Test Reflection Section 4

I felt like I understood the concepts in Section 4, and the test score is a reflection of that.

However, I still need to remember some specific terms that I could use (such as currency volatility) in order to enhance my responses.

Thanks Ms.Q for grading our papers with such scrutiny, her comments allowed me to understand my weaknesses.

India’s Deficit (via Priyanka’s Econ Blog)

You’re so smart!!!!!!!!!!!!!!!!!!

The Indian current account is in a deficit of about -13. Over the 20 years the current account has fluctuated significantly between deficit and surplus. In 2004, it reached its peak surplus at about $7.5 billion. It is currently in a deficit of about $13.7 billion. India is a leading exporter in jewelry, gems, leather and others, and it has good services therefore boosting the current account. In terms of GDP the deficit is 2.9%. Luckily, India h … Read More

via Priyanka’s Econ Blog

China surplus

The Chinese current account has been in the surplus for more than 10 years now, and it has seen dramatic spikes over the past 5 years. The surplus was at its peak 1 year ago, when it was around 440 billion US dollars. However, the surplus has been decreasing over the past few months, and is currently around 70 billion, after falling to a minimum of 54 billion on March.

International economics quiz

We just had a quiz about currency and the balance of payments. I received a satisfactory score.

However, I should still work on mastering the details of this unit.

My Data Response

I received a satisfactory score on my Data Response. (AKA 100)

Dr Anthony’s response in the formative (practice) Data Response made it easy for me to recognize what to do in the summative one.

Thanks, Doctor!

The article was about tariffs and anti-dumping legislations between China and the U.S.

I felt like I understand this unit.

Protectionism

In this day and age, Free trade seems to be a favored concept by economists in terms of International Trade, whereas Protectionism is favored by Governments. Personally, I am a small advocate of Free trade at this point in time because it seems to have more opportunities to stimulate growth and increase the flow of resources and ideas internationally. Although, it is quite understandable why governments favor Protectionism because of how it aims to preserve jobs domestically and ensure the growth of small businesses in this ever changing and uncertain economy. If the pressure were not as great for governments to use a Protectionist approach in terms of trading with other countries, their respective countries may experience significantly higher growth, resulting in new job opportunities for those who loose their jobs, as well as other areas of enterprise which start-up businesses can pursue. For example, the US is continuously favoring a Free trade concept because of the large amount of outsourced companies located in countries such as India and China. On the other hand, US citizens are outraged at the companies that engage in outsourcing because it endangers their own jobs and firms due to their inability to produce as efficiently and more cost effective than other countries. Therefore, even though the Free Trade concept does not greatly assist domestic firms and individuals, in the long-run, I believe, the economy will flourish as countries begin to trade more vigorously with one another.

Real World Protectionism

Type of Protectionism	Definition	Real World Examples
Tariffs	A tariff is a tax levied onto an imported good or service.	The U.S. put a tariff on French cheese in order to protect the domestic and perhaps inferior production of cheese. http://www.guardian.co.uk/world/2009/jan/17/france-america-import-tariffs
Quotas	Import quotas are physical restriction on the quantity of a good that is imported into a country.	Russia puts a quota on the amount of meat imports such as foreign poultry and pork in order to protect the domestic farmers. The Russia raised the quota, however, in order to let more imports in. http://www.worldpoultry.net/news/russia-meat-import-quotas-for-2010-set-4617.html
Subsidies	Subsidies are financial assistances that are provided to suppliers in order to keep the market from declining.	The U.S. subsidizes renewable energies such as wind, solar, and geothermal energy in order to protect these more expensive forms of energy production. They are deciding whether to renew the subsidies. http://www.nytimes.com/2010/07/29/opinion/29thu3.html?_r=1&ref=crop_controls_and_subsidies

Robert Reich will destroy you

If you’re a republican who believes that the the discontinuation of the Bush tax cuts will be a tax increase that will stagnate the economy, Robert Reich will destroy you.

This article shows why exactly the Bush tax cuts should not be extended for the rich, and also proposes that we create a new tax cut for the lower-income residents of the United States/.

Reich claims that by not extending the tax cuts, the government will take 36 more billion dollars, $31 billion from billionaires.
If the government does indeed use its tax revenue to build and create services that benefit the poor sector of the United States, it will act just like Robin Hood, and greatly even the income distribution.
Reich goes out to say that if we use this opportunity to create another tax cut for lower income citizens, we will stimulate the economy and create more jobs and more business opportunities, creating a faster recovery from the recession that we would have with extended Bush tax cuts.

Kevinsdangerzone

Through my nostalgic reflection of IB year 1 economics, I have picked up on certain areas that I have had trouble with, and some of the same areas in which I still need to improve.
The economics exams depend greatly on the background knowledge of the test taker and therefore I have felt like I need to expand on it in order to score higher on my exams. Although it is best to expand general knowledge through reading a wide variety of articles regarding economics as well as news articles, I feel disinclined to do so due to the heavy workload of 12th grade. However, specific/selective reading may be enough to acquire enough economic background knowledge to use as examples in my economics IB exams.

Chinese housing market on the rise

“Security guards dressed as five-star-hotel doormen keep them in order before the sales centre opens for the first time.
Those queuing are hoping to be first in line to buy the best-located flats in an apartment building that has not yet been completed.
Similar scenes are being played out across Beijing, and in other Chinese towns and cities, as people rush to buy property as soon as it is built.
Some economists – and a number of government officials – worry that rapidly rising prices could lead to a bubble, and stoke inflation.
The Chinese government has over recent weeks moved to rein in bank lending in a bid to cool a market that could be growing too quickly.”

Although the article talks about Beijing, this is happening in all major cities in China. In Shanghai, floors and floors of towering apartment buildings are being bought simply for the purpose of investment. Prices are skyrocketing, and thousands of houses are just sitting there, unused. The aggregate demand for houses has increased dramatically in the year of 2009, and this is mostly due to the (over)confidence of the consumers.

Unless the owners of these houses soon find a use for them (renting or selling), this may end up being a very ill-advised investment.