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International Baccalaureate: Economics
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Another reason for the growth is the amount of goods, China is exporting. The Growth in GDP is one of the positive effects that the free market brought to China. Looking at the graph, we can tell that the GDP is increasing steadily. So in the future, I would predict it to continue like this however because of the ongoing financial crisis, I think the GDP will not grow a lot or maybe even decrease. Inflation has been one of the negative effects of China's transition to free market.
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Furthermore, the plan included large dividend tax cuts. A dividend tax is an income tax on dividend payments to the stockholders of a company. In addition to the above tax cuts, large estate tax cuts were proposed. The estate tax is unique to the United States, it is a tax imposed on the transfer of the 'taxable estate' of a deceased person. This tax proposal was overall of tremendous benefit to the rich; this will explained further later on. Stiglitz points out very clearly that this proposed tax cut plan was not designed to stimulate the economy.
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This is at least what Paul Krugman argues in his article "For Rich". In order to analyze the status quo to the fullest extent, historical comparisons must be explored, in particular, the first 'Gilded Age' in the early 1900's. During this time, there was a substantial growth in population and extravagant displays of wealth. Figures such as J.P Morgan, Andrew Carnegie and John D. Rockefeller are the epitome of this age. The economy was controlled and run by these robber barons.
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Changes in expectations/Consumer confidence: If people are optimistic about their economic future then they are likely to spend more money --> measured by "consumer confidence index" Investment (I): The addition of capital stock to the economy, investment is carried out by firms; it includes all goods that are made by people and are used to produce other goods or services such as factories, machines, offices, or computers --> there are two types of investment: a. Replacement Investment: When a firm spend on capital in order to maintain the productivity of their existing capital b.
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I will use 3 terms to explain the law of diminishing returns, total output, average output and marginal output. The total output is the total product generated by the factors of production. The average output is the total output divided the number of units of the variable factor of production, which in this case are workers. Finally the marginal product is the change in total output when an extra unit of the factor of production is employed (worker).
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This has a negative effect on the population, since some people can not afford anymore to buy the amount of tortillas they used to; and many are in fact in a situation of poverty, and the rising prices of such a preliminary food has altered this. Since the producers of corn now want the companies that use corn to make other food to pay higher prices, then the companies have to put higher prices on their products. For example, if a farmer is now asking 50$ for 10 kg of corn, to a company, that same company to make a profit, will have to sell the cereals at a higher price.
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By giving aid to colleges and their students, some of whom are tied to terrorists, they are funding terrorism. This is the same case with the cities, foreign cities get aid from the U.S., foreign citizens get aid from the aid receiving cities, and terrorists get aid from the citizens. My question is, why would the strongest nation in the free world give foreign aid to countries that are using it to harm the U.S.? The U.S. says that they are giving money to help these countries out of poverty so that they may eventually, in turn help us with numerous items such as war, trade, weapons, and knowledge, not to mention riddance of poverty would support global economics, but the United States will gain none of the desired outcomes if the aid is not helping.
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One way for these countries to head towards economic development is by 'making educating girls a priority'. Making separate schools in places where girls and boys are educated separately is one solution. It is believed that by building girls' schools, the education gap can be eliminated to a great extent. Policymakers can strengthen the incentives for parents to send their daughters to school by setting the no-fee policy. However, in economics, nothing is for free. There is always someone or something that pays for it. A no-fee policy may be brought about by taking a portion of the people's taxes.
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For example, in the prisoner's dilemma, each player has a dominant strategy. Payoff- In any game, payoffs are numbers which represent the motivations of players. Payoffs may represent profit, quantity, "utility," or other continuous measures (cardinal payoffs), or may simply rank the desirability of outcomes (ordinal payoffs). In all cases, the payoffs must reflect the motivations of the particular player. R�wnowaga Nasha (ang. Nash equilibrium) jest to profil strategii teorii gier, w kt�rym strategia kazdego z graczy jest optymalna, przyjmujac wyb�r jego oponent�w za ustalony. W r�wnowadze zaden z graczy nie ma powod�w jednostronnie odstepowac od strategii r�wnowagi.
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They are negative for society and usually occur due to people trying to save money. Therefore social costs are basically: Private Costs + External Costs. They arise from the production or consumption of a good/service. If we were to add the external costs to the example of private costs a car owner has it would be: the fuel and oil, maintenance, depreciation, and even the amount of time the owner of the car spent diving it (the Private Costs) and as well as the cost experienced by people other than the operator who are exposed to the congestion and air pollution resulting from the use of the car (the external costs).
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and whilst the rest of the world is consuming the French have seen their purchasing power diminish (France's rank regarding its GDP per capita has slipped from 7th to 17th over the past 25 years). The French have lost confidence in their government and the government has lost power over them: violence in the banlieues (minority inhabited city suburbs) along with constant and massive unorganized strikes (only 7% of the French employees are members of a worker's union) has created a situation of social unrest and has cost millions to the economy.
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A fall in interest rate will also increase consumer confidence which will probably lead to increased purchase of goods. A fall in interest rate has also relieved those people who currently have mortgage payments as they are the mostly affected by interest rate changes; thus, a fall in interest rate will lead to increased consumption as those consumers will save more money on mortgages to spend on other goods and services. The new low interest rate is expected to lead to increased investment- the additional of capital stock to the economy by firms), as it's cheaper to borrow money.
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Although this regulation, China Eastern continued the price war by still giving these huge discounts which were meant to provoke counterattacks from other airlines. Firms usually want to determine prices to maximize profits and one option is predatory pricing. Predatory pricing means that firms cut prices below costs to drive out competitors. As soon as firms have driven out competitors, obtained a bigger market share, they raise the prices again. Costs D LRAC1 P1 LRAC2 P2 Q1 Q2 Q Fig1 Predatory pricing Predatory pricing makes the industry more concentrated, because there a fewer firms in the market.
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Fiscal Policy is generally the preferred means to stimulate the economy as money is directly injected into the money supply of the economy. However, the Indian government doesn't have the capability to base the country's economic revival on fiscal policy due to large fiscal deficits. India has chosen to primarily use monetary policy, which is most effective in controlling an expansion rather than encouraging it. This is because the central bank can effectively force banks to cut lending but can't make banks lend out excess reserves or investors to borrow more money in recessions.
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Take off theory- allows rapid growth in a short period of time. Growth leads to profits-> profits are re-invested-> create capital and productivity-> per capita income spurs ahead (examples Mexico after 1940, US 1850, Japan 1910, England 1800's) 2. Backwardness hypothesis. Less advanced country can move toward advance by borrowing technology and specialist. 3. Balanced growth- Countries tend to growth same rate whether advanced or otherwise Issues in economic Development: 1. Balance between industry and agriculture 2. The role of outward orientation 3. The risk of overspecialization 4.
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A scrappage scheme in Germany - which offers car owners �2,500 (�2,263) for getting rid of any vehicle over nine years old - has attracted more than half a million buyers, with sales soaring 40% there in March. The SMMT estimates that 280,000 Britons would take advantage of a similar programme over an 18-month period. This would cost around �560m, a figure the SMMT told the Guardian would involve a net cost of �150-160m. The rest of the money would come from the VAT charged on new cars.
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For example, if you clean the house, your work will not be included in the country's GDP, but if you hire a cleaning company, it will increase the GDP of the country, even though the outcome is the same. LEDCs do not provide accurate GDP for anyone to compare; the value of the work they've done is only estimated and are usually undervalued. Hidden market or the black market do not record their transactions and report to the government because it involves illegal activities such as drug trafficking.
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profits at the expense of economic efficiency and the welfare of consumers. This is also the argument being made in the article about the merger of live nation and Ticketmaster. They will have the power to muscle out smaller businesses and become a global monopoly on ticket sales. They could achieve this through economies of scale. This new merger can develop economies of scale with a higher output and a lower price than what other firms can achieve due to their experience and pre-established expertise in the field.
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Examples for such goods are roads, streetlights, education, public libraries etc. NHS (National Health Service) is a public good and government organization. It is a service that is 'free at the point of delivery' because society pays for it indirectly through taxes. The NHS provides free healthcare to society, this is especially beneficial for the low income group sector of society thus making it a public good. The demand for this service is high, as healthcare is very expensive in the private sector. As the law of demand states that when the prices increase demand decreases.
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I say unto them that believe so, woe unto you. This is why. Leaders in this school of thought have failed to appreciate the role of uneconomic factors in bring about the credit crunch. Vices that seem to be bred by capitalism such as corruption, greed, selfishness and lack of respect for human life are also bred by our cultural beliefs and cultural organization (De Soto, 2000). Capitalism as we know of it today puts us different from where we would have been without it. Big corporations such as Microsoft and Coca Cola as the best examples of the achievements of capitalism among many others have literally revolutionalized life in its entirety.
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Thus , the marginal social cost of production is greater than the marginal private cost. The marginal social cost is equal to the marginal private cost plus the external costs. We can clearly see from the diagram that the marginal private costs for the firm are lesser than the marginal social costs. Thus, there is a cost to the society which is caused by the pollution of the river due to the industrial waster generated by the firm. This may result in diseases like Jaundice , Cholera in the community and may hinder local tourism.
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Such high pricing of the oil was caused by a sharp increase in demand1. For example USA has about 5% of the world's population, but consumes about 25% of the oil supply. Global demand of oil is increasing due to a variety of reasons like strong economic growth of China, India and other developing countries are encouraging consumers to purchase cars increasing demand of oil, The industrialized world is also expanding, people are purchasing bigger cars and homes that consumes more energy.
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income, the quantity of a good demanded increased by 25%, therefore the income elasticity of demand would be : 25%/10% = 2.5 (ii) the price elasticity of demand for visits to the cinema is -2.3 Price elasticity of demand is defined as the meausre of responsiveness in the quanity demanded for a good as a result of change in price of the same good. Namely, it is percentage change in quantity demanded as per the percentage change in price of the same good. In economic terms it is a mesaure of the sensitivity of quanitiy demanded to changes in price.
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Generally products such as sports wear, food, house products tend to have elastic demand whereas products like oil have inelastic demand since there are very few substitutes for it. The necessity of the product and how widely the product is defined also affects the PED of a good. If we take food as an example it is a necessary product and food is very important to our lives so it is inelastic. However if we define food more deeply (chicken, beef, pork etc...), the demand would become less inelastic since there would be substitutes.
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With this system there is no way that Mali will have a huge economic growth for a while. Limited infrastructure also hampers development prospects. For example when transportation and road systems are poor many people would not be able to gain education. A next key barrier to growth and development is international financial barriers and one of the major problems to growth and development in developing countries is 'Indebtedness' in other words it is the amount of debt repayments the LEDC countries have to make on money that was borrowed in the past.
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