The European Union.
Introduction At present the European Union is made up of 15 countries. This includes the UK, Rep. Pf Ireland, France, Germany, Denmark, Portugal, Spain, Sweden, Greece, Austria, Italy, Finland, Belgium, Luxembourg, and the Netherlands. All of these countries Except us, Sweden and Denmark belong to a single currency, the Euro. All these countries share the currency the euro, and it is thought to only be a matter of time until us, Britain, Sweden and Denmark join the Euro. The main debate in Britain at the moment is 'Should Britain join the Euro?' I am going to discuss the arguments for and against Britain joining the single currency. Currently Tony Blair had stated that in order for Britain to join the Euro it must pass 5 economic tests that will say whether Britain's economy is ready to be controlled by the European central bank. The 5 tests include:- * Test 1- Convergence * Test 2- Flexibility * Test 3- Investment * Test 4- Financial services * Test 5- Growth, Stability and Jobs At present Britain has not passed all of these tests but it is said to only be a matter of time until Britain does decide to join. The 5 Economic Tests . Convergence This test asks the question, "Are our business cycles and economic structures compatible so that we and others could live comfortable with the Euro interest rates on a sustainable basis?" Joining the Euro will mean that
The economic problem occurs when society has unlimited wants, yet limited resources available.
Economics Essay Assignment 1 By Debbie Guo The economic problem occurs when society has unlimited wants, yet limited resources available. This problem affects the economies of individuals, businesses and governments. Wants can be defined as materialistic desires of individuals or the community, which are desired because they give utility. Resources enable an economy to produce, and include the four factors of production: land, labour, capital and enterprise. These means fulfilling our desires are limited, so not all our wants can be satisfied with the limited resources available. Subsequently we must choose between them, and make choices in which our higher preference wants are given priority, and others are left unsatisfied. Whenever we satisfy one want, we are foregoing the opportunity of another alternative want. Therefore the real cost of fulfilling our want is not the money we pay for it, but the alternate want that we give up. This cost is known as the opportunity cost, or economic/real cost, as it is sometimes referred to as. Opportunity costs can be applied to the individual, business firms and the government. The economic choices of today affect tomorrow's economic outcomes. When we choose to satisfy a want today, another want may not be fulfilled in the future. There are different types of economies, which range between a market economy and
Should Britain join the Euro?
Geoff Campbell 11T Should Britain join the Euro? INTRODUCTION: There are a lot of differing opinions on this subject. I will try to determine whether it makes political and economical sense for Britain to "join the Euro". I have researched into the arguments for and against, then I will explain them and make my conclusion after weighing up each of the arguments. I will research using the internet and search engines to find many differing opinions from a variety of sources. I will also visit the websites of Labouri, the Conservativesii, the Lib Demsiii and the UKIPiv to find out about their policies regarding the Euro. Advantages of joining If Britain were to join the Euro, it would affect many Industries, Businesses and Economies in different ways, whether they are in Britain or not. One example of this is when Businesses' are heavily affected by transaction costsv - they are involved in lots of exporting and importing. For example take a company, which imports its goods. Before they can import these goods they must first buy them, in this case they buy raw materials from France they must first change their Pounds into Euros. This involves a transaction cost - the company must pay another company a commission charge as a percentage of the money exchanged. This loses the Business money and can add up, especially when done with large sums of money. Thus if Britain joined
Should the Uk Join the Euro?
SHOULD THE UK JOIN THE EURO? NIKKI ACTON 13JLB With the change over to the Euro notes and coins now complete across the "Euro-zone", twelve countries that have adopted the Euro as their currency, the debate over whether to adopt the single currency in Britain continues. There will be those who argue that the introduction of the single currency is merely the next logical step in the development of a truly single market, and that by joining, Britain would gain a voice in what could eventually become the world's most powerful economic zone. Others believe that a successful common market is not dependant on the adoption of a single currency, which they see as merely another irrevocable step towards the political union of Europe. But the main focus of the debate centres on the parameters of macro economic objectives. To start, I will discuss the arguments against the UK joining the euro The UK government has 3 major macro economic objectives and 2 on a slightly smaller scale: i) a high, but stable rate of economic growth within the UK's potential ii) high, but stable employment iii) low inflation iv) balance of payments equilibrium and v) fair and equal distribution of income. In order to balance these objectives, governments use policies to control various aspects of the economy, however, in the analysis that follows, it will be shown that the most important of these
Oversupply has caused the current problems in the coffee market - Discuss the solutions
Harpal Chima 12A Economics & Business Studies Oversupply has caused the current problems in the coffee market. Discuss the solutions Coffee is currently the second largest commodity market in the world behind oil. The market expands across the entire globe and its effects reach the developed and developing countries alike. Most cocoa beans are grown in the developing countries and have been done so for the past century but in recent times the cost of cocoa has rapidly decreased. As the price of the cocoa beans decrease it has caused large-scale problems in the market and oversupply of cocoa has caused this to a large extent. Oversupply has occurred in the market because of uneducated farmers increasing their amount of output. As the farmers notice the price of cocoa beans decrease they tend to think logically and decide by increasing there output they can sell more and thus get a greater amount of income. But as this continues there income continually decreases as oversupply hits the industry. Thus it can be said that oversupply is the main reason behind the problems in the coffee market. Although a minor scale factor to the problems in the market, by having a poorly educated workforce, it has led to oversupply thus it has had an effected the industry. As they
Assess the Significance of an increase in the size of the deficit on the Current Account for the UK economy
Assess the Significance of an increase in the size of the deficit on the Current Account for the UK economy A Deficit can be defined as ` the negative balance when expenditure exceeds income`. Therefore a deficit on the current account occurs when we as a country are either importing too many goods from abroad, or are not exporting enough, usually it is a mixture of both. The underlying cause of trade deficit includes high-income elasticity of demand from UK consumers, which leads to a high level of demand for imported goods and services. Because the overseas demand for UK exports rarely keeps pace with the surging demand for imported products, so the trade deficit widens when the economy enjoys a period of consumption-led growth. The strong sterling exchange rate has helped to reduce the UK price of imports causing an expenditure-switching effect away from domestically produced output. In technical terms, the high pound has improved the terms of trade between the UK and other countries, allowing us to buy and consume more imports with each pound we earn. The weakness of the global economy and in particular the very slow growth in the Euro Zone has damaged UK export growth. Nearly 60% of UK manufactured goods exports and over 50% of our exports of services are to fellow members of the European Union. UK trade balances have been affected by shifts in comparative advantage in
Analyse the Conservative approach to state intervention after 1979 and outline labours response since 1997
Analyse the Conservative approach to state intervention after 1979 and outline labours response since 1997 The Conservative Thatcherite, new right policies had two general aims as far as state intervention, those two general aims were a free economy (I.e. non interventionism) and a strong state. The Conservatives believed in minimum state intervention and therefore a small public sector. They were arguably the first pre-war government not to follow the first post war consensus. Although in reality the consensus came to an end in 1968 with an IMF bank loan, loaned on condition that there was to be a subsequent reductions in public spending, with the aim of bringing down the amount of money in the economy so as to lower the inflation rate. In practise though this abrupt end to Keynesian economics was for purely pragmatic and not ideological reasons. The first time that monetarist policies were implementing for purely ideological reasons was on the election of Thatcher's conservative government in 1979 In order to cut public spending to a minimum so as to allow for maximum personal freedom and minimum state intervention the conservative government of 1979 onwards embarked on a drive to privatise as many industries as the possibly could, including such companies as Rolls Royce, British Gas and British Airways. In the Conservative party manifesto of 1979 it says that the party
Option Pricing Models
Research Proposal Title: Option Pricing Models Introduction It is known that most of the option pricing models and techniques employeed by today's analysts are rooted in a model developed by Fischer Black and Myron Scholes in 1973. One basic assumption of BS model is that the stock price is log-normally distributed with constant volatility. However, Fama (1965) and Mandelbrot (1966) found that stock returns exhibit both fat-tailed marginal distributions and volatility clustering. These features are interpreted as evidence of stochastic volatility of financial asset prices. To overcome the shortcoming, many researchers have contributed to substantial new models that incorporate stochastic volatility in the last two decades. It is thus interesting to examine whether the stochastic-volatility option pricing models provide improvements to the BS model. During the past decade, researchers have begun to study generalized autoregressive conditional heteroskedasticitic (GARCH) models for option pricing due to the superior ability of this class of models to describe asset return dynamics. Duan (1995) developed a theory with respect to which options can be priced when the evolution of the asset return follows the GARCH process. Empirically, Duan (1996), Heston and Nandi (2000), Hsieh and Ritchken (2000), Hardle and Hafner (2000), Duan and Zhang (2001) and Christoffersen and Jacobs
Industry Analysis In the United States alone, the consumer/households industry contains hundreds of competitors and numerous more worldwide because the brand name consumer goods industry is one of the most expansive industries in the world. An economy of scale defines this industry because it is rather difficult to frequently come up with ideas for new products. The basis for competition in this industry is competing with price, quality of products, constant innovation, and firms selling effort. Main types of competitors are companies that range in numerous industries and function as companies made up of several different divisions. The competition in this industry is monopolistic with firms that are of almost equivalent size and power with similar influence over the market. Also, this is a mature industry with little differentiation between products and has a low switching cost to consumers. The companies consolidate their powers into certain areas of the industry such as: laundry and cleaning, paper goods, beauty care, food and beverages, health care, and pet food. The top power holders and rivals in this industry include Proctor & Gamble, Kimberly-Clark, Unilever, Henkel, and Johnson & Johnson.2 The household goods industry has to follow strict government regulations on the testing of products on animals, comply with FDA regulations on many products, as well
Using the sources and your own knowledge, to what extent were the government policies the main reason for sluggish economic growth between 1951 and 1964?
Using the sources and your own knowledge, to what extent were the government policies the main reason for sluggish economic growth between 1951 and 1964? In my opinion, the "sluggish economic growth" in the context of this period would be better termed as "relative economic decline". This suggests that Britain's economy grew 2.5% per year by the 1960s, however, at a rate far slower than its foreign competitors, such as, Germany and Japan. There are many factors that led to "relative economic decline" such as, poor industrial relations, large amounts of money spent on defences, government policies and the most important factor, a decline in industrial productivity. The most affecting factor leading to Britain's economic situation was low industrial productivity. This was caused by a sequence of factors, such as poor management and insufficient technology leading to poor industrial relations and strikes. This negative multiplier effect resulted in poor economic performance and low wages for workers. The low wages further enhanced the problems by increasing tension between workers and managers, which led to a greater frequency of strikes. Due to increased strikes, productivity was reduced, as most workers were too busy striking. Between 1960 and 1964 workers spent only 48% of their time at a machine. Overall the low productivity eventually led to "relative economic decline".