"Economics / Finance / Banking" Essays 141-210

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European Union Economy Issues and Policies Essay

… ¶ … country leave the EU or the euro zone?

This policy paper is for the attention of the Prime Minister of the United Kingdom, David Cameron. It explores whether the UK should depart from the European Union amidst the… [read more]

Communism to Capitalism: Vietnam's Economic Case Study

… 4 billion in 2001 to $6.4 in 2004 (Van Khai, 2005). As relations between the two countries continue to grow through efforts implemented by both to put behind the past and move into the future, it is expected that trade exports will increase to the United States. Efforts between the both include a joined effort to find the remains of soldiers lost during the war.

3. Some critics have argued that Cuba is more deserving of diplomatic and trade relations with the United States than Vietnam. What are some of the factors behind this argument?

Critics have argued that the embargo against Cuba has not resulted in the intended consequences that were expected when the embargos were first initiated in the early 1960s and that in order for the country to reform; they need encouragement with political and economic reform (Wall, 1994). Opposition has occurred with the United States government because they believe if the restrictions are lifted, Fidel Castro will continue his ways of government with no open elections and lack of human rights (Greenhouse, 1994). Being Castro is no longer considered a threat to the United States with the downfall of Communism; many see no reason not to reopen trade with the country, because they argue that by not doing so, we are only causing harm to the citizens of Cuba, and not Castro.

Works Cited

Greenhouse, Steven. "New Calls To Lift Embargo On Cuba." New York Times 20 Feb. 1994: 4. MasterFILE Premier. Web. 8 May 2012. Retrieved from http://search.ebscohost.com/login.aspx?direct=true&AuthType=ip, uid&db=f5h&AN=30375796&site=ehost-live

Van Khai, Phan. "Putting Behind The Past And Looking Toward The Future." Foreign Affairs 84.5 (2005): 1. MasterFILE Premier. Web. 8 May 2012. Retrieved from http://search.ebscohost.com/login.aspx?direct=true&AuthType=ip, uid&db=f5h&AN=18035092&site=ehost-live

Wall, James M. "If Vietnam, Why Not Cuba?" Christian Century 111.5 (1994): 155. MasterFILE Premier. Web. 8 May 2012. Retrieved from http://search.ebscohost.com/login.aspx?direct=true&AuthType=ip, uid&db=f5h&AN=9403174526&site=ehost-live… [read more]

Global Financial Crisis and the Banking Systems in Australia Canada and United States Essay

… Global Financial Crisis and the Banking Systems in Australia, Canada and United States

What common features of the banking systems of Australia and Canada might be behind the relative 'good' performance of both of these country's banks through the global… [read more]

International Labour Case Study

… France

Provide a statistical profile of your allocated country's labor market and present an overview of the most important trends and developments in this country's labor market over the past decade.

One cannot discuss the country's labor markets without discussing… [read more]

Economic Development Is a Key Term Paper

… System of incentivizing workers to increase productivity was also introduced.

(Chenery) in a comparative framework for assessing performance of China in comparison to other developing countries says that China has achieved the adequate industrial structure and investment structure of a… [read more]

Economics Is the Study of How Markets Essay

… Economics is the study of how markets work. It is based around describing the patterns and interrelations of the production, distribution and consumption of goods and services. Microeconomics is concerned with the economics of individual decision making. By understanding the rational for individual-level decisions, microeconomics helps to provide insight into the specific patterns of production, distribution and consumption that we see in society.

Two key points in microeconomics are the law of supply and the law of demand. The law of supply holds that all other things being equal, as the price of a good increases, supply of that good will increase. This is because producers can increase their profits, and produce more in order to do so. The law of demand holds that all other things being equal, as the price of a good increases, demand for the good will decrease. An important underlying factor in the law of demand is the concept of utility. Utility is the value that a consumer gains from a product or service. That value is often difficult to measure quantitatively, but is known qualitatively as utility -- what the consumer gets out of the bargain. Rational consumers will only purchase a product if the utility they expect to gain from that product exceeds the cost of that product. Thus, as the price of the product increases, fewer consumers will find that the product delivers more value in utility than the cost of the good. As a result, demand for the good decreases as the price increases.

The New Housing Market -- Factors to Consider

When we look at the new housing market, there are a number of different factors that go into a change in supply. Generally, supply is led by expected demand in the new housing market. Because of the high sunk costs, and the inability to move the finished product, developers only build when they expect to sell, so all three of those factors play into the supply decision. In addition, government action plays into the decision, since governments must license land for development. There is a balance between offering ample land for development (which developers like to see -- ease of access to a key input) and too much access to land, which risks market saturation.

The factors that have an impact on demand are perhaps more complicated. The prevailing price of new homes is important. This means that all the costs associated with a new home purchase are a factor, including interest rates. Indeed, interest rates are a key driver in new housing demand because of their impact on total purchase cost. New home sales fell, however, despite low rates, indicating that there are also other factors at work. One such other factor is the expected state of the economy. Home ownership is a…… [read more]

Government Subsidized Student Loans Thesis

… Higher education is taken to be a safeguard against unemployment with statistics indicating that unemployment among university graduates was 4.4% whereas for people who had not completed secondary school, unemployment was near 11.5%. (The Economist, 2011)

Although the phenomenon, with… [read more]

Financial Policy on Advance Medical Technology Essay

… Finance

There are a number of reasons for the company's need for additional financing. AMD has high levels of research and development spending, has expanded its sales force significantly and has focused on entering new markets. Thus, the company has… [read more]

Process of Economic Development Essay

… Economic Development

Role of Geography and institutions in economic development

Over the years, there have been debates on the role that geography of a nation or continent plays in contribution to the economy of a region. On one hand, there are scholars who argue that the geography of a location is central and plays a big role in determining the economy of a region and yet on the other hand, there are those scholars who argue that the economy of a region is mostly determined by the institutions that are within the population and how they are managed by the people in the management positions. Each side of the arguments have been quick to point out a few facts that are in support of their arguments and even drawn examples from the community and used them to justify their side of the argument. Each side has also given practical calculations of the value added to the society by the geography and the institutions to the economies of a region, and with some success, they have managed to sail through with their arguments. This paper will look at the arguments and examples that are given by both sides and later take a stand on the approach that best fits the situation.

First, we will begin with the side that argues that it is the geography of a place that contributes significantly to the economy of a region and not the institutions that are in the society. There are some key geographical and ecological features like the disease ecology, the climate zones as well as the distance from the coast lines that contribute significantly to the economy of a region. The effects of these geographical features affect the economy of a region through two major channels which are the direct channel like the geographical effect on production and agriculture, influence on trade and investment ad its effect on population growth. There is also the indirect channel which is its effect that comes through the choice of economic and political institutions. Both of these means have been seen to be significantly viable in influencing the economy of a region since a disadvantageous geographical environment may make room for the development of institutions that are less productive and weak hence bringing down the economy of the region.

In this particular case, the issue of malaria a geographical feature has been used to illustrate how the geographical features of a region can influence the economy of the region and directly have effects on the per capita income of the region. It is open that the areas that have high cases of malaria have a lower per capita income than areas that do not have high prevalence of malaria. It is worth noting that malaria transmission does not just depend on the geographical features but also on the type of mosquito vectors and the climatic conditions also referred to as the ecological conditions. This then is a perfect way of measuring the fact that malaria causes… [read more]

Corporate Finance Tools in Daily Essay

… While interest rates are low it may be tempting to take a bond or set term savings account with interest rates fixed for a period of time. However, although interest rates may be currently low, they might not remain this way. If inflation increases above the fixed rate of interest offered it is apparent that money will be losing real value over time. The ability to look at the time value of money and assess the present value of an investment with some assumed inflation rates may be very useful in assessing at the real value of an investment. Investments that may look good in numerical terms can be misleading, simply understanding the concept can aid with the assessment. Moreover, undertaking calculations can indicate the real value and may lead help with the choice between shorter or longer term investments.

When assessing investments, potential investment vehicles may include stocks and shares as well as the simpler bonds and savings accounts. Stocks and shares provide a great potential for investment. However, unless one has significant financial resources it is not possible to get the best advice from knowledge brokers. Instead, standard advice from the mass market brokers is all that is available. This can increase the challenges of investing in stocks and shares. Often individual small investors may look at a firm and see themselves as purchasing a part of that firm. While in concept this is correct, when assessing the investment such as a share price, it should be assessed not as a firm, but as the future revenues it will produce. In this way it is most effective to assess it primarily as an investment vehicle.

Understanding the way in which future values can be discounted to give a current value and the way that the markets operate can increase the ability to assess a stock for oneself. For example, basic information, such as the current risk free rates of government bonds and the current returns on the stock market may be assessed. Measures such as the beta and the dividends can also be looked up, and many web sites will give future earnings estimates from different brokerage houses. Tools such as the dividend discount model and the capital asset pricing model (CAPM) may be used to assess the value of a share and consider the current price against that value. These models will give different results and are renowned for their lack of alignment with real world prices due to the many different influences, but it gives a basis on which an assessment may be made.

Therefore, the use of the tools found in corporate finance is present in everyday personal finance management and decisions. Management of a household account, determining expenditure, forecasting and budgeting for essential costs, and assessing surplus income available for non-essential spending, or investing and the ability to assess different types of investments are all examples of the way strategies used in corporate finance can be applied in everyday financial decision.… [read more]

Regulation of Banks Essay

… Investment banks also underwrite stock offerings just as they do bond offerings. In the stock offering process, a company sells a portion of the equity (or ownership) of itself to the investing public. The very first time a company chooses… [read more]

Banking Website Research Proposal

… This helps the firm to be able to provide customers with products that can address specific needs. A few of the most notable include: weekend trading, foreign exchange services, ATM's and coin / deposit / change machines. These elements are… [read more]

Strategic Planning the Internationalized Economic Crisis Research Paper

… Strategic Planning

The internationalized economic crisis has generated new pressures for economic agents across the globe. By far, the most severely affected sector is represented by the financial sector, where fiscal companies went bankrupt or were subjected to nationalization in… [read more]

Bank Finance Management Book Report

… Bank Finance Management

The global economic crisis, that has its roots in the global financial crisis of 2007 and 2008 started off from the collapse of giant financial institutions such as Bears Stearns, Lehman Brothers and Citi Bank. In the… [read more]

Personal Finance Goal Essay

… Personal Finance Goal: Buying a New Home and Saving in my Roth IRA

One of the most powerful aspects of goals is that they have the ability to energize and focus people's efforts to attain greater accomplishments than if they had just let fate or circumstance guide them. It's been my experience that the more passionate someone is about a goal, the greater the five principles of goal setting work together to keep the accomplishment in greater focus and more attainable as a result. My goals are to buy a home and also save $15,000 in my Roth IRA.

It's been my experience that the factors affecting this goal include ongoing costs, some fixed yet many variable, including the price of food, gasoline, electricity, entertainment and leisure travel. Cutting back on all of these elements has helped also get me more focused on my two very, challenging economic goals. The decisions to not spend have been more efficient, there's not so much time wasted debating the value of spending vs. saving when the goals of a new home and $15,000 in a Roth IRA are engrained in my way of seeing trade-offs now when it comes to budgeting and spending.

The five principles of goal setting including clarity, challenge, commitment, feedback and task complexity are all critical foundational elements for any goal to be attained. In defining the goal of buying a new home, the clarity of the specific type of house, the price range I can afford, and most important of all, the size of the down payment all are clearly defined. The clarity of the goal for getting $15,000 saving in a Roth IRA leads me to say "no" to spending on other items I would typically say "yes" to. I am finding the greater the clarity of the goal, the easier it is to shut out distractions and other potential detracting elements and stay entirely committed to accomplishing it. The clarity of the home and…… [read more]

Economic Theory Since the Great Research Paper

… This is significant, because it is a sign that various protectionist policies are ineffective at addressing the underlying challenges facing the nation. ("Hawley Smoot Tariff," 2011) (Griswold, 1998)

Clearly, Keynesian economic policies can stabilize the economy. Yet, they are not the end all solution to different economic challenges. While, supply side economics can help to address certain aspects of the different issues facing the nation. However, in both cases they have played a role in helping to contribute to the consistent amount of trade deficits. As a result, some individuals have called for protectionist policies to deal with these challenges. The problem is that this will only make the underlying economic situation worse. Therefore, an approach needs to be taken that will look at the different views and create some kind of balanced approach when dealing with these kinds of issues. (1,651 words)


Hawley Smoot Tariff. (2011). Info Please. Retrieved from: http://www.infoplease.com/ce6/history/A0823033.html

New Keynesian Economics. (2011). Investopedia. Retrieved from: http://www.investopedia.com/terms/n/new-keynesian-economics.asp

Griswold, D. (1998). America's Maligned Trade Deficit. Cato. Retrieved from: http://www.cato.org/pub_display.php?pub_id=3655

Lipsey, R. (2007). The Keynesian Approach. Oxford University Press. Retrieved from: http://www.oup.com/uk/orc/bin/9780199286416/01student/interactive/lipsey_extra_ch25/page_03.htm

MacEnzie, B. (2011). U.S. Trade Deficit. IIP Digital. Retrieved from: http://iipdigital.usembassy.gov/st/english/article/2011/07/20110713153813eiznekcam0.4696314.html#axzz1T1KLxiAJ

Roubini, N. (1997). Supply Side Economics. NYU. Retrieved from: http://pages.stern.nyu.edu/~nroubini/SUPPLY.HTM… [read more]

Public Finance Is an Area Research Paper

… For this reason local governments have to take into consideration the impact that property taxes can have on the local population.

In addition to urban sprawl there are other impacts or influences that are associated with property taxes. Some are… [read more]

My Internship in SCFB Term Paper

… Internship at SCFB

I worked in the Standard Chartered First Bank in Seoul, Korea. At the bank's headquarters, I worked in the Risk Finance Department. The Standard Chartered first Bank began its existence in the year 1929 as Chosun Savings… [read more]

Public/Government Finance Public (Government) Research Paper

… While the implications of that requirement are outside the scope of this paper, job creation presents its own painful challenges.

The Implications and Measuring Success

There is furious debate around the country about funding for social programs, so almost any recommendation will be considered controversial. Having said that, the obvious solution is tax reform that eliminates tax breaks and closes tax loopholes for wealthy individuals and corporations. This philosophy does not sit well with a number of people, but who else has the money? Certainly not the shrinking middle class or the growing disadvantaged class of people living near or below poverty levels. Moreover, the current tax structure makes no economic sense, nor does it advance any worthwhile social policy, in so far as it allows Bill Gates to pay a lower effective tax rate than does his administrative assistant.

As for measuring the success or failure of this recommendation, the ultimate measure of how well a program like unemployment benefits works is whether people continue to believe in the American dream, that if they work hard they can advance. There is no ability to work hard when unemployment remains at record levels, when job creation remains at 18,000 net new jobs per month while 14 million are out of work, when the ratio of job applicants to jobs available is nearly 5 to 1 according to the Economic Policy Institute.

In practical terms, there need to be better methods for measuring unemployment that take into account the actual number of people looking for work and available for work, like the underemployed working less than 40 hours per week, new college graduates who cannot find work, the chronically unemployed etc. who are not counted in the current unemployment rate of 9.2%. In the meantime, our society has to rely on economic reports and forecasts to measure whether unemployment benefits support economic stimulus, and whether job creation and unemployment statistics as currently calculated are accurate enough to inform the development of worthwhile social programs.

Public (Government) Finance Works Cited

Allmanblogs.com. (2010). The case against an unemployment benefits extension: the three main arguments and their rebuttals. Secrets about Unemployment website. Retrieved July 13, 2011 from http://blog.secretsaboutunemployment.com/unemployment-claim/the-case-against-an-unemployment-benefits-extension-the-three-main-arguments-and-their-rebuttals/

Bureau of Labor Statistics. (2011). Employment Situation Summary. BLS web site. Retrieved July 13, 2011 from http://www.bls.gov/news.release/empsit.nr0.htm

CNBC.com. (2009). Making the case for and against unemployment benefit extension. CNBC Guest Blog. Retrieved July 13, 2011 from http://www.cnbc.com/id/32284041/Making_the_Case_For_and_Against_Unemployment_Benefit_Extension

Doyle, A. (2011). Unemployment Extension. About.com website. Retrieved July 13, 2011 from http://jobsearch.about.com/od/unemployment/a/unempextension.htm

National Public Radio. (2010). How unemployment benefits stimulate economy. NPR website. Retrieved July 13, 2011 from http://www.npr.org/templates/story/story.php?storyId=128449659

PRWeb. (2011). President Obama re-authorizes federal unemployment extension for 2012 due to continuously high unemployment numbers. Retrieved July 13, 2011 from http://www.prweb.com/releases/prwebunemployment_extension/org/prweb8566479.htm

PRWeb. (2011)b. Unemployment extension: Record high 13.7 million Americans currently collect unemployment as of May 2011. San Francisco Chronicle website. Retrieved July 13, 2011 from http://www.sfgate.com/cgi-bin/article.cgi?f=/g/a/2011/05/28/prweb8501652.DTL

Tracy, B. (2011). Chronic unemployment highest since Great depression. CBS News.com Retrieved July 13, 2011 from http://www.cbsnews.com/stories/2011/06/05/eveningnews/main20069136.shtml

Unemployment Extension: Federal extended… [read more]

Finances Critical Book Reviews "America's Oligarchy" Johnson Book Review

… Finances

Critical Book Reviews

"America's Oligarchy"

Johnson, Simon., & Kwak, James. (2010). The wall street takeover and the next financial Meltdown. New York: Pantheon Books.

Paperback: $15.95

ISBN: 030747660X

Knopf Doubleday Publishing Group

Simon Johnson is one of the most… [read more]

Economic History of America Research Paper

… ¶ … United States Central Bank

The economic history of the United States from the time since the Reconstruction period of the Civil War has certainly varied through epochs of both prosperity and of despair. Analysis of the trends which… [read more]

Fed Raise Interest Rates Research Paper

… Interest Rates

Federal Reserve Interest Rates and Economic Recovery

The recent global economic collapse brought many specific features of the financial world into sharp relief. The role that government policy plays in shaping financial security and long-term stability has been seen as of immense importance in the past few years, and this is quite understandable given the amount of wealth and productivity that was lost during the worst economic decline since the Great Depression. Everything from the various stimulus package components to whether or not certain politicians are focusing enough on "jobs creation" -- often a term more filled with political rhetoric than economic relevance -- has become a subject for intense debate and media (and presumably public) scrutiny. The problem is not simply that the public and its representatives can't agree on what needs to be done, but there is also disagreement about what certain actions would actually lead to.

Given the complexities of national and international finance and economic growth, it is perfectly understandable that there is a large amount of disagreement in these areas, yet decisions must be made. Issues like the interest rates charged by the Federal Reserve, which is the ultimate supply of money for the nation's banking system and thus the primary factor in the cost of capital for individuals and businesses alike, are of vital importance to future economic growth and stability. A low rate increases economic activity by making capital cheap, but at the same time this leads to inflation which could hurt the nation's long-term stability and the financial position of the dollar in the rest of the global economy. This paper will examine the effects of raising the interest rate on several key economic features and indicators.

Consumer Financing

When the Federal Reserve raises the interest it charges other banks for borrowing cash, these banks in turn charge the other institutions from them higher rates, and ultimately rates become higher for consumer (Magnuson 2008). This means that large-ticket items that consumers typically borrow funds in order to purchase -- real estate and new cars are the most common purchases financed in this way -- become more expensive in both the short- and long-term. A $200,000 loan for a home purchase with a standard 30-year fixed mortgage, for instance, has a monthly payment of $1,073.64, and around $185,000 in total interest; raising the interest rate just one percent means a monthly payment of $1,199.10 and total interest over the life of the loan of over $230,000 (MC 2011). The same house would cost more than a hundred dollars more each month and more than forty thousand dollars more over the life of the loan, meaning fewer consumers would purchase homes (or cars) until real prices (the actual cost of the real estate) dropped, which has a depressive effect on the economy (Magnuson 2008).

Annuity Values

Assuming that the terms of a given annuity are already fixed, a rise in interest rates could actually be a benefit by preserving the value of… [read more]

Managerial Economics the Three Articles Analyzed Essay

… Managerial Economics

The three articles analyzed in this paper include the Confucian Consumer: Seven reasons why the Chinese save, when they really should be spending by Nouriel Roubini, Explaining Growth by Douglas Clement, and FDI, Trade, and Product Innovation: Theory… [read more]

Herding in Bank Panics Term Paper

… The researchers noted that "decisions under uncertainty . . . draw upon different neural processes." (Prechter and Parker, nd, p.14) Conclusions stated are reported as follows: "Depending on the circumstances, moods and emotions can play useful as well as disruptive… [read more]

Foreign Aid vs. Economic Growth Dissertation

… The nation specific studies too have not succeeded in the production of conclusive results. The example being the bivariate Granger causality test performed by Dhakal et al. (1996) that involved four Asian nations (India, Nepal, [1: The most up-to-date analysis… [read more]

Financial Derivatives on Sub-Prime Crisis Impact Dissertation

… ¶ … Financial Derivatives on Sub-Prime Crisis

Impact of Financial Derivatives on the Sub-Prime Crisis

Over the last several years, the world has been struggling with a financial crisis, unlike anything that has occurred since the Great Depression. At the… [read more]

Annual Financial Report Fiscal Term Paper

… This situation however creates imbalances as funds are taken away from their initial purposes, namely the public sector services, such as education or medical care (Vantage FX, 2010).

The Piqua City School District in Ohio has constructed and forwarded its… [read more]

Does Central Bank Independence in Transition Economies Bring Lower Inflation? Essay

… ¶ … Central Bank Independence in Transition Economies Bring Lower Inflation?

Inflation is simply a situation where too much money chases too few goods, as per the macroeconomic definition. In the developing society inflation can be a political and economic… [read more]

Great Depression of 1929 vs. The Global 2008 Economic Crisis Research Paper

… Great Depression of 1929 vs. The 2008 Global Economic Crisis

For many people, the Great Depression of 1929 and the 2008 Global Economic Crisis are synonymous with: greed along with vast excesses that came to a sudden halt. As both… [read more]

Labor Economics Research Paper

… Labor Economics -- the Ripple Effects of Unemployment

The litany of dry unemployment data read from a teleprompter by an attractive, well-groomed cable TV newsreader tends to go in and out of the ears of many Americans. Those out of… [read more]

Analyzing the Economic Development of a U.S. City Term Paper

… ¶ … economic development of a U.S. city

The Economic Development of New York City

New York City is one of the most important cities in the world, its importance being granted by its numerous population and history, and by… [read more]

Ireland the Social Cultural Economic Legal and Political Environments Research Paper

… Ireland is one of the smallest countries in the European Union. The country became known as the Celtic Tiger for its robust economy during most of the 2000s, but has since seen significant economic downturn. The Republic of Ireland comprises… [read more]

Economic Environment of a Business Research Paper

… Where there is no competition there is no free enterprise. In the 'Socialist' economic business environment all resources are state-owned and all major business and production facilities are state owned and government-operated with national goals determining economic decisions rather than market conditions. The socialist economic system is guided by the economic planning system in which the government makes economic decisions that are of great import.

III. Business Ownership Rights In the Capitalist Economy

Private ownership is stated to be one of the "distinguishing features of business under capitalism" which means that individuals own businesses and certain freedoms exist for the business owner including:

(1) the business owner's right to receive the business profits;

(2) the business owner's right to start any business that is lawful and to liquidate the same;

(3) the business owner's right to invest or to refrain from investing;

(4) the business owner's right to make contracts;

(5) the business owner's right to buy from and sell to whomever they please;

(6) the business owner's right to set whatever prices they wish and to receive that amount. (Reddy, )

IV. Business Economic Activities

Economic activities performed by the business or organization toward the goal of maximization of profit include:

(1) production;

(2) distribution; and (3) sales. (Palwar, 2010)

These activities are of the nature that involve transformation of inputs into outputs, supply of these in the market place and exchange of the products with the buyers for money." (Palwar, 2010) Constraints on business organizations include such as restraint on resources -- land, labor, capital entrepreneurship, raw materials and finances." (Palwar, 2010) Business activities include:

(1) lower;

(2) middle; and (3) higher activities. (Palwar, 2010)

Lower levels of activities are those associated with "day-to-day operations of the firm -- Production, scheduling, ordering input supplies, scheduling overtime hours." (Palwar, 2010) Middle levels of activities include the firm's current operations including demand forecasts, investment appraisal and risk analysis, cost estimation and analysis, pricing of the product and discount to be offered, choice of suppliers, and lower level recruitments." (Palwar, 2010) Higher levels of activities include those with are long-term plans and decisions based on strategy. Included is "diversification of product lines, launching of new products, expansion of production base, competitive strategies such as advertising, research and development, packaging and marketing." (Palwar, 2010) Finally, it is necessary to consider the interactions of the Capitalist market during the course of doing business in the international marketplace. Globalization has changed the very fabric comprising the business economic environment and has made the economic environment more challenging to understand and even more complex to give an accurate accounting of the activities and processes of the business in the economic environment.


Palwar, V.K. (2010) Economic Environment of Business 2nd Ed. PHI Learning Pvt. Ltd. Retrieved from: http://books.google.com/books?id=hNBEId591wYC&dq=Economic+Environment+of+a+Business&source=gbs_navlinks_s

Reddy, R.I. (2004) Business Environment. APH Publishing. Retrieved from: http://books.google.com/books?id=NQv9vKgF_3MC&dq=Economic+Environment+of+a+Business&source=gbs_navlinks_s… [read more]

Creating a Library Budget in an Economic Downturn Term Paper

… Economic Conditions and Library Budgeting

Criminological Theory into Murder

Recession and Library Budgeting: Implications and Recommendations

The year 2007 had hit the world quite hard. Stock markets crashed globally and real estate prices toppled down. Even the biggest of the companies found themselves struggling for survival. Unemployment rate shot up at a rapid rate and so did inflation. To top it up, U.S. Dollar got onto the road of everlasting devaluation. This was the beginning of what we know as the current economic recession. Ever since 2007, funding expenditures have been hard on pockets for everyone, be it individual households, private sector companies or the government itself. Even the most necessary and crucial sectors like health and education had to face sharp budget cuts. Like everything else, libraries also became victims of fund shortfall, and thus, were forced to reconsider their budget plan. Libraries, whether individual or institutional, had compromise on essential budget elements.

Creating a Budget in Recession

Creating budgets for libraries is not as easy as it sounds. Things get even worse when these budgets have to be created during recession. Like any other conventional budget, library budgets comprise of incomes and expenditures. Incomes are generally dependent on fees and fines, endowment funds, donations and revenues from routine activities such as printing and photocopying, with endowments being the major contributor. On the other hand, the expenditures are further categorized into operating expenditures and collection expenditure. While operating expenditures are normal administrative expenses, however, collection expenditure includes expenses related to a library's collection such as books, periodicals and other subscription charges.

Considering the fact that the major source of funding for libraries come from donations and endowment funds, it is understandable why budgeting becomes difficult during times of economic decline. Funding from both these sources drops and consequently, the dependence remains on operating revenues which, in most cases, are not enough to finance the expenditures. As a result, libraries have to resort to budget cut downs. This is the most difficult part of budgeting and needs careful planning. A tiny lapse of planning might end up affecting the service quality in a negative way. This may further lead to a decline in subscription revenues, thus making situation even worse.

When creating budgets, libraries should keep in view, their objectives and target. The basic determinants that need consideration include the purpose of library's existence, its clientele, its distinctive services and the resources available to render those services (Farmer 1993). This will help them deciding where to cut. The next step is to take into account, the internal and external factors that influence the library's economic environment. For example, members can be asked to fill out a survey that aims to find out which services are most widely used by the members and what resources are least used. This will give planners an idea about where to focus for reductions. As far as external sources are concerned, factors like competitor libraries and technological and political changes, where political changes refer to… [read more]

Central Banks Dissertation

… Central Banks

What criteria are, and have been, used to determine monetary policy. Examine the evidence for and against the view that central banks can control inflation. Should central bank's target zero inflation?

What criteria are, and have been, used… [read more]

Economic Environment Analysis Essay

… Economic Environment Analysis

For a variety of companies, the global financial crisis and recession, would force a number of organizations to reexamine their underlying business strategy. Where, managers and executives would look at different ways they can stream line operations, to increase profits. In the financial services industry, the effects of the recession have been more severe. As some of the largest and most well respected financial institutions; has fallen into reorganization or outright liquidation through bankruptcy. This is because these organizations were not aggressively trying to reduce costs as much as possible. To adapt to the current recession and to be prepared for future growth opportunities requires: that all corporations strategically place their various resources, in locations that will help them to maximize their profits. As a result, our organization must be able to reduce costs as much as possible, by placing various call centers in locations that are business friendly and economically viable. In the case of serving customers in Europe a number of locations are being considered. One of the possible locations, the Czech Republic, has a number of distinct advantages such as: it has been delivering positive growth for the first two quarters of 2010. Where, the GDP rate would grow at: 1.5% in the first quarter and 2.3% in the second quarter. (GDP Growth Exceeds 2%, 2010)2 This is significant, because it follows a period of economic decline that the country would experience, as the GDP rate would fall by 4.3% in 2009. (OECD 2010)3 This follows several years of having consistent growth rates of 6% annually. For our organization, the recession is presenting the opportunity to set up a possible call center in the Czech Republic. However, to determine if it is financially and economic prudent, requires conducting an assessment of the country itself. To achieve this objective we will examine: the different opportunities and risks of establishing call center operations in the Czech Republic. Together, these different elements will provide the greatest insights, as to if placing call center in this location will help to reduce costs and increase profit margins.


The Czech Republic has been able to have a successful transition from a planned to a market economy. Where, the country is currently a member of the EU and it is at the cross roads between Russia and Europe. The geographic location of the Czech Republic makes it an ideal spot for exporting a variety of goods and services. As far as the financial sector is concerned, the country's banks have been protected from the financial crisis because of the conservative lending standards that the government has in place. An example of this can be seen by looking at a report on the state of the banking sectors during the middle of the recession from Price Waterhouse Cooper. Where, they said, "The banking sector in the Czech Republic is a performing and profitable business, playing a key role in the development of the Czech economy. During the global financial and economic… [read more]

Economic Issues Regarding Greece and the Euro Currency Because of Greece's Financial Situation Essay

… Economic issues regarding Greece and the euro currency because of Greeces financial situation.

Economic issues regarding Greece and the euro currency because of Greece's financial situation

With a gross domestic product of $341 billion for 2009, Greece is the 34th largest economy of the globe. The model at the basis of the economy is a capitalism in which 40 per cent of the GDP is generated by the public sector and 15 per cent of the GDP is generated by tourism. Living standards -- given by the income per capita -- in Greece however remain lower in comparison to those in the developed countries of the European Union. Public debt, inflation and unemployment are however above the average in the euro zone.

Up until 2007, Greece had been following an ascendant trend due to increased access to credits, higher consumer spending and improvements in infrastructure. In 2008 however, the country's economic stability and funds decreased due to the internationalized crisis. By 2009, Greece was in economic recession and had accumulated a federal debt of 10.7 per cent of the GDP -- in a context in which the EU had imposed a 3 per cent cap on federal debt. The internal problems, such as decreasing federal funds, inadequate statistical reporting or inability to follow through the reforms set with the European Union, forced international credit rating agencies to downgrade the country's debt rating.

In this context of increasing financial instability, the government in Athens has implemented an austerity program by which it aims to reduce governmental spending and restructure the public sector. The measures have however generated intense populous turmoil and protest and even riots are possible in the country. In support of the country's economic revival, the governments in the euro zone and the International Monetary Fund have "pledged more than $160 billion in support of Greece over the next three years" (Central Intelligence Agency, 2010).

The financial recession in Greece is generally perceived as a powerful international phenomenon, with potential impacts on the near and far global communities. Despite the fact that Greece is a far away country and a small economy (generating only about 2 per cent of the European Union's output), its problems could easily represent the commencement of a greater global financial crisis. Greece represents the model of several modern countries which have increased their foreign borrowings, and despite its size, Greece could also represent the symptom of a greater crisis.

More explicitly, Greece has borrowed immense sums of money to cover its losses. Combined however with the emergent events and the unstable economic climate in the world, the sovereign risk in Greece has exponentially increased. It is in this order of ideas possible for the Greek officials to modify their fiscal policy in a means that decreases the value…… [read more]

Walmart Economic Trend General Environment Case Study

… Wal-Mart Economic Trend

Economic Trends

There are a number of different factors that will affect the economic trends of Wal-Mart over the next three to five years to include: interest rates, unemployment rates and inflation rates.

Interest Rates

When looking at the effect that interest rates will have on Wal-Mart, it is clear that it will have a dramatic impact on the company's bottom line. What happens is when interest rates are increasing; the overall amount of lending standards will become tighter. This makes it more difficult for consumers and businesses to arrange financing for large purchases / equipment. At which point, many businesses will begin to layoff workers and economic activity around the country will slow. (Seabury) This will have a positive impact upon Wal-Mart, as their overall costs are lower than their competitors. The reason why, is because Wal-Mart will seek to purchase the different products from the manufacturer / whole seller, at the lowest prices possible. This is the basic formula that has allowed the company to maintain low prices. While at the same time, seeking other ways to reduce prices such as: utilizing their supply chain management tools (to more quickly respond to the needs of different stores). These strategies have been used to reduce costs for the general public, as Wal-Mart is able pass the savings on to customers. During times of economic prosperity or challenges, many consumers will shop at Wal-Mart as way to keep their overall costs low. The effect that this has had on consumer prices has been dramatic. Evidence of this can be seen with a study that was conducted by IHS Global Insight. Where, they found that between 1985 and 2004, Wal-Mart was able to help consumers see a 3.1% reduction in prices. This is significant, because it shows that the lower prices offered to consumers, allows the company to prosper when interest rates are low or high. ("Measuring the Economic Impact of Wal-Mart on the U.S. Economy")


When unemployment rates begin to rise, is when consumers will be more inclined to go to Wal-Mart during times of economic challenge. What happens is, as the unemployment rate begins to increase, consumers will dramatically reduce spending. This is because the rising unemployment rate is having an effect on consumer confidence. Once this takes place, it means that many consumers will reduce spending and find ways to save money. One way to do this is to purchase more items at Wal-Mart, as their prices are more than likely to be cheaper than competitors. This will have an impact upon the overall bottom line of the company, as their earnings and sales will increase during times of economic contraction. An example of this can be seen when the company was reporting their earnings in February 2009. Where, they reported that fourth quarter 2008 earnings per share, were above expectations of $.94 cents coming in at $.98 cents. While during the same period, retail sales increased 1.7%. This is significant, because it shows… [read more]

Crisis Economics or the ED of the Free Market Book Review

… Crisis Economics by Nouriel Roubini

In his book titled "Crisis Economics" Nouriel Roubini skillfully unveils years before the red flags that would lead to the biggest financial crisis in the United States and in the world since the great depression. During his speech at the International Monetary Fund in Washington DC he warns us a long suffered housing bust, a brutal oil shock, a declining consumer confidence and inevitably a recession. The author states "As homeowners default on backed mortgages, the global financial system would shudder to a halt," triggering a crisis that cripple hedge funds, investment banks would go bust and other major firms would cease to be independent entities as a national economic illness becomes an international pandemic. The book clearly demonstrates how a global economy teeters on the edge of a potential deflationary spiral not seen since the great depression. He predicts the problems but also attempts to provide remedies. In chapter seven he points out how policymakers used government's power to arrest the spread of the crisis consequently with future implications stemming from theses radical measures. He asserts the need for a new rules and regulations to oversee major players and a new financial architecture to ensure transparency and stability to and for financial institutions. He explains just as the Great Depression swept away contradictions embodied by J. Edgar Hoover, the great recession promises to usher a new way of understanding and above all, a new manner of preventing crises. In an effort to advert complete ruin we often fall…… [read more]

Pakistan Economic System Research Paper

… Pakistan Economy

Currently there is a great deal of economic instability throughout the world. Emerging markets are particularly susceptible to experiencing economic instability when global economies begin to falter. Emerging market economies are defined as "an economy with low to… [read more]

Contrarian Investment Strategies Thesis

… Contrarian Investment Strategies

Over the last several decades a number of different investment strategies have evolved. All of them were designed to help investors be able to successfully time the up and down moves, that occur on the world equity… [read more]

Milestone 2 Business Recommendations Based on Economic Projections Research Paper

… ¶ … economic futures facing Larson Inc. are a U-shaped economy characterized by uncertainty; a V-shaped economy characterized by a sharp recovery and a W-shaped economy characterized by a double dip recession -- from the first of which we are just now emerging. The U-shaped economy is characterized by uncertainty -- the economy's future is relatively unknown. Economic recovery is delayed, leading to adverse consequences such as stagflation that gripped Japan in the early 1990s and lasted for several years. This possibility has the lowest probability of the three given that the GDP has increased strongly in each of the last two quarters, indicating that the economy has pulled out of the bottom of the U. already.

The GDP increases hint at a V-shaped recovery over the course of the next five years but do not guarantee it. Two quarters of economic growth does not a recovery make. However, the probability of a V-shaped recovery if high, for a couple of reasons. The first is that the credit crunch has eased. The second is that the Fed has kept interest rates at rock bottom in order to spur borrowing and investment (Federal Reserve Bank of New York, 2010). In addition, major American trading partners like China and Canada did not suffer the same intensity of downturn and are ahead of the U.S. In the recovery curve.

This does not preclude the possibility of a W-shaped "double dip" pattern in the next couple of years. There are a couple of reasons why this could come about. The first is the problems with the euro -- especially Greece and Spain -- which could destabilize the European currency union (Kirschbaum, 2010). This would lead to a flight to the U.S. dollar, making American exports uncompetitive on world markets, exacerbating the trade deficit. In addition, instability in Thailand, while country-specific at the moment, could have a destabilizing effect on Southeast Asia (CNN, 2010), or all of Asia, to the detriment of global economic growth. Lastly, China's capitulation on its currency peg appears to be only partial, and may only be for show. If the yuan is kept high, gains in the U.S. economy could be offset by increases in the trade deficit and decreases in savings rates, evidence of which has already emerged -- down from 5.4% in Q2 2009 to 2.7% today (BEA, 2010). This is to say nothing of the jobless recovery. In short, there is substantial cause for concern about the course of the global economy recovery in the next couple of years, a double dip is a strong possibility, just behind the possibility of a V-shaped economy.

The economic climate has not affected demand for batteries, so Larson's sales have not been hit hard. However, if the economy improves, demand for new electronic products will increase. In tough economic times, people may still need batteries, but they are less likely to buy new equipment. With economic recovery, new equipment sales (computers, cell phones, mp3 players, smartphones, etc.) are expected to… [read more]

Financial and Monetary Economics Research Paper

… Financial and Monetary Economics

Since the end of World War II the issue of floating exchange rates in regards to currency has been increasingly brought to the forefront. Part of the reason for this is because the Breton Woods Agreement… [read more]

Politics Philosophy and Economics Surplus Trade and Unregulated Market Essay

… Politics, Philosophy and Economics Surplus, Trade and Unregulated Market

Politics, philosophy and economics

The purpose of this essay is to bring moral, economic and political theory to bear on the analysis, justification and criticism of political and economic institutions and public policies on surplus, trade and unregulated market.

A budget surplus refers the amount by which a government, company, or individual exceeds its spending over a particular period of time. Generally, a government does not need to maintain a budget surplus. However, a government has to be careful about running a budget deficit to make sure that the means of financing the deficit do not cause too much of an interest burden. In general, economists become worried when government debts, the most common way of financing a government deficit, rises sharply as a proportion of Gross Domestic Product (GDP). This is because interest payments might also rise as a proportion of GDP unless the government manages to sufficiently reduce the average interest rates paid on the debt. An increasing interest burden means that government revenues will be diverted to pay for financial costs, as opposed to being used for more productive purposes (Investor's word.com).

As in the case of the government, individuals and co-corporate do not have to ensure that their budgets are in surplus or balanced, but they have to be mindful of interest costs as a proportion of their income. Some economists believe that manipulation of the government budget surplus is an effective way of stimulating or slowing economic growth. However, other economists say that manipulating the budget deficit will only result in a change in the price level in the economy, since actual production change in an economy is only decided by changes in the labour force, the state of technology, and productivity of the workforce (Investor's word.com).

Politics and Economic Surplus

When money is tight in a nation, there is usually a standoff. This means that neither the government nor its citizens have attained/got the financial targets they have been yarning for, hence resulting into other alternatives because priorities have to be met. According to my judgment, the government has to look for the negative balance so as to meet its financial obligations, either through public borrowing or adjustments of its national monetary policies that favors it in raising tax revenue. For instance, Stevenson (November 19, 2000) claims that when money was tight in Washington in the year 2000, a standoff meant that neither side got what it wanted. Then, the U.S. government and its citizens began to learn that when priorities clash in an era of plenty, Washington's solution was to give both sides some, if not all, of what they wanted.

Therefore, whenever there is a standoff, Stevenson (November 19, 2000) declares that dividing up the surplus can only be made easier by two factors: the near-certainty that the surplus projection can be revised upward again, and the likelihood that the economy has slowed to a point where fiscal stimulus would no longer have… [read more]

Keynesian and Classical Economic Schools of Thought Compare and Contrast Essay

… Classical vs. Keynesian economic theory

Classical economic theory was the generally accepted economic paradigm until the Great Depression. Classical economics is said to have begun with the publication of Adam Smith's influential 18th century treatise the Wealth of Nations. In this text, Smith states that the 'invisible hand' of the market should be allowed to govern human economic decision-making. Producers supply their product to meet consumer demand, and the market arrives at a fair equilibrium price naturally. When consumers are willing to pay more, suppliers make more goods. As price goes up, demand goes down. As price goes down, demand goes up, but producer's willingness to produce more goods goes down as well. These assumptions were challenged by the spiraling downward of the economy after the 1929 stock market crash.

While classical economists did recognize that there were boom and bust cycles within the free market economy, they believed that these cycles would be naturally corrected if the business cycle was left to run its course. Eventually, prices would become so low during a recession consumers would begin to buy goods and services again. However, the great economist John Maynard Keynes stated this was not always the case. Consumers during a severe economic contraction would wisely fear for their jobs and 'hide their money' under the mattress, according to Keynes. This policy, while wise for the individual, was unwise for the economy, and would cause consumption to plummet still further. More individuals would be laid off, only intensifying the cycle. Even investors would 'hide their money' under the mattress -- i.e., not invest in commerce and infrastructure -- given the turbulent economic climate.

Ironically, wages that were too high may have intensified the Great Depression. Wages were supposed to plummet during a recession, according to conventional classical wisdom. However, wage rates were constant until 1931, which effectively meant in an environment of rapidly decreasing prices, wages had gone up. Wages proved to be 'sticky' to changes in the economy, yet consumers did not spend their additional money, and layoffs continued to increase. Adding to the problem was that the United States was still on the gold standard, which meant that the amount of money it could print was limited by its amount of gold reserves. The Federal Reserve was forced to adopt a deflationary economic policy to remain on the gold standard: to be fiscally responsible it increased its discount rate, the rate at which member banks could borrow from the central bank, effectively raising the interest rate the banks were forced to charge to consumers (Smiley 2008). The economy thus continued in its downward spiral of allowing less money for investment, decreased production, increased unemployment, and decreased consumer demand.

The solution to this spiral was government spending, according to the Cambridge-educated British economist John Maynard Keynes: "Keynes believed that consumption was the key to recovery and savings were the chains holding the economy down. In his models, private savings are subtracted from the private investment part of the national… [read more]

Economics Is Intended to Use Practical Examples Article Review

… ¶ … Economics" is intended to use practical examples to illustrate the types of concepts that are learned when one studies economics. As Marshall McLuhan said, the medium is the message. The medium here is a piece written in a very casual tone using examples plucked from everyday life to explain some of the fundamental concepts of economics. The overall objective is, ostensibly, to encourage the reader to pick up some of these basic concepts so that they, too, can make the sound economic decisions that are outlined in the article. The casual tone is intended to make the piece more approachable for the intended audience, which is not an audience that has an economic background. At times, the author forgets the audience and slips into concepts or jargon that have not been properly explained -- discount rates, for example -- and would clearly be unfamiliar to any person who would find this article beneficial.

The format by which the author conveys the concepts is based around anecdotes about theoretical transactions. These anecdotes serve as the basis for the explanation of the common view of the transaction and the explanation of the rational economist's view. For the most part, the economists' view is juxtaposed in this manner to illustrate its superiority. The arguments themselves are overly simple, avoiding any of the externalities that may ultimately factor into the decisions in question. This costs the author some credibility -- by ridiculing certain decisions the author places him/herself in the position of having to build a perfect argument. In many cases, this does not happen. An early example is the case of the two houses, one for $100,000 and the other for $500,000. The family in the $500,000 is portrayed as having made an irrational decision. Yet, many considerations go into this decision besides the value of the home -- the utility from living in certain locales being one of them. Even from a strictly economic standpoint, the job prospects of each region play an important role, as do the average wages. Even if the housing decision comes down to a net present value calculation, the author does not portray this choice accurately, and this undermines the strength of the argument.

The article attempts to cover a lot of economic ground. The resulting series of vignettes may succeed at this, but at the expense of readability. The point is that economics can be useful to help one make sense of practical applications, therefore one should study economics. There is no particular need for the article to become an economics lesson in and of itself. The author expends too much time on examples of his concept and this ultimately distracts from the concept. There is simply too many examples and not enough reinforcement of the core message. Each example does have its own value, but a more efficient and cohesive selection of examples would have allowed the author to tie those examples more succinctly back to the main point.

That said, the examples… [read more]

Development Economics Term Paper

… ¶ … Economics: Still Rolling: China's GDP Hits 8.7%

Still rolling… (Song Shengxia and An Baije, 2010) focuses on the state of the Chinese economy in a context in which 2009 was a difficult year for most global economies. China however managed to capitalize on its protectionist policies and its production and export capabilities and as such maintain a positive growth trend. Still, in their attempts to minimize the negative impact of the internationalized financial crisis, the Chinese banking sector granted more loans than normally, creating as such a risky situation of massive debt -- the very core of the current economic crisis. Aside increasing debt levels, future problems could also be posed by overproduction and incremental inflationary levels.

Yet, these are just potential threats, and one should praise the Chinese economy for making such an astonishing recovery in times of global financial crisis. 2009 did not commence in the most positive manner for the Chinese economy, especially as the growth in the gross domestic product for the first quarter (6.1%) was significantly below the target imposed by the federal authorities (8%). The growth rates of the following quarters were of 7.9%, 8.9% and 10.7%. The trend is revealed throughout the chart below:

At this stage of the article analysis, it has to be noted that the piece is not the easiest one to read for the inexperienced reader. It assumes that the individual possesses sufficient economics background and does not introduce him to the core of the issue, but to a specific item. Probably the most relevant example in this sense is the factual and statistical discussion about the Chinese national output. Shengxia and Baije present the figures for 2009, but do not reveal the national trend in the Chinese GDP throughout the past years, with the intent of presenting the context. Yet, since this is necessary, the chart below reveals the evolution of the Chinese GDP throughout the past decade:

While it is clear that the article is intended for individuals with an economic background, it is also true that the topic is interesting and could attract the general public, but this general public would have difficulties understanding the terminology and the actual situation and implications, since they do not have knowledge of the actual context.

Shengxia and Baije present the growing Chinese GDP from yet another angle -- that of the regional role it played. By proving its stability, China created a favorable context for the other Asian countries, which were able to maintain their exports to the western regions of the globe. Additionally, the authors argue that the increase in Chinese output…… [read more]

Govern the Profitability of Banks Term Paper

… This is evident in the various achievements in several areas of the banking sector. The introduction of the BIC principles coupled with the legislation of the central bank's independence and the introduction of transparency and accountability mechanisms into the financial… [read more]

Finance Necessity Never Made a Good Bargain Essay

… Finance

Necessity never made a good bargain

The idiom is attributed to Benjamin Franklin and it stands the most truth. What it virtually means is that a company or an individual in a desperate situation does not hold any ability to negotiate a higher position. Basically, he is obliged to accept whatever terms imposed by the other party. Consequently, it is more likely for him to give up part of his demands or desires, as requested by the other party. He is under no circumstances able to impose new conditions or stand by his initial requests. He is so desperate to close the deal that he will gradually agree to most, if not all, of the conditions imposed by the other negotiator. All these point out to the fact that, when in dire need for an agreement to be reached, the individual or organization will not be able to make a good bargain.

Cash in the bank

There are numerous ways in which the cash owned in bank accounts helps increase company performance. On the one hand, there is the example revealed by Urban Outfitters, in which the cash they held in banks helped increase their levels of liquidities, which then allowed the company to honor its short-term commitments -- namely the payment of the short-term debt. This reduces the pressures imposed by the internationalized financial crisis, but also supports organizational performance in other states of economy. Therefore, on the other hand, the increased levels of liquidity allow the organization to pay the counter value of the services and commodities received from their purveyors, meaning that no shortages will be encountered here and negatively impact production. The money could also be used to ensure the payment of the personnel salaries, and even other financial incentives such as premiums and bonuses, which further increase employee satisfaction, commitment to the organization and performances.

3. Risky finance

As the economic crisis has shown, too many organizations became involved in risky financial operations and as a result had to declare bankruptcy, or at least put on a great struggle to survive. A first example is offered by the International American Group, or AIG, a leading insurance company. Their mistake revolved around the blind implementation of credit derivatives. Similar to other players in the financial sector, the AIG executives believed that these instruments would help protect against risks. They were introduced by the London offices, a subsidiary of the U.S. organization, handling financial services. Basically, what the offices did was to sell credit default swaps (a financial tool of credit protection) on collateralized debt obligations. However, the value of the assets held as guarantees gradually declined. The organization's credit rating was demised, and all these materialized in an impending necessity to upfront $15 billion as collateral with its business partners. This threw AIG into a liquidity crisis (Morgenson, 2008).

The second example is revealed by Lehman Brothers. Their situation is simpler to describe as the…… [read more]

Mobile Banking in Microfinance Research Proposal

… Mobile Microfinance

Mobile Banking in Microfinance

Microfinance is greatly aided by developing mobile banking technologies. One of the great hindrances to microfinance had been the lank of institutions engaged in microfinancing operations; the advent of mobile banking allows for the same banks that already offer such services to bring them to a much larger proportion of the world's poorer populations (CGAP a 2009). Especially in rural and remote areas without adequate infrastructure even for point-of-sale or ATM microfinance transactions, wireless networks and satellite communications still make mobile banking possible. This gives the bank a broader pool of borrowers, decreasing the bank's costs per borrower and increasing both the bank's profits and its ability to make loans (CGAP b 2009). Costs to the borrower are also reduced in terms of travel time and expenses and the cost of time delays.

Microfinance itself is untraditional, but at first it followed traditional models of banking insofar as its transactions with banking customers. Experimentation with other delivery methods showed that point-of-sale and other branchless transactions conducted through third party agents reduced transaction costs by to as little as a thirtieth of the costs associated with branch-based transactions (CGAP a 2009). Initial results of mobile banking observations suggest that these drastically reduced costs are cut in half again when point-of-sale agents are cut out of the loop and mobile phones and other devices are introduced. In addition, this increases the amount of competition in microfinance, even in areas with an accessible branch location (WorldBank 2008). Though microfinance was never a profit-heavy venture, this competition could further reduce costs to borrowers.

Cash transactions, of course, still require a physical agent working on behalf of the banking institution, but even costs associated with these agents show a decline when mobile banking is made available (CGAP b 209). The essential strengths of mobile banking in microfinance, then, are the reduction in transactions costs to both banks and consumers, and the flexibility that mobile banking provides. This flexibility leads both to increased competition and increased utility, and the broader pool of lenders reached through mobile banking allows for a further reduction in transactional costs and an increased ability and willingness for banks to engage in microfinancing operation in more areas. The already noted effects of microfinance not only on direct participants but on communities where such services are available suggests that the widespread microfinance brought by mobile banking could help to establish economic growth and stability in wide regions of the world (CGAP a 2009).

The mechanisms for…… [read more]

Economics the Hong Kong Government Launched Essay

… ¶ … Economics

The Hong Kong government launched the Wage Protection Movement in the month of October in 2006. Since its launch, the wage protection program and policy being implemented in Hong Kong has been going through a vigilant process… [read more]

Effects of Economic Recession Thesis

… Recession

The recent economic downturn has impacted different nations in different ways. Each nation's specific characteristics contribute to the degree to which the recession impacts it. Canada, for example, has suffered because of its dependence on exports to the U.S.,… [read more]

Economics - How China's Economy Affects Global Essay

… ¶ … Economics - How China's Economy Affects Global Economy

The label "Made in China" is popular across the entire globe. The reason behind this popularity is represented by the simple fact that, due to an increased population density and… [read more]

Consumer Acceptance of Online Banking Research Proposal

… ¶ … Consumer Acceptance of Online Banking in the Sultanate of Oman

The research will center on the customer acceptance of online banking services within the Sultanate of Oman. Before writing the actual research report however, it is necessary to… [read more]

Accounting - Corporate Finance Thesis

… Accounting - Corporate Finance

How this finance and budgeting course has made an impact on you as a professional and describe the most valuable learning you will take with you.

Finance and budgeting are two of the most ethically difficult yet necessary areas for a university to address. No matter how high the ideas of an academic institution, these ideals must be paid for, and translated into real, financial terms through the budgetary process. Negotiating a budget is difficult because economics is the science of scarcity -- to finance a new program almost inevitably requires cutbacks in other areas, and sacrifices of time as well as money. Making budgeting decisions requires difficult moral choices that will hurt some people and reduce the effectiveness of the institution in some areas. For example, cutting the funding for under-utilized departments may make tuition more affordable, but can hamper the university's academic excellence and reputation for providing a well-rounded…… [read more]

Economics of Strategy Term Paper

… ¶ … economic crisis -- bankers to blame?

Be it resolved that bankers in developed economies are responsible for the global economic downturn and have behaved without moral integrity.

To blame bankers for the global recession that has been steadily degridating assets values globally by the trillions of dollars from 2007 to 2009 (Corden, 2009) is to miss the broader and far more significant factors. The last series of scandals including Enron, Tyco and many other corporations had as their catalyst the complete lack of insight and compliance initiatives on the part of the U.S. Federal government. The same could be said of the world's governments as well. In reaction to the astounding lack of compliance with regard to financial institutions and the publicly-traded corporations they served, the U.S. Government in 2002 passed the Sarbanes-Oxley Act (Gerrish, 2002). Other nations followed this trend, enacting into law compliance initiatives that had been severely limited in the past. These compliance initiatives did little however to solve the more fundamentally broken areas of global economies when it came to ethics and reporting.

As a result the Sarbanes-Oxley Act did nothing to provide the U.S. Securities and Exchange (SEC) Commission with any insights into how the innate financial system reporting and transaction inaccuracies could be so easily manipulated by corporations and by government leaders as well. In addition, by ignoring these dynamics, economists in the larger western nations could continue to use interest rates to manipulate and re-define the value of their currencies to ensure a continued growth of Gross Domestic Product (GDP).

These two factors of a global financial system increasingly capable of being manipulated not by bankers, but by entire governments to alleviate any costly fluctuations in their currency, as China and the U.S. both did extensively during this time, and the deflation of interest rates drove down the cost of capital to levels never seen before. As a result, with many of the world's western nations flush with cash and interest rates at exceptionally low levels as a result, housing re-financing became the new Automated Teller Machines (ATM) for millions of homeowners globally. In addition, low interest rates made it possible for sub-prime lenders to create highly profitable business models that extended homeowner's mortgages with interest rate escalations that would initially have very low interest rate-based payments a typical working class family could afford, only to settle at three or four times the original amount in the majority of cases (Gerrish, 2002). This forced nearly all of these middle class families with sub-prime mortgages to default and eventually see their homes foreclosed upon.

On a more aggregate level the subprime loans were then bundled together into investment packages and re-sold, with bankers not having any visibility into the quality of the loans purchased in the bundles. Today there is still confusion over these loan investment bundles.

From this analysis it is clear that the U.S. government and its reliance on interest rate reductions as a means to spur economic development actually… [read more]

Economics When the U.S. Economy Plunged Term Paper

… Economics

When the U.S. economy plunged into recession in the second half of 2008, there was considerable concern north of the border in Canada about the prospects for that nation's economy. The two countries are the largest trading partners in… [read more]

Economic Impacts of the Following on Canada Thesis

… ¶ … economic impacts of the following on Canada

Impact of Inflation on the Canadian Economy

Regarded as an economic phenomenon, inflation is perceived as a generalized, long-term increase in the level of prices and a reduction of the purchasing power of the currency in the respective country. Inflation has significant effects over the economy and over the interests of all economic agents, over the social and political climate, and over international economic relationships.

The size of the effects depends on the intensity of inflation and on the status of each economic agent. Some clearly lose something, while others may find themselves to have certain benefits from inflation.

Some of the elements that represent direct effects of high inflation represent wealth redistribution, social convulsions, decreased living standards for certain categories, economic information may lose some of its value, decreased savings and investments, production losses, and increased unemployment rate. Regarding income redistribution, any price modification implies modification of incomes for at least two economic agents, therefore a distribution modification and another income configuration for the economic agents in case (Phelps, 1970).

In order to better understand the economic impact of inflation, it is necessary to present the current economic situation that characterizes Canada. The country is a high-tech industrial society, with a market-oriented economic system. Over the past few decades, Canada experienced continuous economic growth, becoming one of the most stable and secure economies in the world.

However, the economic and financial crisis did not leave the Canadian economy untouched. In 2008, Canada's economic growth was significantly slower than before. The most affected sectors are the housing and the auto sector. It is expected that public finances will deteriorate in the following period.

In 2008, Canada's GDP purchasing power parity reached $1.307 trillion, with a GDP real growth rate of 0.6%. GDP growth rate reached 2.7% in 2007 and 3.1% in 2006. The unemployment rate reached 6.1% for a labor force of 18.18 million. Public debt reached 62.3% of GDP (CIA, 2009).

Inflation reached 1% in January 2009, but global macroeconomic conditions might determine an increase of inflation's level. However, the ideal inflation level is 2%, which means Canada's economy might benefit from an inflation increase, depending on its level.

Bank of Canada's policy is to target an inflation rate between 1-3%. The ideal pursued scenario involves a 2% inflation rate, which is considered to be core inflation for Canada.

But Canada has not always been in this monetary situation. Over the past decade, the country experienced several types and levels of inflation. Obviously, each of them had different repercussions on the country's economy.

Between the 1970s and the 1980s Canada's inflation was high and unstable. The impact consisted in significantly large and rising public deficits and debt. These were unsustainable at that point. The matter caused future economic turmoil and instability.

But things took a different turn since 1990s. The country's monetary policy started to focus around an inflation-control target. But controlled inflation was not enough. The situation had to… [read more]

Economics Optimal Currency Area Essay

… Economics

Optimal Currency Area

An Optimal Currency Area (OCA) is a geographic area that is best suited to share the same currency because it would optimize the region's economic efficiency. It sets up a description for what distinct qualities it… [read more]

Economic and Trade Development Thesis

… Economic and Trade Development

The economic situation of Western Europe was faring extremely well in the first thirteen years of the 20th century following the Industrial Revolution. However, the growth of Nazism and Fascism followed by the World Wars and… [read more]

Wto/Imf International Economic Cooperation Without a Doubt Thesis

… ¶ … Wto/Imf

International Economic Cooperation

Without a doubt, the most important factor in the Group of Eight nations (G8), the World Trade Organization (WTO) and the International Monetary Fund (IMF) are the fact that they are all in the hands of developed first world. These organizations have no real motive (other than altruism and goodwill) to aid the developing nations of the world economically. Though it is in the long-term interest of the first world countries of the world to aid the developing world and so produce a better class of consumer and forestall major global crises that demand attention, and even though this fact is acknowledged (or at least given lip service) by these organizations and the countries of which they are comprised, the actions and policies they carry out are not in line with their stated beliefs and intents. Instead, such organizations create short-term profits for the banks and nations that constitute the organizations.


There are many things that prevent the International Monetary Fund from acting as the economic savior of the developing world, which is how the fund has been touted. Dedicated to giving short-term loans and considered a "last resort" of lending to nations, the countries that owe the most to the fund are also those with the least say in how the fund is run. The weighted voting…… [read more]

Economics Minsky's Moment "Stable Economies Sow Research Proposal

… Economics

Minsky's Moment

"Stable economies sow the seeds of their own destruction" (Buttonwood, 2009). This is the basic philosophy of Hyman Minsky, an economist of the mid-20th century. Minsky argues that our financial system plays a big role in amplifying the economic cycle. He says that investors, banks, companies and consumers all tend to make the same mistake. They all assume that the future will look a lot like the past. After seeing several years of growth and low inflation, people develop an erroneous confidence that the good times will last for a long time. This encourages people to begin to borrow, banks begin to lend and the riskiness of the whole system begin to rise (Buttonwood, 2009).

Minsky says that the process has three phases. The first phase consists of investors taking on little enough debt that they have no trouble meeting their capital and interest payments. The second phase consists of investors stretching their finances so they can only afford the interest payments. And the third phase is where investors take on debt levels that…… [read more]

Decline in Housing Prices and Economic Consequences Housing Bubble Essay

… Decline in Housing Prices and Economic Consequences of the Housing Bubble

The Origin and Factors Responsible:

The origin of the crisis can be ascribed to 4 features. (i) the first and foremost relates to the immense growth in the financial… [read more]

Analyzing the Text Everyday Economic Statistics Essay

… ¶ … Economic Statistics

Guide to Everyday Economic Statistics

By Gary E. Clayton and Martin Gerhard Giesbrecht

Gary Clayton and Martin Giesbrecht's a Guide to Everyday Economic Statistics is a useful addition to one's library due to a multitude of reasons, among which two are the most prominent. First of all, the book offers the reader an insight into the economic mechanisms of important matters such as employment and unemployment, international trade, interest rates, national output, imports and exports, profits, expenditures, expected gains or financial markets. And it does this by revealing real life examples from the American economy which make the issues discussed even more so relevant. A Guide to Everyday Economic Statistics uses information that is otherwise available to the reader on other sources, such as the website of the United States Census Bureau, making as such one more step in bringing the reader closer to the book and the reality and relevance of the information presented.

The second reason which makes the book a valuable addition to the library is given by the style used in its writings. Scholars and academicians in the field of economics often make the mistake of using pompous words and getting lost in the specific terminology. While this reveals thee highly professional levels of preparation of the writer and captures the interest of the experienced reader, it does however fail to attract the novice economist. Clayton and Giesbrecht understood that economic matters often preoccupy the mind of the simple individual or the persons specialized in other fields. As a result then, they wrote their book using a simple and common style, making as such the concepts more comprehensible for the readers.

While the first reason in support of purchasing and reading the book is generally to be praised, the second one could generate controversies. The most prominent con argument of writing a book for inexperienced economists is that it requires the presentation of extensive introductory information. The experienced economists are already familiar with the terminology and the basic concepts and might find the introductory parts rather redundant and useless. The pro argument seems however to weigh more in balance and is based on the idea that the basic economic principles should be understood by all individuals, simply because this knowledge is compulsory in leading an appropriately informed life. This approach to introducing the inexperienced to the art and science of economic principles supports the intellectual development of the contemporaneous society.

The previous lines suggested that reading a Guide to Everyday Economic Statistics would help the average individual gain a better perception of the world and become better informed. This information is necessary for him to properly live his life. To best explain this statement, as well as the utility of the book, take the most simplistic example of a mechanic watching the eight o'clock news. Say that the man is currently employed at Ford Motors Corp and has been their loyal employee for the previous ten years.

The anchor man is discussing… [read more]

Economic Growth GDP Comparison: Italy Essay

… Economic Growth

GDP Comparison: Italy vs. The United States

The global economic crisis has been affecting almost all of the nations of the developed world. However, despite the fact that the source of the downturn is largely thought to have begun in the United States credit market, all of the countries of the European Union have become mired in the recession more quickly and more deeply than the nation from which the crisis originated (Pfanner 2009)."The economy of the 16 countries sharing the euro currency declined by 1.5% in the fourth quarter, according to the European Union's statistics office. That is even worse than the 1% decline in the United States economy during that period, compared with the previous quarter" (Pfanner 2009). On an annualized basis, "the 1.5% decline in output would amount to a drop of roughly 6% -- a significantly bigger fall than the 3.8% annual rate of contraction in the United States during the fourth quarter" computed in a similar fashion (Pfanner 2009).

While the economic powerhouse that was the EU has been reeling as a whole, one of the worst-affected countries is Italy (Pfanner 2009). Italy's fourth quarter output contracted by 1.8% (Pfanner 2009). Even more disturbingly, the forecast for Italy's gross domestic product (GDP) in 2009 is projected to contract by 2.5% rather than the previously anticipated 0.8%. "The international crisis has hit... An economy that was already weaker than the others," in the EU particularly hard (Italy 2009 GDP to shrink 2.5 pct, 2009, Reuters). Nations that experienced the most rapid growth from a lower point of economic development such as Italy, Spain, and Greece, have suffered the most in recent months. Tens of thousands of workers have been marching through the streets of the Italian capital "snarling traffic and demanding action to ameliorate the crisis" (Pfanner 2009).

According to the U.S. Bureau of Economic Affairs, the fact that the United States is in 'less bad shape' than the European Community nations such as Italy should not be a source of consolation. The "real gross domestic product -- the output of goods and services produced by labor and…… [read more]

Economics of Peru Thesis

… Economics of Peru

The focus of this work is examining Peru's economic state and to conduct an analysis which determines the optimal direction that Peru should take in country development in the near future to optimize the country's economy. This… [read more]

Convenience Banking Thesis

… Convenience Banking

BB&T - Convenience Banking

The contemporaneous banking system is extremely dynamic, facing increased competition not only nationwide, but on a global level as well. In order to strengthen and maintain their competitive position, banking institutions strive to increase… [read more]

Corporate Social Responsibility From an Islamic Law Essay

… ¶ … Corporate Social Responsibility from an Islamic Law Perspective

The concept of Corporate Social Responsibility (CSR) is at its very basis an exercise in Utilitarian ethics (Lynch-Wood, Williamson, Jenkins. 2009, 53, 54), egalitarianism (Stephenson, 2009, et.al), and concept of… [read more]

Washington Mutual Thesis

… ¶ … banking and the current fiscal crisis. Specifically it will discuss the failure of Washington Mutual (WaMu). The financial crisis in the United States is mounting, and it shows no signs of ending anytime soon. The American automakers are… [read more]

Finance There Are Several Key Considerations Thesis

… Finance

There are several key considerations to take into account when deciding whether or not to invest in China. The Chinese federal government and many provincial governments encourage foreign direct investment, which last year totaled $75 billion. A decision on approval to set up a wholly-owned subsidiary will be rendered within 90 days. One exception are the two principle trading cities of Guangdong Province, Guangzhou and Shenzhen, both located to the immediate north of Hong Kong.

China's economy depends on exports, so trade restrictions are relatively minimal. The country is a member of the World Trade Organization (WTO), which has resulted in the removal of most barriers. The country has a well-developed transportation infrastructure in order to get goods to Western markets. There are no export taxes. There are import taxes, however, if some raw material needs to be importer to our facility. In terms of taxation, the foreign enterprise will be subject to a VAT on the increased value of commodities at different stages of production. The amount of the VAT depends on the size of the firm and their accounting system.

With regards to foreign exchange, the yuan is loosely pegged to the dollar. A rigid pegging system was ended in 2005. The yuan is not considered to be a fully convertible currency; yuan is seldom taken outside China, and is not removed from the country on a large scale. Settlement of foreign exchange transactions is conducted through designated banks. Foreign firms are allowed to open the necessary accounts in order to conduct the necessary foreign exchange business. Acquisition of capital within China can be conducted through the domestic banking industry. China has a burgeoning investment banking industry to meet long-term capital needs; the domestic banking system can meet short-term lines of credit through any of a number of large banks. The China Merchant Bank offers several funding options for foreign firms and their suppliers. Because of the lack of convertibility of the yuan, firms will want to keep as much of their earnings in dollars.

China lacks strong labor laws. The weakest parts of Chinese labor law are implementation and…… [read more]

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