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AS and A Level: UK, European & Global Economics
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How to evaluate effectively in economics
- 1 A significant proportion of marks are likely to be for evaluation. Trigger words include ‘assess’, ‘to what extent’ and ‘evaluate’. Evaluation can come during a piece as well as at the end. It includes any critical distance you add to your points.
- 2 Stating both sides of an argument or different points of view e.g. advantages and disadvantages will give you a start. Try to group them rather than a list of each. This will score more evaluation marks as you are linking the two arguments.
- 3 Discussing the long term versus the short term effects is a good method of evaluating. Don’t be frightened to acknowledge that it may even be too early to say with certainty what the outcome will be. An example of this is the impact of the UK not being in the Eurozone.
- 4 If you have made several points, you can gain evaluation marks for prioritising them or just saying which you believe is the most significant and why.
- 5 How significant will a particular point be and will it affect different groups of people in different ways. Discuss these for evaluation marks.
Five things to know about exchange rates
- 1 Most exchange rates are ‘floating’. This means that the value of one currency expressed in terms of another currency varies according to the demand and supply for and of each currency.
- 2 Factors affecting the demand for a country’s currency are the demand for the goods and services of it, the demand of its citizens for imported goods, relative interest rates and speculation. If for example, UK interest rates are relatively high, then people will buy pounds to save in UK banks. This will increase the value of the pound.
- 3 Exchange rates affect the competitiveness of a country’s products. Remember the acronym SPICED – Strong Pound Imports Cheaper Exports Dearer.
- 4 A strong pound will be worse for UK producers as they will struggle to compete with cheaper imports and UK exports will look relatively more expensive abroad. It will however be useful to reduce domestic inflation.
- 5 A weak pound will help UK producers for the opposite reason but may lead to inflation. It will help the balance of payments subject to the Marshall Lerner condition (learn this and use it for evaluation).
What is globalisation?
- 1 Globalisation refers to the increasing integration of the world’s economies meaning more international trade, increased international flows of capital, shifting patterns of consumption and production across countries e.g. outsourcing production.
- 2 Many reasons are put forward for its growth and it is hard to differentiate between its causes and effects. Is the growth of multinational companies and their desire for greater profits a cause of globalisation or its effect?
- 3 Other reasons put forward for globalisation are the reduction in trade restrictions, growth of the internet, cheaper international transport costs, opening up of China and the old communist countries. Again they could be cause or effect.
- 4 The effects of globalisation are debatable (more evaluation opportunities). Generally it is seen as increasing the level of wealth as countries specialise more in the products in which they have a comparative advantage.
- 5 Recent economic uncertainty has lead to some talk of de-globalisation where international trade declines due to increased protectionism (tariffs and quotas).
Globalisation could be seen to significantly affect developing economies, such as Ghana and Egypt. For example, according to statistics, there has been a rise in these countries in manufacturing employment and a fall in primary sector employment. Nevertheless, on the other hand, globalisation has resulted in implications for developing countries. For example, and largely on account of a loss of international competitiveness over a long period of time, British manufacturing has declined relative to that of other advanced capitalist countries, shown by the fact that the U.K has lost more manufacturing jobs than any other European country between 1971 - 1989 (Champion, 1990), a trend that has continued in the subsequent decade.
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Globalization has had both positive and negative effects on a local, national, international and global level. Globalization often brings benefits at one level which cause negative effects at another, these results and the scale at which they manifest are often uncertain and unpredictable. The very nature of its unpredictability causes instability and introduces risks to all actors involved (many of these actors unwillingly). The economics of globalization is very relevant in understanding how processes work and how it affects other issues.
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The result is assurance of equal world trade. It is furthermore responsible that the WTO agreements including its annexes are carried out, governed and executed. It should be a forum in which multilateral trade negotiations take place as well as the resolution of disputes. Another important duty is to review the trade policies and exertions of the WTO member states.2 The WTO is best described as an umbrella organisation under which the agreements that came out of the Uruguay Round of multilateral trade negotiations are gathered.
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To what extent were the years C1925-1929 a time of economic and political stability for the Weimar Republic?
Five billion dollars was invested into Germany. As a result from foreign funding Germans economic situation improved, by 1929 the export performance was 40% higher than it was in 1925. Trading gave Germany more independence and stability rather than relying only on loans from other countries. Foreign investment successfully gave Germany a starting point for economic stability. The working class benefited most from the success that came 1925 to 1929 as trade unions were successful in winning obvious rises to their real wages.
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The Muslim influence is revealed in the more than 700 mosques and historic buildings found throughout the city. Dhaka is separated into an old city, the new city, and many residential and industrial communities. 1 By the definition globalization represents the increased mobility of goods, services, labour, technology and capital throughout the world. 2 Translational corporations produce and process variety of merchandise in different countries, and then sell them to consumers all around the world. This process supports the movement of money, progresses the exchange of knowledge, ideas, cultures, and so on. Bangladesh is known to be one of the poorest countries in the world.
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The nobles also had mixed fates after emancipation. Before, many were in large debts, and the liberation meant that they could clear these debts and start fresh, but many failed to do so. With their means of survival gone - the serfs - and now unable to finance their serfs for additional funds, many nobles almost collapsed, but there were those whose lives took a turn for the better. In the Ukraine and Georgia, many nobles entered the trade successfully and began new, secure lives. The new found independence with steady profits was a welcome change for those who industrial skills supplied with a source of income, independent of the peasantry.
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Import quota is a type of protectionism or trading barrier to protect the income domestic producers. The diagram below demonstrates the effect of the quota. From 0 - qD, the goods are produced by the most efficient domestic producers, lower than the world price. However imports flow in at P2, as world price is cheaper. Due to the import quota, only a certain amount of goods can be imported, i.e. qD - Qq. Hence the supply curve reverts to the domestic supply curve.
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What is meant by the problem of ' international debt'? Discuss the main policies that a country can use to reduce the problem of international indebtedness (i) in the short run and (ii) in the long run.
The country facing a BOP deficit must take actions to rectify it. It usually borrows money from other countries or international financial institutions. The accumulation of debt from loaning from abroad because of a recurring BOP deficit is known as international debt. International debt developed into a problem for many developing countries, Third world countries, which are the poorer countries of the world. These are countries in Africa, Asia and South America and they represent the largest group of countries in the world both in area and population, but the lowest in income and wealth.
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Interpol is an abbreviation for international police, which is the largest international police organisation.
It supports all organisations whose aim is to prevent and combat crime. It basically links police around the world to work together against world crime. Such things such as terrorism, drug related crimes and hi-tech crime all belong to Interpol's specifications. Under such vast circumstances it is hard to work and achieve its aims since its formation. From the beginning it was clear that Interpol was more of a west dominated organisation. In 1923 Executive director of the US National association of Chiefs of Police in a letter to the civil and constitutional rights of the US wrote how Interpol is not effective law enforcement and a threat to the privacy and safety of citizen's around the world.
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Today 1 out of every 5 persons on Earth is Chinese and this number is growing. Given China's immense population, it will be difficult for the state to ensure equal growth among its entire people. Another challenge the state will face in the next century is social unrest. As China's economy becomes more open, its people will also seek greater freedoms which will be compounded by foreign influences. Therefore, it will only become increasingly difficult for the socialist party to maintain its tight control over China in the ensuing years.
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The British buy so many tea and silk from China and just sell a little of cotton to China. It made the disbalance of trade. Britain lost money for every year. So in order to change this situation, British demanded China to open more trade port to do the trade. And also cancelled the Gonghong policy, let the British merchant do the free trade in China. But to China, traditionally China did not look trade as important. Because Chinese thought that they use agricultural to build the country. also Chinese thought that to trade with foreigners are the policy of favour to the foreigners.
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This continued until the late 18th century when new strategic realities altered the balance of power in the region. The British government signed a series of treaties to firm up its relationship with Oman and its leaders allowing them a commercial and financial freedom that other Gulf leaders could not hope to match. The Royal Navy provided a peace that allowed trade to thrive and the British Army helped prevent the coastal based leaders from being overthrown by tribes from the interior. Treaties of peace, friendship and navigation were constantly signed right up until 1951. 2.3 Although Oman was not a colony or protectorate, Britains involvement was very subtle yet powerful.
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gobalization, however, can be said to be centuries old. The first Homo Sapiens were nomads, travelling from one place to another; Indian tribes travelled ages ago from Mongolia to Northern America; products of the Inuit have been found at old sites from Australian Aboriginals; the story of Jesus has been told around the world from the beginning of our era. In other words: flows of people, products and symbols have existed for a very long time. The extraordinary thing in our globalising world is that dependencies within global networks are so great and interactions so dense that they form a sphere of themselves.
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In this report, I will be addressing the implications of the European monetary union and the problems Zeus will have in developing their market in Europe.
the transaction costs and the uncertainty involved in currency conversion. The removal of national currencies will encourage cross-border investment since the traditional reluctance of many investors to move their money into a currency other than their own will no longer be a factor. Businesses across the Eurozone will therefore be able to attract more investors from other Eurozone countries, and investment will be based on the competitiveness of a business rather than its nationality. This will increase the pressure on uncompetitive businesses to improve their efficiency. An increase in cross-border mergers and acquisitions will also lead to more streamlined and efficient businesses across the Eurozone.
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The answer is Foreign Direct Investment (FDI), which is a key 'engine of economic growth' (Jensen, 2003:587). According to Naylor (1999:129), the 500 largest MNCs are liable for approximately 80% of FDI flows worldwide. This means that in order to bring prosperity to their nations governments are obliged to create desirable conditions for operations of MNCs in order to attract and/or to make them stay in their country (Baylis and Smith, 2001:291). For many developing countries such as Sri Lanka and Mexico, whose political economies are orientated at 'export-led growth' and employment on corporate factories, the loss of a few majour corporations could undermine the whole economy and, consequently, its government (Dunning, 1993:362-369).
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This investigation will try to test the level of external debt and measure its impact upon the least economicly developed countries economy.
This strategy, based on a liquidity view, assumes that the crisis would be a temporary one. Proponents of a opposed solvency view supported that if similar rescheduling agreements continued, the Ecuadorian debt would be too large ever to be serviced, and that the only reasonable approach was to comprehensively search for alternative strategies that would reduce the external debt problem. Despite various agreements reached by Ecuador to reduce its external bank debt, ironically the country has experienced an increase in its total external debt, which provoked various economic, social and political problems.
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(Dewees, Klees 1995) Why is foreign trade so important to Brazil? Brazil, as with most LDCs, has a considerable foreign debt. The debt reached crisis point in the early 1980s. So the money earned from Brazil's exports was vital. It not only allowed Brazil to pay for its imports. It also helped to pay the interest and commission on the past debt. Study the tables and note the important changes since 1985 in the balance between the different sorts of imports and exports as well as the ups and downs of the trade balance.
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To maintain political stability, reinforce the total prohibition on Christianity and prevent 'subversive' Western ideas, the Shogunate adopted sakkoku (isolationism) from 1630, severing Japan's connection with the world. The result was that foreigners were permanently ejected and Japanese themselves were not permitted to leave the country or build ocean-going ships. Trade with Europe however continued, albeit limited to annual contact with the Dutch on Dejima Island under strict surveillance in Nagasaki Harbour. Sakkoku consolidated power and removed short-term threat of foreign values but at the cost of widening the technological gap between Europe and Japan.
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Similarly, a greater reliance on technology has helped to characterise the nature of globalisation, with communication becoming increasingly effective and cost efficient. As such, international relations are enhanced, leading to greater freedom and opportunity to engage in trade. Globalisation is also aimed at increasing nations' terms-of-trade which is also addressed by individual economies domestically through microeconomic, monetary and sometimes budgetary policy to increase the volume of exports whilst simultaneously attempting to reduce the CAD. In this way, Australia's Gross Domestic Product is forecast to grow by 3.4 per cent during 2003-04.1 The movement of capital or intangible resources throughout the global economy creates interdependence and international relationships without direct government intervention; foreign investment is almost impossible to stop and 2.
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Why do countries trade? Explain the advantages of specialisation and free trade. Why do governments use protection?
Another reason that countries trade is to take advantage of specialisation and free trade. Specialisation refers to the division of labour in order to increase efficiency and quality of production, while free trade refers to the economic condition where there are no barriers to trade. The concepts of absolute advantage and comparative advantage allow for the most effective distribution of resources. Table 0.1 Machinery Clothing Country RU Q RU Q A 100 200 100 100 B 100 100 100 200 Where, RU = Resources Used; Q = Quantity of good produced Absolute advantage refers to the condition where one country is more efficient in producing a good when compared to another.
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As there is lot of campaigning is going on in context of Patent Cooperation treaty, and this campaigning is mainly done only to give more knowledge about the advantage of PCT. Whether it is beneficial or not, this can be identified by keeping the backdrop that our country is not a developed one like others American and European countries. The methodology adopted in this research is Secondary data. Researcher has mainly relied on the books which have been written down in the context of PCT, the websites, and also the seminar which had been held in Bangalore, organized by the 'NLSIU' and 'WIPO'.
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However, I don't think it's very useful because though Pinney is mentioned in the map there is no link to slavery. "The West Indian Fortune" by R. Rogers (1950) is more useful because it tells us that the places on the map are Pinney's plantations, furthermore alternative names are provided which make the plantations more personal. Together they support that Pinney owned plantations. The map is more reliable and because it's primary, despite the fortune being secondary the map confirms theses sites exist.
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These bring to light what the business can gain from trading internationally and also presents the bad effects that international trade bring with it. An organisation like Tesco will have to take these on board and then decide whether it is worth it. The advantages of International trade are: > Wider market therefore higher turnover > Choice has risen > More trade > Price competition > Quality of the product International trade brings with it all of these things. These can help an organisation immensely but at the same time it brings with it a lot more work and pressure.
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Products like coffee, tea and chocolate, that we in the north have come to depend on, are produced in the warmer climates of the south. The prices paid for these commodities have not risen in real terms over the last forty years, whilst the value of fertilisers, pesticides and machinery (imported from the rich countries) has increased substantially. Consequently many of the people who grow these crops are having to work harder and longer for less money. On top of this the market price of commodities frequently drops below the cost of producing them.
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Consider whether protection should be based on an economic basis only or whether other aspects of our society should be considered to be more important.Use suitable graphs and statistics to explain and support your arguments.
This is the ideal situation for consumers, but as a result of domestic producer pressure and paranoid treasuries, it is rare to find situations of totally free trade between countries. It is expected that Australia will do very well out of the FTA as the huge sized long protected US markets will be cast wide open to Australian producers particularly in the agricultural sector. Protectionism in it's own right may be considered a hindrance to the growth of the global economy, but when applied to specific case studies, the argument for the application of certain protectionist barriers is very strong.
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