Source:http://in.reuters.com/article/fundsNews/idINL451337720090604?pageNumber=1&virtualBrandChannel=0
Summary:
On June 4th, 2009, an amendment regarding foreign investors to be able to own Iraqi estate was passed through parliament. Foreigners will be able to invest in land for only housing projects. Investors will only be able to sell land and property after the project is complete. In this war-torn country of Iraq, the government plans to encourage foreign capital to rebuild after years of conflict. Iraq hopes to have about $500 billion of foreign capital by 2015 with millions of new houses. The government of Iraq hopes foreign investors does not worry about violence after years of conflict. The violence has fallen since last year.
Connection:
The connection between this article and the textbook is foreign ownership. In the textbook, foreign ownership is defined as investment by foreign residents in a country’s assets and financial securities. Although in our textbook talks about only foreign investments in Canada, we can use the same analogy to foreign investments in Iraq. In the textbook, foreign ownership is split into two categories: foreign direct investment and foreign portfolio investment. The article of allowing foreigners to invest in Iraq can be described foreign direct investment. Foreign direct investment implies managerial control of a business by persons in a foreign country. Like Canada, having foreign ownership brings upsides to the country’s economy. This would help the Iraq’s economy in create employment, access to capital, and outward orientation. Three of these benefits are described in the textbook as the few of many benefits of foreign investment.
Personal Reflections
After the years in war, the country is trying to rebuild itself. It is time for the Iraqi government think ways to prosper its country. Because Iraq’s economy is known for only oil export, they try to turn their estate into money. I agree this is a great way to allow investors from out of the country to create money flow in the economy. However, it might be hard to attract foreign investors since there is still continuous violence in Iraq. In addition, you can only make investments in house projects. This might not be appealing as building factories which big corporations in foreign countries would like. All in all, I believe the Iraqi government has made a stepping stone to rebuild Iraq to a prosperous country.
Saturday, June 6, 2009
Friday, April 17, 2009
Chapter 8: Stabilization Policy
Source:http://www.cbc.ca/canada/nova-scotia/story/2009/04/01/ns-minimum-wage.html
Summary
In Canada, provincial governments are thinking ways of stimulate the current recession. One of the ways to help the economy is to increase the minimum wage. On April 1st, 2009, Nova Scotia’s minimum- wage earners are getting a raise. The new provincial rate is up to $8.60 per hour. Before the increase, it was $8.10. The provincial government said this will be the first of the three increases in the minimum wage over the course of a year and a half. In the fall of 2010, the minimum wage should be raised to $9.65 per hour. Statistically, the number of people working for minimum wage in Nova Scotia has gone up in the past few years.
Connection
The connection between this article and the textbook is wage control. The minimum wages are controlled by the provincial governments. The increase of wage would encourage people to spend more in this economy. The effect of this would be price ceilings. This would result in shortages in the marketplace. Eventually, the demands for goods and services would increase over time. Thus, the increase of goods and services would help our economy. The minimum wage increase helps the economy’s inflation on prices.
Reflection
Having this increase of minimum wage helps many people cope through this current recession. The two dollars increase helps people with the price inflation in the country. For a university student, the increase means an extra $6 a week from a part-time job at a campus convenience store. This would help the student pay the monthly bus pass which costs $45. However, this wage increase would hurt owners. Since there is a wage hike, there are also increase prices from fresh produce to electricity. This would add burden on the owners to pay a higher wage. I believe this wage increase would help the economy, even though some owners would be affected.
Summary
In Canada, provincial governments are thinking ways of stimulate the current recession. One of the ways to help the economy is to increase the minimum wage. On April 1st, 2009, Nova Scotia’s minimum- wage earners are getting a raise. The new provincial rate is up to $8.60 per hour. Before the increase, it was $8.10. The provincial government said this will be the first of the three increases in the minimum wage over the course of a year and a half. In the fall of 2010, the minimum wage should be raised to $9.65 per hour. Statistically, the number of people working for minimum wage in Nova Scotia has gone up in the past few years.
Connection
The connection between this article and the textbook is wage control. The minimum wages are controlled by the provincial governments. The increase of wage would encourage people to spend more in this economy. The effect of this would be price ceilings. This would result in shortages in the marketplace. Eventually, the demands for goods and services would increase over time. Thus, the increase of goods and services would help our economy. The minimum wage increase helps the economy’s inflation on prices.
Reflection
Having this increase of minimum wage helps many people cope through this current recession. The two dollars increase helps people with the price inflation in the country. For a university student, the increase means an extra $6 a week from a part-time job at a campus convenience store. This would help the student pay the monthly bus pass which costs $45. However, this wage increase would hurt owners. Since there is a wage hike, there are also increase prices from fresh produce to electricity. This would add burden on the owners to pay a higher wage. I believe this wage increase would help the economy, even though some owners would be affected.
Tuesday, March 31, 2009
Chapter 7: Money and the Canadian Banking System
Source: http://business24-7.ae/articles/2009/4/pages/31032009/04012009_62c23946551f442db3c4d0beac4ea75c.aspx
Summary:
In the midst of recession, all parts of the world are facing financial problems. One of the financial problems is in the banking industry. This article explains that deposit insurance helps ease the flow of credit. In another words, many financial institutions has gotten deposit insurance to boost depositors’ confidence about the safety of their deposits. Many people who deposit their money to institutions are having second thoughts in depositing their money because some financial institutions closed down. Hence, depositors must be confident in depositing money to banks so they are able to lend out the deposits to people are in need to borrow money.
Connection:
The connection between this article and the textbook is deposit insurance. In the textbook, deposit insurance is defined as insurance on the deposit liabilities of chartered banks and other financial institutions. If a Canadian bank, trust company, and mortgage loan company becomes insolvent, the Canada Deposit Insurance Corporation would be able to return the principal with no interest back to the depositor. If a financial institution does not have deposit insurance, many depositors might not feel secure to deposit the money. Also, as banks invest or lend money that is deposited with them, a sudden withdrawals lead to high risk of bank runs. This would helped by deposit insurance.
Reflection
I believe this would help the banks in the current recession. If I was to deposit my lifetime money, I must be confident in the bank I deposit it into. Having deposit insurance would help infuse confidence. I believe it can help pervade investor’s confidence in this recession. This would help the banking and financial system. In a economic decline, people are more conscious about their money. They have to be assured that their money is safe to deposit the money. In addition I think it is a plus for banks to have deposit insurance since they can avoid bank runs.
Summary:
In the midst of recession, all parts of the world are facing financial problems. One of the financial problems is in the banking industry. This article explains that deposit insurance helps ease the flow of credit. In another words, many financial institutions has gotten deposit insurance to boost depositors’ confidence about the safety of their deposits. Many people who deposit their money to institutions are having second thoughts in depositing their money because some financial institutions closed down. Hence, depositors must be confident in depositing money to banks so they are able to lend out the deposits to people are in need to borrow money.
Connection:
The connection between this article and the textbook is deposit insurance. In the textbook, deposit insurance is defined as insurance on the deposit liabilities of chartered banks and other financial institutions. If a Canadian bank, trust company, and mortgage loan company becomes insolvent, the Canada Deposit Insurance Corporation would be able to return the principal with no interest back to the depositor. If a financial institution does not have deposit insurance, many depositors might not feel secure to deposit the money. Also, as banks invest or lend money that is deposited with them, a sudden withdrawals lead to high risk of bank runs. This would helped by deposit insurance.
Reflection
I believe this would help the banks in the current recession. If I was to deposit my lifetime money, I must be confident in the bank I deposit it into. Having deposit insurance would help infuse confidence. I believe it can help pervade investor’s confidence in this recession. This would help the banking and financial system. In a economic decline, people are more conscious about their money. They have to be assured that their money is safe to deposit the money. In addition I think it is a plus for banks to have deposit insurance since they can avoid bank runs.
Sunday, March 8, 2009
Chapter 6: Determination of National Income
Source: http://www.the-news.net/cgi-bin/google.pl?id=1000-1
Summary
The European Central Bank has announced a record low of 1.5 percent in interest rate. It was a half a percent drop. By this, The Bank of England hopes to stimulate the recessing economy. It has been the 5th cut in the last 6 months. By this summer, some analysts are predicting an interest rate cut to below one percent. Not only has the Bank of England announced a cut, the Bank of Canada has also declared a half percent cut too. These interest rates are both record low for the two major banks. The low interest rates are hope to encourage the public to spend money in the economy.
Connection
The connection between this article and Chapter 6 is disposable income and interest rate. With the record low interest rate cut to 1.5%, Bank of England hopes this would influence the consumers to borrow money. In order for companies to buy new equipment, many businesses are forced to borrow money. If the interest rates are low, it encourages borrowing; therefore, increases the level of investment spending. In addition, the cost of borrowing is less and the opportunity cost of not saving is also less. Home owners in Europe can have more disposable income from this cut after making their mortgage repayments. If you look at the current recession, people’s amount of savings is greater than the amount of investment. Hence, this would cause the GDP to decline and to not balance.
Reflection
In the current condition of the economy, many countries are thinking ways to stimulate it. European nations are trying to influence businesses and consumers to spend their money. Lowering the interest rates is one of the ways to help the nation’s economy. I believe there is an effect of expectation factor which is causing the level of consumption to decrease. Many people are having household savings instead of investments. This affects the circular flow of money, resulting in a recessing economy. Overall, I agree in lowering the interest rates to encourage the public to spend their money. With people spending their money, the economy will hopefully turn around.
Summary
The European Central Bank has announced a record low of 1.5 percent in interest rate. It was a half a percent drop. By this, The Bank of England hopes to stimulate the recessing economy. It has been the 5th cut in the last 6 months. By this summer, some analysts are predicting an interest rate cut to below one percent. Not only has the Bank of England announced a cut, the Bank of Canada has also declared a half percent cut too. These interest rates are both record low for the two major banks. The low interest rates are hope to encourage the public to spend money in the economy.
Connection
The connection between this article and Chapter 6 is disposable income and interest rate. With the record low interest rate cut to 1.5%, Bank of England hopes this would influence the consumers to borrow money. In order for companies to buy new equipment, many businesses are forced to borrow money. If the interest rates are low, it encourages borrowing; therefore, increases the level of investment spending. In addition, the cost of borrowing is less and the opportunity cost of not saving is also less. Home owners in Europe can have more disposable income from this cut after making their mortgage repayments. If you look at the current recession, people’s amount of savings is greater than the amount of investment. Hence, this would cause the GDP to decline and to not balance.
Reflection
In the current condition of the economy, many countries are thinking ways to stimulate it. European nations are trying to influence businesses and consumers to spend their money. Lowering the interest rates is one of the ways to help the nation’s economy. I believe there is an effect of expectation factor which is causing the level of consumption to decrease. Many people are having household savings instead of investments. This affects the circular flow of money, resulting in a recessing economy. Overall, I agree in lowering the interest rates to encourage the public to spend their money. With people spending their money, the economy will hopefully turn around.
Friday, February 20, 2009
Chapter 5 Economic Indicators
Source: http://www.gravenhurstbanner.com/article/129257
Summary
In the business world, everywhere in the world is expected to have a recession. However, in Muskoka is unexpectedly doing pretty well. The unemployment rate has dropped more than two per cent between January 2008 and January 2009. This town in the central of Ontario has an unemployment rate of 5.4%. Ontario’s unemployment average is about 7%. The Gravenhurst economic development officer, Lance Sherk, expects the unemployment rate to decrease more because there is large number of building projects in process and is in need for workers. In addition, there would be a job fair held at the local sports stadium. It features 43 employers. Some employers are hiring about 25 or more positions.
Connection
The main connection between the textbook and this article is unemployment rate. To be unemployed, one must be out of work, but also must be actively looking for work in the last 4 weeks. The unemployment rate is defined as the percentage of the labour force that is not working yet is still looking for work. People who are available to work are also classified as unemployed. To calculate unemployment rate, use this formula:
Unemployment rate = Unemployed/ Labour force
In this article, it states that in Muskoka, Ontario, the unemployment rate is at 5.4%. One of the main reasons why the unemployment rate is low because there are many building projects which helps the local economy.
Reflection
I think that this article gives a great example to tackle the current recession. If governments invest more in big projects like infrastructure building, this would create more job opportunities. If there are more job openings for the unemployed that means consumers have more confidence in spending. As a result, the economy would be going up. I believe that our city of Vancouver should also follow Muskoka’s way to turn the economy around. I believe extending our Skytrain to Coquitlam is a great way to help the economy. Moreover, it would be a greener way of transportation from Coquitlam to downtown Vancouver. Instead of building a new bridge, we can expand bridges for cyclists and pedestrians. That way, it would help our city promote as an environmental friendly city.
Summary
In the business world, everywhere in the world is expected to have a recession. However, in Muskoka is unexpectedly doing pretty well. The unemployment rate has dropped more than two per cent between January 2008 and January 2009. This town in the central of Ontario has an unemployment rate of 5.4%. Ontario’s unemployment average is about 7%. The Gravenhurst economic development officer, Lance Sherk, expects the unemployment rate to decrease more because there is large number of building projects in process and is in need for workers. In addition, there would be a job fair held at the local sports stadium. It features 43 employers. Some employers are hiring about 25 or more positions.
Connection
The main connection between the textbook and this article is unemployment rate. To be unemployed, one must be out of work, but also must be actively looking for work in the last 4 weeks. The unemployment rate is defined as the percentage of the labour force that is not working yet is still looking for work. People who are available to work are also classified as unemployed. To calculate unemployment rate, use this formula:
Unemployment rate = Unemployed/ Labour force
In this article, it states that in Muskoka, Ontario, the unemployment rate is at 5.4%. One of the main reasons why the unemployment rate is low because there are many building projects which helps the local economy.
Reflection
I think that this article gives a great example to tackle the current recession. If governments invest more in big projects like infrastructure building, this would create more job opportunities. If there are more job openings for the unemployed that means consumers have more confidence in spending. As a result, the economy would be going up. I believe that our city of Vancouver should also follow Muskoka’s way to turn the economy around. I believe extending our Skytrain to Coquitlam is a great way to help the economy. Moreover, it would be a greener way of transportation from Coquitlam to downtown Vancouver. Instead of building a new bridge, we can expand bridges for cyclists and pedestrians. That way, it would help our city promote as an environmental friendly city.
Wednesday, January 21, 2009
Chapter 4: Government in Canada
Source:
http://economictimes.indiatimes.com/International_Business/Canada_cuts_lending_rate_to_historic_low/articleshow/4010197.cms
Summary
In the heights of our global recession, the Bank of Canada has dropped lending rates to a historic low of one percent. By this action, the government of Canada hopes it would stimulate the economy. It is the third interest cut made by the Canadian central bank since the recession began. In addition, Canadian economists believe the Gross Domestic Product (GDP) would be dropping about 1.2 percent this year. Some of the factors are exports of trades are down and the domestic demand is shrinking. Fortunately in 2010, Bank of Canada expects the Gross Domestic Product to spring back and grow up to 3.8 percent.
Connection
The link between this article and the fourth chapter of the textbook is Gross domestic product (GDP). GDP represents the value of all the goods and services produced in Canada in a given year. Economists from banks estimates in the year of 2009, the Gross Domestic Product will drop by 1.2 percent. However, it would grow by 3.8 percent in 2010. The percentage of GDP can be also seen as the total government net debt. Net debt is the gross debt minus recorded assets. If the net debt declines, percentage of GDP increases. If the net debt increases, percentage of GDP decreases. In our current recessive economic situation, economists are expecting the Canadian federal government to have a larger debt than the past few decades. By this, the Gross Domestic Product would decrease.
Reflection
I believe the Canadian central bank cutting the lending rate will do little effect to stimulate the economy. With the lending rate cut, banks expect people would be attracted in borrowing money. In the present recession, the economy needs consumer to spend their money. However, the consumer’s confidence is still low. This is because many big companies are affected hard by the recession and has layoff many employees. Instead of dumping taxpayer’s money into the economy like the United States, I believe Canadian government should invest more in building infrastructure. In short term, more jobs are created and money is spent on something. In long term, there will be an infrastructure used like a bridge.
http://economictimes.indiatimes.com/International_Business/Canada_cuts_lending_rate_to_historic_low/articleshow/4010197.cms
Summary
In the heights of our global recession, the Bank of Canada has dropped lending rates to a historic low of one percent. By this action, the government of Canada hopes it would stimulate the economy. It is the third interest cut made by the Canadian central bank since the recession began. In addition, Canadian economists believe the Gross Domestic Product (GDP) would be dropping about 1.2 percent this year. Some of the factors are exports of trades are down and the domestic demand is shrinking. Fortunately in 2010, Bank of Canada expects the Gross Domestic Product to spring back and grow up to 3.8 percent.
Connection
The link between this article and the fourth chapter of the textbook is Gross domestic product (GDP). GDP represents the value of all the goods and services produced in Canada in a given year. Economists from banks estimates in the year of 2009, the Gross Domestic Product will drop by 1.2 percent. However, it would grow by 3.8 percent in 2010. The percentage of GDP can be also seen as the total government net debt. Net debt is the gross debt minus recorded assets. If the net debt declines, percentage of GDP increases. If the net debt increases, percentage of GDP decreases. In our current recessive economic situation, economists are expecting the Canadian federal government to have a larger debt than the past few decades. By this, the Gross Domestic Product would decrease.
Reflection
I believe the Canadian central bank cutting the lending rate will do little effect to stimulate the economy. With the lending rate cut, banks expect people would be attracted in borrowing money. In the present recession, the economy needs consumer to spend their money. However, the consumer’s confidence is still low. This is because many big companies are affected hard by the recession and has layoff many employees. Instead of dumping taxpayer’s money into the economy like the United States, I believe Canadian government should invest more in building infrastructure. In short term, more jobs are created and money is spent on something. In long term, there will be an infrastructure used like a bridge.
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