies as well as results are displayed that the “death tax” is better off excluded.
Summary:
In this article, it talks about the “death tax” which is a tax that family members have to pay due to the death of an owner. Mr. Obama wants to bring this estate tax back which was supposed to expire in the year 2010. He states that this “death tax” will create new jobs, but the author thinks otherwise. Although this tax is targeted towards the wealthy people such as Bill Gates, these rich people have ways to avoid the taxes which ultimately means that the lower and middle income people pay it. This is a problem because those two groups of people (lower and middle class) are responsible for creating new jobs, but if those people can’t pay the taxes, then there will be no new jobs created. Also, studies have shown that countries are better off without a “death tax” because many countries remove this tax so there would be more jobs. Although the government thinks that they are creating more jobs for the people in the United States, the results show otherwise.
Connections:
Since chapter four talks all about taxes created by the government, this article is related to this chapter. Since revenue is made as a result of taxes, the estate tax also creates revenue. Also, there the ability to pay concept can be applied to this article. Since the wealthy have the ability to avoid much of the estate tax, some argue that taxes should be paid according to their incomes and all their personal wealth (e.g. real estate, stocks, bank accounts, etc.) This is also somewhat related to a regressive tax because the poorer people end up carrying the burden of this “death tax” while the wealthy people find ways to evade it which makes the poor people pay a higher percentage of it.
Reflection
After reading this article, I have to agree with what the author says. If studies shown that eliminating this “death tax” do indeed help create new jobs, I think Mr. Obama should consider getting rid of this estate tax. Also, Countries such as China and other poor countries eliminated the “death tax” and as a result, new jobs were created. The only countries to pay the “death tax” are the United States, New Zealand and the United Kingdom. In my opinion, there is no point continuing this tax because most of the people the country is taxing are the poor people. If the lower and middle class people are the ones that are looking for the jobs, giving them more taxes to pay isn’t going to help them one bit. Overall, studies as well as results are displayed that the “death tax” is better off excluded.
Sunday, November 23, 2008
Chapter 3 Blog
http://www.economist.com/business/displaystory.cfm?story_id=12638642
Summary:
Recently, car industries such as GM and Chrysler are requesting loans from the government. This is a problem for both the United States and in Europe. The European government is considering giving car manufacturers €40 billion ($51 billion) in soft loans. The GM Rick Wagoner said that they need the loans fast or they may not be able to pay off their bills by the end of the year. Although Ford seems to be doing better than Chrysler and GM, chief executive Alan Mulally, predicts that Ford will also go bankrupt due to the fact that this will be a big impact on the suppliers. Some such as the European Commissioner believe that the big car producers should receive help because they are important and traditional car makers. However, Neelie Kroes (competition commissioner), believes that giving loans to these car makers will be unfair for the other car makers out there.
Chapter three connections:
This article talks about government involvement which is what chapter three is about. Even though car companies such as GM and Chrysler are privatized companies, they are still requesting money from the government to avoid bankruptcy. As a result, this will have negative third-party effects on the people that are living around the area because of the pollution caused by the cars. If the government loans the money to these companies, then it will be unfair to other competitors. On the other hand, many small car companies depend on the these three big businesses to operate. However, if the government does not loan money to them, then there are many jobs that would be lost. All in all, both choices lead to bad consequences.
Personal Comment:
Since i lived in Vancouver for all my life, i have seen many GM and Chrysler cars. Although the government should not lend money to private companies on normal circumstances, I think they should in this Situation. In my opinion, this is not just about saving the big companies, but instead it is to protect the people's jobs. Since we are in recession, I believe that the car makers should receive help to avoid going into a more serious state we are in now. I have seen commercials a few months ago that were advertising cheaper cars for about $18,000, but now they go as low as $8,000. I have never seen a new car sold for such a low price in my life time before. Also, if the companies do go bankrupt, the other car makers might not have such smooth time either because many people will lose their jobs. As a result, there will be a decline of consumers that are going to buy vehicles. Even though these three companies are American owned, there are many factories built in Canada (mostly in Ontario). As a result, these companies provide jobs for the Canadians and if these three major car companies were to close down, that will leave not only Americans unemployed, but will also leave many Canadians unemployed too.
Summary:
Recently, car industries such as GM and Chrysler are requesting loans from the government. This is a problem for both the United States and in Europe. The European government is considering giving car manufacturers €40 billion ($51 billion) in soft loans. The GM Rick Wagoner said that they need the loans fast or they may not be able to pay off their bills by the end of the year. Although Ford seems to be doing better than Chrysler and GM, chief executive Alan Mulally, predicts that Ford will also go bankrupt due to the fact that this will be a big impact on the suppliers. Some such as the European Commissioner believe that the big car producers should receive help because they are important and traditional car makers. However, Neelie Kroes (competition commissioner), believes that giving loans to these car makers will be unfair for the other car makers out there.
Chapter three connections:
This article talks about government involvement which is what chapter three is about. Even though car companies such as GM and Chrysler are privatized companies, they are still requesting money from the government to avoid bankruptcy. As a result, this will have negative third-party effects on the people that are living around the area because of the pollution caused by the cars. If the government loans the money to these companies, then it will be unfair to other competitors. On the other hand, many small car companies depend on the these three big businesses to operate. However, if the government does not loan money to them, then there are many jobs that would be lost. All in all, both choices lead to bad consequences.
Personal Comment:
Since i lived in Vancouver for all my life, i have seen many GM and Chrysler cars. Although the government should not lend money to private companies on normal circumstances, I think they should in this Situation. In my opinion, this is not just about saving the big companies, but instead it is to protect the people's jobs. Since we are in recession, I believe that the car makers should receive help to avoid going into a more serious state we are in now. I have seen commercials a few months ago that were advertising cheaper cars for about $18,000, but now they go as low as $8,000. I have never seen a new car sold for such a low price in my life time before. Also, if the companies do go bankrupt, the other car makers might not have such smooth time either because many people will lose their jobs. As a result, there will be a decline of consumers that are going to buy vehicles. Even though these three companies are American owned, there are many factories built in Canada (mostly in Ontario). As a result, these companies provide jobs for the Canadians and if these three major car companies were to close down, that will leave not only Americans unemployed, but will also leave many Canadians unemployed too.
Monday, October 27, 2008
Chapter 2 Blog
http://www.economist.com/business/displaystory.cfm?story_id=12454133
Summary:
Earlier this year, the price of oil was very expensive and did not show any sign of lowering. As a result, 30 airline carriers have been bankrupt and more are expected to take place later on this year. But things are starting to look brighter because oil prices have recently started to drop shortly after those bankruptcies. Therefore, the beginning of this gloomy event for airlines ended up being an advantage for airline companies to make profit. Now, many old planes are being replaced with more fuel efficient ones.
Chapter Two Connections: Supply and Demand:
This article made a connection with chapter two’s supply and demand concept. When the price of oil was high, many airline companies were making very little profit or in some cases, losing money. This is in fact a supply problem rather than a demand one because the supply of oil went up so there are more tickets supplied. Another reason this is a supply question is because the cost of oil is so much that the airline companies are forced to either charge their customer to pay for fuel surcharges and have less sales or charge the tickets regular price for more sales. If they decide to charge the consumers more, this would move the supply curve to the left because there would be less tickets sold due to the increase in price. However, not charging the consumer would move the supply curve the the right because less there would be more tickets sold at a lower price. Since this is a luxury for most people. this is elastic. Although you may think that it is a necessity for all business people to take the plane, it really is not because the CEOs make the decision of travelling to somewhere else when they really do not need to. The bottomline is that it is not a necessity for the majority of the people.
Personal Reflection:
I agree that building fuel-efficient airplanes could make airline tickets more inexpensive; therefore, creating more of a demand of airline tickets. However, the oil prices right now are fluctuating quite a bit and may rise at anytime. Therefore, by the time they build their airplanes, the oil prices may be as high as before (especially in the current recession). As a result, the demand for airline tickets may be very low if the price of oil shoots up. If I were in their positions, I would wait until the price of oil settles before proceeding in constructing fuel-efficient planes. However, it is possible that airline companies are demanding for fuel efficient planes to be built or they would buy the used planes from the bankrupt companies. In order for the manufacturers to stay in business, they must build the fuel effcient planes. Since there are about 40000 workers working for this company, they must do as the airline companies say or all those jobs may start to decrease. Although this may not be true, there is a high possibility.
Summary:
Earlier this year, the price of oil was very expensive and did not show any sign of lowering. As a result, 30 airline carriers have been bankrupt and more are expected to take place later on this year. But things are starting to look brighter because oil prices have recently started to drop shortly after those bankruptcies. Therefore, the beginning of this gloomy event for airlines ended up being an advantage for airline companies to make profit. Now, many old planes are being replaced with more fuel efficient ones.
Chapter Two Connections: Supply and Demand:
This article made a connection with chapter two’s supply and demand concept. When the price of oil was high, many airline companies were making very little profit or in some cases, losing money. This is in fact a supply problem rather than a demand one because the supply of oil went up so there are more tickets supplied. Another reason this is a supply question is because the cost of oil is so much that the airline companies are forced to either charge their customer to pay for fuel surcharges and have less sales or charge the tickets regular price for more sales. If they decide to charge the consumers more, this would move the supply curve to the left because there would be less tickets sold due to the increase in price. However, not charging the consumer would move the supply curve the the right because less there would be more tickets sold at a lower price. Since this is a luxury for most people. this is elastic. Although you may think that it is a necessity for all business people to take the plane, it really is not because the CEOs make the decision of travelling to somewhere else when they really do not need to. The bottomline is that it is not a necessity for the majority of the people.
Personal Reflection:
I agree that building fuel-efficient airplanes could make airline tickets more inexpensive; therefore, creating more of a demand of airline tickets. However, the oil prices right now are fluctuating quite a bit and may rise at anytime. Therefore, by the time they build their airplanes, the oil prices may be as high as before (especially in the current recession). As a result, the demand for airline tickets may be very low if the price of oil shoots up. If I were in their positions, I would wait until the price of oil settles before proceeding in constructing fuel-efficient planes. However, it is possible that airline companies are demanding for fuel efficient planes to be built or they would buy the used planes from the bankrupt companies. In order for the manufacturers to stay in business, they must build the fuel effcient planes. Since there are about 40000 workers working for this company, they must do as the airline companies say or all those jobs may start to decrease. Although this may not be true, there is a high possibility.
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