Group items tagged

This article mainly focuses on China's economic growth and its fast approach to what could put it's economy in an equilibrium state."The rate, the spot rate and future rate, determined by the market supply and demand, basically are very close to the equilibrium rate," said Zhou Xiaochuan, governor of the People's Bank of China. He also warns that at this time China is trying to maintain low prices and if external governments begin to have inflation problems this could potentially create problems for China's economy. This comment was a directly linked with China's exchange rate against the US dollar, an issue that has yet to be addressed.

Felix Baumgartner from Austria recently jumped from 128,000 to simultaneously break the sound barrier, and world records. To get there he rode in a 55 story balloon with around $100,000 worth of Helium gas. This is an extremely large one-time purchase, and I would think that it upset the market equilibrium by a considerable amount.

This article is about how energy regulator Ofgem warns about how there will be energy shortages by 2015 unless the market can be reformed to reach an equilibrium.

The article I chose describes the housing price in the UK. It only changed very slightly so you could say that the housing price stayed stable. This means that the people living in the UK are willing to pay the same amount for their house and are able to do so. The market for houses is in equilibrium.

After Sandy hurricane devastated the Eastern Coast of the United States, gas became scarce. Due to this, authorities introduced so called odd-even gas rationing which limited the consumption the same as when governments introduce price ceilings and shift the demand curve to the last. With few major differences. Too many people needed fuel to power generators. Government gave subsidy to oil importers, so price slumped a bit (not significant) - so this was the maximum price. Simultaneously, also the demand grew bigger and there were only a few gas stations operating and those who were operating experienced inevitable chaos. So authorities shift the demand curve to the left until equilibrium is reached at maximum price to limit the consumption, so that queues were manageable. This rationing ends tomorrow as recovery is completed.

I think this article is good, because it shows both negative and positive externalities. Negative because the outcome of eating a lot of junkfood is something no government likes, and it eventually has a backlash on them because people can't work as well and the general health in the country drops. Because of this they want to make people eat less, and they could to it with a tax to change the equilibrium. This would make the quantity demanded closer to that wanted from the government. (In the article they did it by banning 16-ounce softs drinks) Can you see the positive side?

This article addresses the point of how politicians play a very important role in the model of circular flow of income model. They represent government sector in it and banning the use of lights under certain conditions conferred by the decree of French government is a way how to shrink leakages which belong to government spending and to move national economy more towards equilibrium where leakages equal to injections.

The article talks about topic covered already in the title, with some interest to the growth of industry of southern euro-zone countries and exacerbation of German and French production. So obviously, here I can refer to PPF where resources (also human capital) are being used more efficiently; here is the movement inside existing frontier or perhaps even outward shift with improved quantities and qualities of goods (especially capital). Nevertheless, economists still fear the euro-zone might fall in recession again if there are two quarters of consecutive fall (if the economy contracted). The market clearing price of many durable goods can be determined only to some extent, due to the presence of outside disturbance (fiscal and banking crisis - therefore always introducing new policies and bail-out deals). Another thing associated with the previous sentence and the article is the price mechanism (interaction of demand and supply) which allocates resources. Under unstable circumstances which are currently taking place in euro-zone, incomes are plummeting (falling GDP per capita) except for some particular periods of time when the economy meets actual growth, meaning that there is less demand leading to an inverse effect for producers. Normally, producers wish to supply more at higher prices, especially if income of people soars so they buy more of that goods. Therefore, higher prices do not present an incentive for producers to produce more. All the producers want to increase their producer surplus; but the trend is clear - towards maximized community surplus, since producers depend on consumers' utility.

Europe cut the channels that were made in Iran, therefore all of the people that were connected to the Eutelsat Communications won't be able to view channels made by the IRIB. The consequence of this will be an excess in demand, since all of the Iranian people that lived in Europe will demand channels broadcasted in Iran but there is not going to be supply for it. In addition to this, there is going to be less demand for the European satellite since the Iranians will search for other company that broadcast Iranian channels.

This article talks about the increase in demand of gold and the amount of price paid to get gold between 2010 and 2011. The demand of gold increased by 11% from the first quarter of 2010 to the first quarter of 2011 while the price increased by 40%. The increase in demand directly increases the supply of gold because if people want it, the rate of mining would increases so that gold is available at all time. Also, the amount of money spent on the gold would also increase because gold does not grow and one day gold would finish. The people who sell the gold would therefore put additional money on the price of the gold to get their own profit. This process would however continue because every time gold is found, the amount of gold left in the earth reduces. This allows the seller to always increase the price of the gold which means that there can never be a balance between the price and the demand. As the demand of gold increases, the price of gold decreases and the amount of gold left on earth decreases. Looking at the chart in the article, we can see that if the demand of gold increases the supply of gold would also increase but there was a slight decrease in the years 2007 to 2009. The article states that 'China's total annual gold demand topped 700 metric tons for the first time ever last year and is expected to keep rising over the next decade'.

This shows how the trade deficit is increasing in the UK, which will disturb the equilibrium (Balance of payment).