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Home/ IB Economics SL LG/ Contents contributed and discussions participated by Jina K

Contents contributed and discussions participated by Jina K

Jina K

Mexico saw record $35 bln in foreign direct investment in 2013 - 2 views

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    Foreign direct investment in Mexico has increased 178 percent in 2013 from the the $12.7 billion seen in 2012. The increase in foreign direct investment was stimulated through economic reforms in industries ranging from telecoms to energy, which was pushed through Congress by President Enrique Pena Niet. The economic reforms has lured in many investors. Increase in foreign direct investment can help stimulate aggregate demand in Mexico, since there are an increase in capital inflows into Mexico. With an increase in aggregate demand, the country GDP can increase, and therefore contribute to economic development. The article also states that the investment was largely made into manufacturing sector. This could help contribute to research and development for machines or technology.
Jina K

Nigerian Export Promotion Council Plans Pre-Shipment Incentives to Boost Export - 0 views

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    The Nigerian Export Promotion Council plans to provide pre-shipment incentive grants to small and medium enterprises involving in non oil-exports to stimulate growth in these industries. The council aims to promote trade to where many Nigerians reside. Moreover, it aims to open offices in countries where Nigeria export to the most. The article shows the promotion of exports in Nigeria in order to help small and medium enterprises. This can then contribute to the level of economic growth in Nigeria. This policy focuses solely on small and medium businesses, therefore it should help lower to middle class entrepreneurs, ensuring equity.
Jina K

High crime rate hampering Caribbean economic development - UN Read more: http://www.ca... - 0 views

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    High crime rate has hindered Caribbean economic development, report the United Nations Development Program. 8.5 percent of human population resides in Latin America and the Caribbean, but 27 percent of crimes occur in that region. Corruption in the policies is one of the difficulties in trying to combat crime. Although insecurity and violence are not directly a part of the high development index, these situations may effect health indicators and may reflect the standard of living of the people in the countries. High rates of crime may reflect poor standard of living, such as people not having enough to feed themselves. This could be reflected in low human development index of Caribbean countries. Insecurity and violence certain affect the well-being of the people, both mentally and physically.
Jina K

B2.2 trillion infrastructure bill 'still alive' . - 0 views

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    The 2.2 trillion infrastructure bill in Thailand has been passed by the House of Representatives and the Senate and is waiting to be submitted for royal endorsement as soon as the Constitutional Court rules on its legality. If passed, the mega-project will improve Thailand's transport infrastructure, which includes high-speed trains and double-track railways. This development is a part of a physical capital factor, whereby the government aims to improve the social capital that is shared among the people in Thailand. Improved in transport will improve the welfare of not only the capital part of the city, but also the rural part of the city. This will ease the transport system of goods across the country and will create employment. Moreover, it can also promotes tourism.
Jina K

India-Asean trade pact on services unlikely during WTO meet - 0 views

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    The trading bloc presents in the article is the ASEAN trading bloc, which includes 10 nations. India and ASEAN are negotiating on a free trade agreement on services and investments. However, some nations of the ASEAN have not agreed on the agreement. The agreement, if implemented, will help boost movement of Indian professionals in the ASEAN region and it will increase more investments in services sector. This article is a great example of a trading bloc and how nations that are a part of the trading bloc must agree on an agreements. Here, India is not negotiating with all 10 nations instead of just one. Combining all nations help strengthen all nations economically.
Jina K

Japan Trade Deficit Widens as Imports Surge - 1 views

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    Japan's trade deficit increases in October as increase in imports exceed increase in exports to the US and China. Over the past years, weakening yen has helped promote exports, but also increases the cost for imports. The increase in cost for imports, such as crude oil, helped widen trade deficit. This shows the relationship between the current account and the exchange rate. Japan is currently going through a balance trade of goods and services deficit. This results in downward pressure on the exchange rate of the currency as there is an increase in the supply of yen due to increase in imports.
Jina K

Fall in imports curbs Lebanon's balance of payments deficit - 0 views

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    The fall of imports have reduced Lebanon's balance of payments deficit from $1,932.1 millions US dollars to $675.2 US dollars. Movement of imports and exports are the most significant variable affecting the balance of payments. The slowdown of Lebanon's economic activity results in lower imports and therefore lowering the deficits in the balance of payments. Imports to Lebanon is usually higher than its exports, but this had changed in 2013. Lebanon's exports of banking, educational and health services have increased. Deposit inflows had increased by 11 percent compared to last year. This article clearly relates to the Balance of Payments. Here, Lebanon's movement of goods in and out of its country pay a major role in determining the Balance of Payments. Obviously, these imports and exports are a part of the current account, which includes the balance of trade in goods (visible trade balance) and balance of trade in services (invisible balance). Lebanon sees an increase in services, which means that there could be an improve balance of trade in services.
Jina K

Thai Baht, Bonds Fall This Week on Amnesty Bill, Current Account - 1 views

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    Thai Baht has depreciated 0.6 percent to 31.305 per dollar in the previous weeks. This was the baht's weakest week in a month. This has been due to the recent political protests against the amnesty bill. Foreigners have been cutting holdings of the nation's assets in fear of instability. This shows how a demand for a currency can decrease due several factors, including political unrests. As foreigners fear that the nation future in terms of its economic performance is not stable, the demand for Thai baht decreased. People are more reluctant to invest as they fear the political unrests could lead to a fall in value for the assets.
Jina K

Thai Baht Climbs as U.S. Shutdown Cuts Dollar Demand; Bonds Rise - 0 views

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    Thailand's baht appreciated extending a rebound from last month's three-year low to 4 percent, as U.S. lawmakers' failure to resolve a budget issue decreased demand for the dollar. Thailand also sees an increase in exports shipments of 3.9 percent in August, allowing the country to see a current-account surplus of $1.3 billion for the month. This shows how currencies can appreciate as an effect of another country's depreciation. Here, we US dollar depreciating due to less demand for it. Moreover, Thai baht also increases, supported by a current-account surplus.
Jina K

U.S. trade official says to seek TPP deal by year-end - 0 views

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    United States proposed a Trans Pacific Partnership (TPP) with a goal of reaching a deal by year-end. The U.S. aims to discuss the trade deal with other nations during the World Trade Organization meeting. The TPP talks aim to establish a free-trade bloc that covers 800 million people, a third of world trade and accounting for 40 percent of the global economy. The goal is to promote remove trade protectionisms and also set standard for workers' rights, environmental protection and intellectual property rights. This article can be related to our topic this week as it involves trade protectionism. This TTP deal argues against protectionism measures as they believe the removal of protectionism will promote growth. For instance, Obama believes that more export will provide more U.S. jobs. On the other hand, opponents against the deal state that the deal will only provide multinational corporations powers against national policies in the name of free trade.
Jina K

RPT-UPDATE 1-China keeps 2014 import quotas for grains, cotton at this year's levels - 1 views

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    China, the world's top wheat and rice consumer, will issue the same tariff import quotas for grains and cottons in the year 2014 as they did in 2013. The wheat import quotas are at 9.6 million tones, corn at 7.2 million tones, rice at 5.3 million tones, and cotton at 894,000 tones. The low tariff-rate is 1 percent while grains imported without the quota allocation would be charged a 65 percent import duty.The tariff import quotas is imposed in the hope to help chinese farmers and to also levy high import duties on agriculture products. However, due to its agreement with World Trade Organization, China is still obliged to allow imports with lower duties. This article clearly connects to the topic of protectionism. Here, the Chinese government hopes to help its domestic agriculture industry by limiting imports. This imposition of quotas will lower the imports which would increase the amount of local production, therefore increasing more revenue for the domestic producers. Here, we can also see the role of WTO arranging trade among countries. Here the obligations create equality between China market and its import countries.
Jina K

Danish government lowers corporate tax - 0 views

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    Danish government aims to reduce corporate tax to 22% by 2016. It also aims to increase international competitiveness by offering tax credits, reducing energy tax and public investments. This amendments is implemented in the hope of stimulating growth and make it more attractive for foreigners to run a business in Denmark. Reducing corporate taxes allow companies to have more capital for investments. This could potentially increase factors of production. This wil give corporate incentives to produce more efficiently. In all, this policy can produce a shift in the supply curve to the right, giving positive supply-side benefits.
Jina K

Central Bank of Russia is to further cut interest rates - 0 views

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    Central Bank of Russia will continue to cut interest rates to 8% at which central bank lends to commercial banks. This target is to be completed in early May. This action is done in the hope to boost Russia's economy after a slow down. In addition, inflation rates are beginning to decline. Lower interest rates will lower costs of saving and thus encourage people to invest or get a loan to consume goods such as houses. This will move aggregate demand outwards and as well ad economy's potential output. This, in turn, will encourage economic growth. As such, this method can be classified as a part of an expansionary monetary policy or reflationary policy.
Jina K

IMF Official: U.S. Fiscal Policy Dragging on Economy - 0 views

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    The IMF, International Monetary Fund, points out that US's economy is likely to see a 1.5 or 2% growth without the tightening fiscal policies. IMF also points out that there is very low private demand in Great Britain. They suggest government to adjust its initial fiscal plans. We can see that this relates to the use of fiscal policies and their impacts. Here, we can notice that instead of boosting economic growth, US fiscal policies, which I believe is the fiscal cliff. The government's plan is to increase tax rates and decrease government spending. This could possible reduces income and slows the growth of the economy.
Jina K

Turkey's Economic Growth Slows Sharply - 1 views

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    Turkey's economic growth rate has decreased to 2.2% in 2012 after two years of rapid expansion. This is due to weak domestic demand and indirect effect of public expenditure from the European debt crisis. The GDP expanded 1.4% in the fourth quarter, half of the 2.7% forecast. The slow down in economic growth was largely due to Turkey's central bank tightened monetary policy implemented in 2011 and in early 2012 after Turkey's rapid expansion. This caused fear among the investors that the economy was overheating. Despite central's bank easing policies, Turkey still sees a slowdown in the rate of economic growth. We can notice that this slowdown in economic growth is largely due to decrease in investment.
Jina K

Real wages fall as inflation heads for 3pc - 0 views

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    UK expects an increase in the Consumer Price Index to 3pc by June 2013 and to remain above 2pc until early 2016. In comparison, wages are only expected to rise at an average of 1.5pc. This will put more pressure on household as they have already seen a higher cost of living, which has risen four times more than wages. The recent increase is a result from petrol prices and energy bills. The bank's aim has been at 2pc, but the Chancellor may change the mandate. Another interesting point is the Chancellor may change the target inflation measures to CPIH- includes housing costs- and RPIJ, which is an alternative way of calculating retail prices. This article obviously relates to inflation rate. We can see the use of CPI as a measure for inflation rate. We can see that inflation rate does affect people with high cost of living and also people which has fixed income. Here, although many people does not have fixed income, they are still affected by the inflation due to the slower increase in the wages. We can also see that in order to reduce inflation, it does not only involve the government, but also the banks of those countries.
Jina K

UK services sector growth eases triple-dip recession fears - 0 views

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    The article talks about Britain's key services factor showing a growth in output. The purchasing managers index (PMI) shows an increase from 51.5 to 51.8. A figure above 50 suggests that the sector is growing.This pust away triple-dip recession fears as figures show a 0.3% decrease in Britain's economy for the last 3 months of 2012. Confidence has increased for service companies, which contributes to more employment of the sector. Some economist suggests a brighter economy growth in March, but some economists are still reluctant to believe, stating that a triple-dip recession is still possible. This relates to business cycle as we can notice how several factors can contribute to the business cycle. Here, we can see that output for service facts are increase, though contradicting to output in manufacturing and construction factor. Service sector is the biggest of Britain's sector. This suggests that Britain is still in a recession or possible a trough. It has probably reached its lowest point, but hasn't yet emerged to a full recovery just yet.
Jina K

Singapore's labour productivity drops 2.6 per cent in 2012 - 0 views

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    Singapore's labour productivity- defined as average output per period of time- fell by 2.6 percent in 2012. This includes the manufacture sector, construction sector, and service sector. Only the information and communicators sector show a positive increase. Labour productivity has been decreasing continuously. In the fourth quater of last year, labour productivity fell by 2.5 percent, which is the fifth consecutive quater showing a decline. The numbers attribute to the slower economic growth in the past two years. The government has been trying to increase productivity in certain sectors that see the most potential increase. Not only that, nominal wages- wages not yet adjusted for inflation- shows a 2.3 percent increase. Unemployment rate is 2%. The article can be related to aggregate supply. If labour productivity sees a decrease, it is likely that aggregate supply falls as well since labour is one of the factor of production. If the country sees a fall in its output then this suggests a decrease in the growth of the economy or may even reflect in the country's GDP value. Not only that, an increase in wages will also increase firms' cost of production, and therefore contribute to a fall in aggregate supply. However, on a good note, its unemployment rate is at 2%, which is considered as quite a good rate. This may suggest a quite full working capacity of the economy.
Jina K

Spain Exports Rose to Record in 2012 Even as Recession Worsened - 0 views

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    The article does not talk about the whole aggregate demand, but rather focus on one component that contributes to aggregate demand. The article talks mainly about exports in Spain, contributing to its nation's economic growth. Spain's exports figures have increased despite the recession phase. The exports have broke a record of the least trade deficit since 1998. Exports increase to 222.6 billion euros in 2012 from 215.2 billion euros in 2011, which is the highest exports since 1971. Spain's trade deficit decreased 34% as imports fell 2.8%. This is due to changes in exchange rate and improvements in competitiveness. Apart from that, measures like labor law changes have improved investors' confidence.
Jina K

German economy to pick up this year: economy ministry - 0 views

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    The article talks about the overall German economy. The economy ministry states that although there is weak development in industrial output to the point where there is contraction the GDP during the fourth quarter of 2012, there are many signs that indicate the growing economy. He states that the economy has reached its lowest point already. The country sees a growth of 0.8 percent in industrial orders as there is an increase in euro zone. Furthermore, many surveys indicate that many businesses, investors, and consumers are becoming more optimistic. Data has shown that there is increase in exports, international trade, and as well as a decrease in unemployment. Contribute by a narrowed US trade deficit indicates an increase in global demand. This article can be related back to the business cycle. As you can see, by description, German's economy is in a trough phase and with evidences indicating that it is leading towards the recovery phase. This shows that there is a lowest point in the phase where the economy can not get any worse. There is a point that there is still consumption. We can also see that during the recession, GDP decreases, aggregate output decreases, aggregate demand decreases, and unemployment increases. This clearly reflects the business cycle.
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