Source : http://www.myfoxatlanta.com/dpp/news/local_news/Bartering-Sees-Comeback-with-Businesses-20110511-am-sd
Summary:
This article mainly discusses about how the traditional barter system is once again being seen on the market very frequently. Small businesses have put the barter system into great usage and is not only bearing through the economy but also earning many profits. Furthermore, an interview was scheduled with small business owner Joe Cox, questioning about his methods of taking advantage of the barter system. Joe stated:""I get all my landscaping done, painting at my shop, gutters, dental care, I get all my basic necessities - prescription glasses." Experts say the key to bartering is finding the right network for you.
Connections:
The barter system is one of the topics we have covered in this chapter. It is a method of exchange by which goods or services are directly exchanged for other goods or services without using a medium exchange (money). The reason why money was created later on in the economy was so that people will put a value to it, and use it as if it was worth something. But in the article, people have seemed to found that the barter system (traditional way) was a better way of doing business in the economy nowadays.
Reflection:
I feel like we should take into precaution that people are bringing back the old ways of exchanging goods or services with one another. This could be a very big factor for a decrease in the value of our Canadian dollar. People tend to use the barter system as an escape of paying for the taxes as well, because if you just exchange services without using money, then you don't have to pay for any taxes.
Sunday, May 15, 2011
Tuesday, May 3, 2011
Smart(phone) Money
1. How long do you think it's going to take to get to all virtual cards? How many years? (1 point)
Why? (1 point)
For our society to replace everything inside a physical wallet into a digital wallet definitely won’t be a short process however it shouldn’t be that much longer for the next generation to get used to and adapt to it. For instance, our parents’ generation prefers CDs and DVDs while our generation is perfectly fine with things in the digital format (such as songs stored in Mp3 players). As of putting this amount of time needed into numerical format, I believe it should take around aprroximately 10-18 years in order for everything to be replaced. I chose this number because that is probably the amount of time it would take for the next generation to grow up to an age where they are old enough to handle “virtual cards” and all the digital formats that people are inventing nowadays.
2. Who will not be on board with this new virtual wallet? (2 point)
I think the older generation probably won’t be on board with this virtual wallet because like mentioned above, they are the ones who preferred using CDs and DVDs, and they probably will also be the ones who would rather prefer the tactile experience of a currency holder over the convenience of a digital alternative. Just like printed books and newspapers, although we have online/digital books and newspapers, there are still those who prefer a daily purchase of newspaper.
3. What companies are going to be affected negatively by this? Name 3 (3 points)
The companies that are going to be affected negatively would be Mastercard companies, Interact, american express, etc. People will be using mastercards (credit cards), interact (debit cards) way less frequently than before because everything will be replaced with NFC (Near-field communications). As the demand for these cards go down, the companies would therefore make a lot less.
4. which industries are going to make money from this? Name 3 (3 points)
Cell phone carrier companies (telus), wireless internet companies(shaw), and any places that produces the virtual cards would be benefiting greatly from this change. Aside from all those, branded smartphone companies such as Blackberry, Apple, HTC, etc would be making big bucks from this operation. If everything goes as planned and the virtual cards idea receives wide acceptance, the usage of smartphones would increase tremendously creating a great demand for them.
Article: http://business.financialpost.com/2011/04/23/smart-phone-money/
Why? (1 point)
For our society to replace everything inside a physical wallet into a digital wallet definitely won’t be a short process however it shouldn’t be that much longer for the next generation to get used to and adapt to it. For instance, our parents’ generation prefers CDs and DVDs while our generation is perfectly fine with things in the digital format (such as songs stored in Mp3 players). As of putting this amount of time needed into numerical format, I believe it should take around aprroximately 10-18 years in order for everything to be replaced. I chose this number because that is probably the amount of time it would take for the next generation to grow up to an age where they are old enough to handle “virtual cards” and all the digital formats that people are inventing nowadays.
2. Who will not be on board with this new virtual wallet? (2 point)
I think the older generation probably won’t be on board with this virtual wallet because like mentioned above, they are the ones who preferred using CDs and DVDs, and they probably will also be the ones who would rather prefer the tactile experience of a currency holder over the convenience of a digital alternative. Just like printed books and newspapers, although we have online/digital books and newspapers, there are still those who prefer a daily purchase of newspaper.
3. What companies are going to be affected negatively by this? Name 3 (3 points)
The companies that are going to be affected negatively would be Mastercard companies, Interact, american express, etc. People will be using mastercards (credit cards), interact (debit cards) way less frequently than before because everything will be replaced with NFC (Near-field communications). As the demand for these cards go down, the companies would therefore make a lot less.
4. which industries are going to make money from this? Name 3 (3 points)
Cell phone carrier companies (telus), wireless internet companies(shaw), and any places that produces the virtual cards would be benefiting greatly from this change. Aside from all those, branded smartphone companies such as Blackberry, Apple, HTC, etc would be making big bucks from this operation. If everything goes as planned and the virtual cards idea receives wide acceptance, the usage of smartphones would increase tremendously creating a great demand for them.
Article: http://business.financialpost.com/2011/04/23/smart-phone-money/
Sunday, April 10, 2011
Great Depression Vs Current Recession
Questions:
1. How did the Great Depression start?
The Great Depression originated in the US starting with the fall in stock prices that began around September 4th, 1929 and became worldwide news with the stock market crash on October 29th, 1929, known as Black Tuesday.
2. How did the current recession start?
The demand for housing properties started increasing due to high liquidity and low interest rates on mortgage loans. People started buying homes using these loans not knowing that this would in return cause residential property prices to increase. The prices increased exponentially and people who already owned homes, opted for refinance at lower interest rates.
At the same time, Banks were lending mortgage loans to everyone who asked for it, considering the property price hike. On one hand, they would get their money back even if the borrower doesn't repay the loans and on the other hand the banks were selling their loan products to investment companies who packaged them into MBS and sold them in the open market. This resulted in the bank getting back almost their entire loan amount which they started lending to further subprime customers.
The usual explanations include numerous factors, especially high consumer debt, ill-regulated markets that permitted overoptimistic loans by banks and investors, the lack of high-growth new industries, and growing wealth inequality, all interacting to create a downward economic spiral of reduced spending, falling confidence, and lowered production.
3. How did the government take part following the event? Were /are they successful attempts?
The Government took part in the great depression by introducing employment programs to help employ numerous people that were greatly affected by the depression. They also increased the interest rates to maintain the worth of the US currency. However their efforts did not help the situation greatly, until WWII as they needed a substantial amount of people to be employed.
During the current recession, the US government had handed out bail-outs to several corporations most notably: AIG, General Motors and Chrysler LLC. However they didn’t offer a bailout to Lehman Brothers and as a result, they filed for Bankruptcy.
4. What factors are present now that were not present during the Great Depression? (ie. Banking, online resources, etc.)
What is present now that wasn’t present during the Great Depression is probably credit card payment methods. People are able to apply for a credit card at a bank and with this card they are given the priviledge to be able to not pay for the “amount owed” right away but to have an extended period of time to pay the “loan”. What is bad about this however, is the fact that a lot of people don’t end up having enough money paying for their credit card spendings due to overly high credit limits.
5. How did these two affect United States’ GDP?
In the times of both the Great Depression and the current recession, the United States GDP decreased drastically. Around the 1920s, the United States GDP peaked at around $1 trillion dollars. However, since they were in a depression, the dollar value went down. Many people lost their jobs due to a decrease in the consumer behaviours. As a result of all these events happening, they contributed to the low GDP of United States of $600 billion. The United States lost over $400 billion during the Great Depression.
Same with the current recession, it has dropped the United States GDP, decreasing its dollar value.
6. Reflection: In your own words, tell me which one has made more of an impact on the world.
I believe the Great Depression in the 1920s has made a bigger impact on the world because at that time, no one was ready for this to happen. No one knew how to respond to such a great event that changed United States overnight. But as the years passed, the country has learned to cope with the consequences, therefore, if anything like this was to happen again, the people and nation would have more preparation instead of getting hit all of a sudden with the Great Depression and going into a mess.
Sources:
http://answers.yahoo.com/question/index?qid=20080220160718AAeaThR
http://wiki.answers.com/Q/How_did_your_current_recession_start
http://en.wikipedia.org/wiki/Recession
http://en.wikipedia.org/wiki/Great_Depression
http://www.actionplan.gc.ca/eng/feature.asp?featureId=18
1. How did the Great Depression start?
The Great Depression originated in the US starting with the fall in stock prices that began around September 4th, 1929 and became worldwide news with the stock market crash on October 29th, 1929, known as Black Tuesday.
2. How did the current recession start?
The demand for housing properties started increasing due to high liquidity and low interest rates on mortgage loans. People started buying homes using these loans not knowing that this would in return cause residential property prices to increase. The prices increased exponentially and people who already owned homes, opted for refinance at lower interest rates.
At the same time, Banks were lending mortgage loans to everyone who asked for it, considering the property price hike. On one hand, they would get their money back even if the borrower doesn't repay the loans and on the other hand the banks were selling their loan products to investment companies who packaged them into MBS and sold them in the open market. This resulted in the bank getting back almost their entire loan amount which they started lending to further subprime customers.
The usual explanations include numerous factors, especially high consumer debt, ill-regulated markets that permitted overoptimistic loans by banks and investors, the lack of high-growth new industries, and growing wealth inequality, all interacting to create a downward economic spiral of reduced spending, falling confidence, and lowered production.
3. How did the government take part following the event? Were /are they successful attempts?
The Government took part in the great depression by introducing employment programs to help employ numerous people that were greatly affected by the depression. They also increased the interest rates to maintain the worth of the US currency. However their efforts did not help the situation greatly, until WWII as they needed a substantial amount of people to be employed.
During the current recession, the US government had handed out bail-outs to several corporations most notably: AIG, General Motors and Chrysler LLC. However they didn’t offer a bailout to Lehman Brothers and as a result, they filed for Bankruptcy.
4. What factors are present now that were not present during the Great Depression? (ie. Banking, online resources, etc.)
What is present now that wasn’t present during the Great Depression is probably credit card payment methods. People are able to apply for a credit card at a bank and with this card they are given the priviledge to be able to not pay for the “amount owed” right away but to have an extended period of time to pay the “loan”. What is bad about this however, is the fact that a lot of people don’t end up having enough money paying for their credit card spendings due to overly high credit limits.
5. How did these two affect United States’ GDP?
In the times of both the Great Depression and the current recession, the United States GDP decreased drastically. Around the 1920s, the United States GDP peaked at around $1 trillion dollars. However, since they were in a depression, the dollar value went down. Many people lost their jobs due to a decrease in the consumer behaviours. As a result of all these events happening, they contributed to the low GDP of United States of $600 billion. The United States lost over $400 billion during the Great Depression.
Same with the current recession, it has dropped the United States GDP, decreasing its dollar value.
6. Reflection: In your own words, tell me which one has made more of an impact on the world.
I believe the Great Depression in the 1920s has made a bigger impact on the world because at that time, no one was ready for this to happen. No one knew how to respond to such a great event that changed United States overnight. But as the years passed, the country has learned to cope with the consequences, therefore, if anything like this was to happen again, the people and nation would have more preparation instead of getting hit all of a sudden with the Great Depression and going into a mess.
Sources:
http://answers.yahoo.com/question/index?qid=20080220160718AAeaThR
http://wiki.answers.com/Q/How_did_your_current_recession_start
http://en.wikipedia.org/wiki/Recession
http://en.wikipedia.org/wiki/Great_Depression
http://www.actionplan.gc.ca/eng/feature.asp?featureId=18
Wednesday, April 6, 2011
Chapter 6 - Aggregate Demand
source: http://www.worldnewsco.com/3150/food-prices-increase-44-million-people-risk-poverty/
Summary
Recent studies has shown that world food prices increase has caused 44 million people in developing countries at the brink of poverty, or already experiencing poverty. The result of food price increases has caused an reduction in nutritional intakes because poor people will be forced to consume foods that are cheaper and low nutrients. The price of corn is the food price that experienced the highest increase. Cornflour or cornstarch rose 73% and this is crucial for poor countries.
Connection
This is related to the topic of aggregate demand in Chapter 6 surrounding the factor of price. Price and price changes are likely to influence the level of consumer spending. Households may cut back in response to price increase, but in some cases they may increase spending in case of even higher price inflation. This particular event has caused many families to take a toll in their lives.
Reflection
I feel that action should be taken to cure this problem, whether it be avoid food export restrictions or increasing the investment in agriculture. But people going into poverty and at the risk of death is very scary. This would cause many families to become unhealthy due to not enough nutrition taken in daily. If people are running out of money and becoming poor due to food, then chances are no one is going to make any purchases of anything else. Therefore makes a down turn for the economy.
Summary
Recent studies has shown that world food prices increase has caused 44 million people in developing countries at the brink of poverty, or already experiencing poverty. The result of food price increases has caused an reduction in nutritional intakes because poor people will be forced to consume foods that are cheaper and low nutrients. The price of corn is the food price that experienced the highest increase. Cornflour or cornstarch rose 73% and this is crucial for poor countries.
Connection
This is related to the topic of aggregate demand in Chapter 6 surrounding the factor of price. Price and price changes are likely to influence the level of consumer spending. Households may cut back in response to price increase, but in some cases they may increase spending in case of even higher price inflation. This particular event has caused many families to take a toll in their lives.
Reflection
I feel that action should be taken to cure this problem, whether it be avoid food export restrictions or increasing the investment in agriculture. But people going into poverty and at the risk of death is very scary. This would cause many families to become unhealthy due to not enough nutrition taken in daily. If people are running out of money and becoming poor due to food, then chances are no one is going to make any purchases of anything else. Therefore makes a down turn for the economy.
Sunday, March 6, 2011
Underemployment is a raising issue
Summary:
The underemployed people are typically underutilized and underpaid workers earning a fraction of what they've earned in the past, even though they have years of demonstrated work experience. Usually they used to be either engineers, programmers, and managers who now work in grocery stores, book stores, or anywhere that has a low paying job position. The rate of underemployed people has gone up from Jan 2011 till now in the US, and this is a great measure of what the economy is really like. People who are underemployed cut their spending, which reduces demand and spins the economy further into a recession. The underemployed also negatively affect tax revenues and create more budget problems for governments. It is expected for the rates to improve eventually but this probably won't happen till another few years to come.
Connection:
After reading about three economic indicators for this chapter, unmployment being one of them, it's a very reliable one because it does not consider the underemployed. The underemployed have part-time jobs, or jobs that they are overqualified for, therefore they are never included in the unemployment rate calculation, making it inaccurate. Even though the enderemployment people already have jobs and are considered to be hired, they are usually full more capable of earning more than their current wages.
Reflection:
I think underemployment should really be fixed by the government as soon as possible. It's not fair for the people who are earning a lower wage than what they could be potentially earning and also, it's not helping out the economy in anyway either, other than destroying it.
http://www.suite101.com/content/underemployment-the-unseen-faces-of-the-recession-a350480
The underemployed people are typically underutilized and underpaid workers earning a fraction of what they've earned in the past, even though they have years of demonstrated work experience. Usually they used to be either engineers, programmers, and managers who now work in grocery stores, book stores, or anywhere that has a low paying job position. The rate of underemployed people has gone up from Jan 2011 till now in the US, and this is a great measure of what the economy is really like. People who are underemployed cut their spending, which reduces demand and spins the economy further into a recession. The underemployed also negatively affect tax revenues and create more budget problems for governments. It is expected for the rates to improve eventually but this probably won't happen till another few years to come.
Connection:
After reading about three economic indicators for this chapter, unmployment being one of them, it's a very reliable one because it does not consider the underemployed. The underemployed have part-time jobs, or jobs that they are overqualified for, therefore they are never included in the unemployment rate calculation, making it inaccurate. Even though the enderemployment people already have jobs and are considered to be hired, they are usually full more capable of earning more than their current wages.
Reflection:
I think underemployment should really be fixed by the government as soon as possible. It's not fair for the people who are earning a lower wage than what they could be potentially earning and also, it's not helping out the economy in anyway either, other than destroying it.
http://www.suite101.com/content/underemployment-the-unseen-faces-of-the-recession-a350480
Wednesday, January 19, 2011
Progressive/Regressive Tax - Chapter 4
source: http://www.vancouversun.com/news/progressive/3834122/story.html
Summary:
On November 16th, 2010, author Jean R. Macintyre reported on how Harmonized Sales Tax (HST) is hated not only because of the fact that it's one of the taxes required for citizens to pay but as well as the way it was introduced, who is paying it, and who is benefiting. The B.C. government brought in the HST even though they already said they wouldn't which caused a lot of controversy. Especially after citizens found out the money collected is not going to health care, education, any of the underfunded social services, but to big business corporations. The benefits were told to be eventually trickled down to us however people have been waiting for that from other taxes for the last two or three decades. HST is hated because it is a regressive tax not progressive.
Connection:
People may have different opinions on which taxing method would be more fair and equal depending on their own beneficial terms. The two types of taxes mentioned in the article were progressive tax and regressive tax. If the percentage of income paid in taxes rises along with income, it is referred to as a progressive tax. If the percentage paid in taxes declines as income increases, it is called a regressive tax. Usually people would agree that progressive tax is a more fair method because people pay equal sacrifices. A regressive tax does not necessarily mean that low-income people pay more taxes; they just pay a higher percentage of their income. Ex: $50,000 salary, compared to $10,000; 10% of $50,000 is $5000, and 20% of $10,000 is $2000. The lower income person is still paying a smaller amount, but the proportion of his/her income is bigger.
Reflection:
Being a Canadian citizen, I understand that taxes have always been a part of our lives. Even though I have never really supported the idea of taxes because it does make the purchase of a product a lot more expensive than it would have been without taxes. There are many more benefits that come along with them. Canadian governments are a lot more involved in its citizens lives compared to the U.S. We have health care, educational benefits, etc. The taxes we pay do eventually come back to us in the long run. Although i do strongly believe that the method of regressive tax should never be used because it would be unfair to those who have a lower income and already having trouble to make ends meet.
Summary:
On November 16th, 2010, author Jean R. Macintyre reported on how Harmonized Sales Tax (HST) is hated not only because of the fact that it's one of the taxes required for citizens to pay but as well as the way it was introduced, who is paying it, and who is benefiting. The B.C. government brought in the HST even though they already said they wouldn't which caused a lot of controversy. Especially after citizens found out the money collected is not going to health care, education, any of the underfunded social services, but to big business corporations. The benefits were told to be eventually trickled down to us however people have been waiting for that from other taxes for the last two or three decades. HST is hated because it is a regressive tax not progressive.
Connection:
People may have different opinions on which taxing method would be more fair and equal depending on their own beneficial terms. The two types of taxes mentioned in the article were progressive tax and regressive tax. If the percentage of income paid in taxes rises along with income, it is referred to as a progressive tax. If the percentage paid in taxes declines as income increases, it is called a regressive tax. Usually people would agree that progressive tax is a more fair method because people pay equal sacrifices. A regressive tax does not necessarily mean that low-income people pay more taxes; they just pay a higher percentage of their income. Ex: $50,000 salary, compared to $10,000; 10% of $50,000 is $5000, and 20% of $10,000 is $2000. The lower income person is still paying a smaller amount, but the proportion of his/her income is bigger.
Reflection:
Being a Canadian citizen, I understand that taxes have always been a part of our lives. Even though I have never really supported the idea of taxes because it does make the purchase of a product a lot more expensive than it would have been without taxes. There are many more benefits that come along with them. Canadian governments are a lot more involved in its citizens lives compared to the U.S. We have health care, educational benefits, etc. The taxes we pay do eventually come back to us in the long run. Although i do strongly believe that the method of regressive tax should never be used because it would be unfair to those who have a lower income and already having trouble to make ends meet.
Thursday, November 4, 2010
3D TV failed to ignite consumer demand
Summary
Recently, consumers have been invited to try out the 3D television effects but didn’t seem enthusiastic in purchasing one, although 52% did enjoy the experience of it. Because this is a new technology, the chances are that the price will be expensive and therefore not affordable to everyone. Also, the requirement of wearing 3D glasses at all times while watching television prevents many people from multitasking and causing inconvenience. It seems like one way to increase consumer demand in 3D television would be the breakthrough of technology when 3D glasses is no longer necessary to watch 3D effects. Most people mentioned that 3D viewing is probably best for special events like gaming, movies or watching sports. 3D TV fails to ignite consumer demand.
Connections
The factors affecting the demand of 3D television could be price, tastes and preferences, or expectations of future prices. Because it is a new technology being introduced in the market, the price would most likely be a bit too high and not affordable for most people. Therefore, causing less people having the urge to make a purchase since their television at home probably works fine anyway. 3D television hasn’t been exposed to the general public long enough to make a big impact in any sort of way which results in a lack of knowledge in the product causing consumers to be less interested. Usually when products are newly introduced, the market pricing would be more expensive. But as time passes by, better and more efficient technology would replace the original and cause the price to go down. Some consumers may be expecting a lowering in price in the future, therefore not making a current purchase.
Reflection
Being able to study the impacts of consumer demands towards manufacturer supplies and also factors influencing the way people purchase (demand) was insightful. I personally wouldn’t make a purchase of the 3D television reasons being one, if I had the urge to watch a 3D movie, I would go to the theaters, not only for the 3D effects but for the environment as well; two, I am not a sports fanatic, therefore with or without 3D while watching sports will not make much of an impact on me; and three, like mentioned in the article, wearing 3D glasses at all times watching television is a huge inconvenience, being the lousy person I am, I might misplace them and having to watch fuzzy TV till I find them again. Most people probably hesitate to make a purchase with similar reasons to mine. I strongly believe that the producers of 3D television should look further into these problems and come up with a solution.
http://www.cbc.ca/consumer/story/2010/09/10/con-consumer-3d-tv.html
Recently, consumers have been invited to try out the 3D television effects but didn’t seem enthusiastic in purchasing one, although 52% did enjoy the experience of it. Because this is a new technology, the chances are that the price will be expensive and therefore not affordable to everyone. Also, the requirement of wearing 3D glasses at all times while watching television prevents many people from multitasking and causing inconvenience. It seems like one way to increase consumer demand in 3D television would be the breakthrough of technology when 3D glasses is no longer necessary to watch 3D effects. Most people mentioned that 3D viewing is probably best for special events like gaming, movies or watching sports. 3D TV fails to ignite consumer demand.
Connections
The factors affecting the demand of 3D television could be price, tastes and preferences, or expectations of future prices. Because it is a new technology being introduced in the market, the price would most likely be a bit too high and not affordable for most people. Therefore, causing less people having the urge to make a purchase since their television at home probably works fine anyway. 3D television hasn’t been exposed to the general public long enough to make a big impact in any sort of way which results in a lack of knowledge in the product causing consumers to be less interested. Usually when products are newly introduced, the market pricing would be more expensive. But as time passes by, better and more efficient technology would replace the original and cause the price to go down. Some consumers may be expecting a lowering in price in the future, therefore not making a current purchase.
Reflection
Being able to study the impacts of consumer demands towards manufacturer supplies and also factors influencing the way people purchase (demand) was insightful. I personally wouldn’t make a purchase of the 3D television reasons being one, if I had the urge to watch a 3D movie, I would go to the theaters, not only for the 3D effects but for the environment as well; two, I am not a sports fanatic, therefore with or without 3D while watching sports will not make much of an impact on me; and three, like mentioned in the article, wearing 3D glasses at all times watching television is a huge inconvenience, being the lousy person I am, I might misplace them and having to watch fuzzy TV till I find them again. Most people probably hesitate to make a purchase with similar reasons to mine. I strongly believe that the producers of 3D television should look further into these problems and come up with a solution.
http://www.cbc.ca/consumer/story/2010/09/10/con-consumer-3d-tv.html
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