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The Russian recession has caused sales for luxury goods to drop. Many companies that sell luxury or tourism goods have seen the demand for their product significantly decrease since the recession. This is because these products have a negative income elasticity so as income decreases so does the demand for these products. The demand for tour groups and hotels has also decreased because of the recession. Since all of theses products have a negative elasticity once the income of the buyers in Russia decreases then so will the demand for them.

This article discusses the impact of the Russian recession on demand for luxury goods. The recession has decreased the income and spending power of many Russians which has resulted in a decrease in a demand for luxury goods (clothing, jewelry, etc.) and services (airfare, hotels, etc.). The demand for luxury goods is very elastic. This is because luxury goods are not necessities and consumers can survive without them. These goods often have a reasonable number of substitutes. They also require a relatively high proportion of income to be spend on them and are used over a long period of time. The Russian recession has impacted firms across the globe but especially in Europe where Russian consumers account for a large percentage of customers.

One of the main things we talked about or that stood out to me was how the income of the indivisible affected demand of a good and it seems we all came to a consensus that luxury goods are most affected by changes in income. In the article a BMW car company speaks out it's total revenue has been decreasing as the economy is slowing down . Over the past 5 years China has been experiencing periods of economic downturn and car sales were declining drastically people were even canceling orders, however, increased government action led to a period of economic growth in the third year which increased sales by 4% or so. But things slowed down again this year and Song ( an owner of the company ) talked about how he had to cut prices even further from 4%- 20% just to increase consumer demand even though it only made a slight difference because people's income have decreased they can't spend as much money as they used to on luxury products such as BMW cars or multiple cars, they are now focused on saving money.

I agree that the demand for luxury cars has declined as a result of decreased economic growth in China. Shares of some luxury car companies have dropped by more than 30% in the last year while shares of an inexpensive compact car manufacturer have increased more than 20%. The demand for luxury cars is very elastic. These cars are a luxury, not a necessity. Luxury goods take up a relatively large proportion of income and are used over a long period of time. There are a relatively high number of substitutes for luxury goods. In China, customers are choosing to purchase inexpensive cars rather than luxury vehicles in order to save money.

The latest wealth report shows the distribution and development of wealth in Switzerland. According to the report, income and wealth increased in Switzerland in the past 10 years. Since 1998 the average gross income per household increased by 7%. From 2009 to 2011 the monthly average was at 9'565 Swiss Francs.

This article shows what the problems could be if the households/consumers/workers demanded higher minimum wages. On research in this article says it will decrease employment and give less incentive to the firms to HIREpeople and give them higher wages. However, another studies show that firms might cut back on some benefits for the worker, they might improve the productivity of the product. Moreover, the workers might as well work harder. And much more. The point is that the workers will do whatever it takes to have a high income. Thus it is possible to say that higher minimum wages could improve the economy because then, the national income will rise. And then this will increase the overall GDP of the country, leading to a higher economic growth.

The price of coffee has been going up and will keep at it but this doesn't seem to affect demand as demand is still increasing. Now quality is not affected by price. These can be based on the fact that the product is addictive and not many substitutes will suffice. Some even think of it as a ritual every morning.

I agree that coffee is inelastic because it is typically contains caffeine which is an addictive drug. People are addicted to coffee and depend on it as part of their daily lives. They cannot function without it, or are at least unwilling to. Therefore, consumers will continue to purchase coffee despite rising prices. Coffee drinkers also enjoy the last of coffee and are not willing to switch to other caffeine filled drinks such as tea or soda because they are not close enough substitutes. In fact, coffee consumption has actually increased despite rising prices. Consumers will not change their tastes unless prices become drastically higher.

i agree with the point that the change in qunatity demanded is not very significant. This is due to the fact the coffee is a habit forming good and addictive to most coffee addicts. However it also depends on the proportion of income spent on the good. Coffee prices can range from being dirt cheap at hawker centres to expensive at cafes like Starbucks. Hence even if the consumer is not a coffee addict, and only a small proportion of income ( if it is 'insignificant' ) is spent on the good, then a change in price will not affect the spending behaviour ; demand is price inelasic

GDP growth starts here. I chose this article because of one of the TOK questions we had this week it brings up education. Well this article talks about how education can lead to economic growth in many different ways. It doesn't just build up one sector it affects multiple, an interview has shown that people will need more than a high school education if they want to find a suitable job. If education standards increase so do income, technology , jobs all leading to an economic growth and I feel that this is actually even better because since it creates new things there is not chance of people losing jobs so employment is not at risk and as for inflation it will increase in the short run but level off.This research was done by Wössmann.

Overwhelmingly, more economically developed nations are states with a well-educated workforce. There is a clear and strong correlation between the educational attainment of a nation's workforce and economic productivity. Nations can build a strong foundation for economic success and shared prosperity by investing in education. Nations can increase the strength of their economies and their ability to grow and attract high-wage employers by investing in education and increasing the number of well-educated workers by improving the literacy rate. Investing in education is also good for the long run, since employees with higher incomes contribute more through taxes over the course of their lifetimes. Hence it can be concluded that investing in education , will definitely boost GDP maybe not in the short run but indefinitely in the long run.

A trend is shown where global interest rates gone "relentlessly downward over the past few decades". The rich are getting richer, leaving the rest of the group with less wealth. In addition to that, the rich have a "lower propensity to consumer", this has caused the aggregate demand to fall. It has been noticed that central bank rates have also "trended progressively lower". A conclusion has been made in the article that "as long as wealth and income inequality continue to widen, there will be a savings surplus."

This article, published by Fortune Magazine on October 3, 2015, describes how the decline in global commodity prices has led to economic problems in developing countries. Also, these falling prices have impacted sellers of valuable primary sector goods such as the Middle East's Gulf States, which supply oil to much of the world.

This article shows the government of Japan struggling to get Japan into a low inflation. taxes are increasing exponentially but all because of the recession. He tried to get more workers to work and reduce inflation. However, the money is losing its value because the Central Bank is printing too much currency. Therefore, the income of consumers is literally worth nothing.

Consumers are upbeat about the economy and their future income prospects, according to the University of Michigan's latest survey. The preliminary headline consumer sentiment index for November was 93.1. Economists had estimated a rise to 91.5 from 90, according to Bloomberg. This increase is likely to become evident in higher consumption, which will shift the AD curve right, thus increasing short term aggregate supply.

United Nations has launched a project in Malawi to discuss the goals of economic development. The goals are described as income equality, sustainability, and public support for all citizens.

This article describes how the events in Paris affected the economic growth. This illustrates how more factors than taxes and employment can make a difference in level of economic activity. A decrease economic activity might cause the government to intervene by reducing the interest rate, creating incentives to increase consumption. A demand-side policy like this could help the economy get back on its course.

Turkey has received an urban explosion that developed it's nations from a musty barren land to a trans-global hub. The technology has advanced, transportation, the environment is clearer as pollution levels have gone down. This was not something done overnight, Turkey had started implementing policies since the 1980s such as gecekondu. Today cities can produce their own revenues, have elected officials, and make their own deals with foreign nations. Yes, the standard of living and income has increased but there are disadvantages with this in the sense that the roads are congested. Less public transportation use. They have also been privatizing public areas which most citizens disagree was they areas are symbolic.

The article discusses the increase in the minimum wage and its effects on employment as the government struggles with the rise of inequality over the previous years. David Neumark an economist at university of california argues in his paper that a high minimum wage wage may not be effective in tacking poverty. Other impacts on the increase in minimum wage is higher productivity on the other hand labor is so cheap that there is less incentive to increase the wages. Higher minimum wages could boost the economy and if employers focused on high-skilled workers in the short term, that could boost productivity and the economy in the long term, eventually providing jobs for the low skilled.