...China - International Trade Why USA want to increase Chinese Exchange Rate As we all know, China is a big processing and export country, we can see many products all be made in China. Therefore, when the Chinese exchange rate increased, the demand of Chinese product for American companies and residents will be reduced, because the Chinese exchange rate increase, the cost of Chinese products will be increased at the same time, so they have to expend more dollars for Chinese products. The competition of Chinese products will be decreased in American market. For example, the price of one Chinese phone is 100 RMB that be exported to America with 8.264 exchange rate, so the price of this phone in America is $12.1. However, if the exchange increased to 7.0, and the price of this phone is $14.2. According to increase Chinese exchange rate, USA can reduce imports from China and this can be as a Non-tariff barriers. In addition, with the increase of Chinese exchange rate, China will import more products from USA, duo to the lower cost. Therefore, USA want to increase Chinese Exchange not only reduce the export of China, also increase the amount of export to China. Finally, China is the biggest creditor country for America and the amount of national debts is about 1.4 trillion. So the exchange rate increased, America can pay lesser money back for China with lower exchange rate. For example, if the exchange rate is 7.6 than the amount of national debts America have to pay for is 1.4...
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...Overview: The US government currently has over $16.4 trillion in debt and spends 40% more than the revenue it collects per year. This continues to be a highly debated topic within our legislative and executive branches of government. One reason the Federal Government’s major entitlement programs are difficult to control is the way they are designed. A second is that current budgeting process ignores long-term impacts of short-term expansions. A third is that these programs are not subject to regular review, like the other annual discretionary programs are. The means that Congress rarely evaluates the costs and effectiveness of entitlements except when it is proposing to expand them. Costs of healthcare continuing to rise, funding numerous war campaigns, and a broken tax system are all contributing to the widening deficit in the budget. It is quite clear that sacrifices must be made. The question remains: where do we begin? Background: Alexander Hamilton, the first Treasury Secretary, set up federal debt to pay off debt incurred by the Revolutionary War. Until the Great Depression in 1933, federal debt was used only to fund wars. In 1933, President Roosevelt began spending and raised the federal debt to around 40% of the GDP. From that point on, the federal debt has ranged from 122% of the GPD following WWII, to 50% of the GDP during the Cold War to the current value of 99.4% as presidential policies and goals changed (see Figure 1). During the end of the Clinton administration...
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...against the dollar a good one? Why or why not? Yes Warren Buffett’s decision to be against thedollar is a good one. Buffett is betting that American trade deficit will not be restored and the country’s practice of borrowing from abroad to pay for the current goods and services will not stop. The USA borrows from abroad to finance its trade deficit, on top of that the USA government spends more money than it takes from taxes. The budget deficit increases the gap between country’s national savings and national income and and also widens the deficit in the current account by necessitating the country to borrow more money from other foreign countries. This widened current deficit puts strain on the USA currency in the financial markets. If Americans are going to buy inexpensive imported goods and the USA government has a budget shortage, I think Warren Buffett is making a fantastic move by betting against the dollar. Between 2002 and 2007 the dollar has fallen by 40 percent. 2. Why has the United States developed such large current account deficits? I and a lot of people believe the United States has developed such a large current account deficit is the trade deficit. The USA is importing more goods and services more than it exports so it has held trade deficit since the late 1960s and this trade deficit has been mushrooming at an unbelievable rate since 1997. The increasing oil prices in the last few years has helped increased the current account deficit too. Another reason...
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...10, 2013 The College Dilemma In the U.S., having a college degree is the most important qualification for getting a skilled job position. Many young people want this kind of position because it is usually higher paying. Employers expect candidates to have at least a Bachelor’s Degree for any entry-level position, but the cost of tuition today is the highest ever. In the past, recent college graduates generally had an easy transition from school to starting a full time job. Today there are fewer jobs and more college graduates competing for those jobs. According to a USA Today article, “half of new graduates were jobless or underemployed in 2012” (USA). Because of this, university tuition should be lowered and student financial aid increased so that young people are not burdened with huge debt. The number of people who want to get a college degree is higher and higher every year. According to the National Panel Report, 75% of high school kids answered that they want to go to college right after graduating high school. It’s not only for high school kids, but also adults who want to go back to school to get a degree to continue their professional development (We). They expect to get a job with better benefits from getting a degree. Some students would say that they want to go to college for more education, but most students want to go because it will help them to get a job in the future. They realize that going to a four-year college is an unavoidable choice to survive in this...
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...Analysis: Debt-to-GDP ratio – United States compared to Germany Econ 201 Alexandria Walker University of Maryland University College Professor Mensah-Dartey Analysis: Debt-to-GDP ratio- United States compared to Germany United States Debt- to-GDP ratio In the last year the United States has painfully reached the net public debt to GDP ratio of 100 percent. This would be the federal government’s accumulated debt that is equal or has actually surpassed the United States Gross Domestic Product in 2010. After the debt ceiling limit was passed, the Treasury borrowed $238 billion in 2010. This brought public debt to $14.58 trillion dollars, slightly higher than the United States GDP in 2010, which was $14.54 trillion. It is believed that this is purely a domestic political issue. The international ramifications of the growing national debt are equally as important the domestic ones. After all, the United States primary creditors are overseas. The United States economy forms the bedrock of the global economy. Washington has the largest and most diverse economy in the world. Its currency is even more important, as the dollar is the currency used in most international transactions. This economic disaster stems from a troublesome history. The history of modern civilization is unique in that it contains some very simple figures that always act as causation for a certain result. In the case of debt, what is clear is that any country who sees its debt levels...
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...This article was downloaded by: [Edith Cowan University] On: 31 March 2015, At: 12:08 Publisher: Routledge Informa Ltd Registered in England and Wales Registered Number: 1072954 Registered office: Mortimer House, 37-41 Mortimer Street, London W1T 3JH, UK Development in Practice Publication details, including instructions for authors and subscription information: http://www.tandfonline.com/loi/cdip20 Globalisation Shalmali Guttal a a Focus on the Global South, CUSRI , Chulalongkorn University , Wisit Prachuabmoh Building, Bangkok, 10330, Thailand E-mail: Published online: 18 Nov 2010. To cite this article: Shalmali Guttal (2007) Globalisation, Development in Practice, 17:4-5, 523-531, DOI: 10.1080/09614520701469492 To link to this article: http://dx.doi.org/10.1080/09614520701469492 PLEASE SCROLL DOWN FOR ARTICLE Taylor & Francis makes every effort to ensure the accuracy of all the information (the “Content”) contained in the publications on our platform. However, Taylor & Francis, our agents, and our licensors make no representations or warranties whatsoever as to the accuracy, completeness, or suitability for any purpose of the Content. Any opinions and views expressed in this publication are the opinions and views of the authors, and are not the views of or endorsed by Taylor & Francis. The accuracy of the Content should not be relied upon and should be independently verified with primary sources of information. Taylor and Francis shall not be liable for any losses, actions...
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...How far do you agree that the Impact of the First World War was beneficial to the economy and society of the USA? At the start of the First World War the US economy was beginning to develop at a rapid pace and by the end of the war it was in an even stronger position this was due to impacts of the First World War such as an increase in industrial production, low rates of unemployment and improving living standards. However it can also be argued that the First World War damaged the US economy as the level of national debt went up and there was a brief recession during the years 1920-1921. The First World War also had an impact on society for example women in society changed dramatically and the 1920’s saw the birth of ‘The new Woman’. Although during the 1920’s, some freedoms were expanded others were curtailed such as prohibition which banned the sale of alcoholic drinks this had both negative and positive impacts on society in America. It can be argued that the impact of the First World War was beneficial to the economy, one reason for this is that industrial production increased between 1916 and 1918 by 39 per cent. This was due to the huge demand for war materials, imports from Europe fell and exports from the USA rose which lead to an increase in industrial production. In 1913 the USA produced about 32 per cent of the world’s industrial goods. The USA needed to import very little and most of what it produced could be sold to its rapidly growing population. Steel output...
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...Public debt External debt of Indonesia has been declined to around 28% in 2013. This speaks to a healthy condition contrasted with developed nations that are at present stuck in an unfortunate public debt. Thus, Indonesia's showed attractive decline in export percentage; from 179.7 % in 2004 to 97.4% in 2011. These percentages calculate the administration's capacity to make future instalments on its debts, therefore emphatically influencing Indonesia's cost of borrowings, government security yields and global credit assessments when this debt is as low as on account of Indonesia. This improvement is especially because of the judicious monetary arrangement methodology of the Indonesian government and consistence with financial principles that set cut-off points on the upper level of debt. Biggest Contributors to Government Debt in Indonesia Biggest creditors of Indonesia is united states and japan and other 25% is borrowed from the international organisation like world bank, asian development organisation and etc. The forecasts done about indonesia’s GDP again moderate sliding in governments debt due to appreciation in rupiah, reduction in interest rates, and robust economic growth. Debt of Indonesian to GDP Ratio from 2008 to 2015: There is only little impact in Indonesia’s debt ratio in macroeconomics. depreciation of currency in Indonesia is 30% and it would increase the public debt ratio about 25 % of GDP. The hike in real interests rates may have a little change...
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...taxes and spending and monetary policies, through which it manages the supply of money. In this paper, I will discuss the why high deficits of today will reduce growth rate of the economy in the future, look at the history of our nation’s debt and deficits, different elements that causes of deficit and why the cause actually matters, what role the fiscal and monetary policies have to lead to higher or lower budget deficits and how deficits affect the overall long-term economic growth and debt of the U.S. Let us first begin by learning the difference between the terms debt and deficit. In economics, the term deficit means a shortfall in revenue of a fiscal year. It is when the government’s revenue called receipts, which are collected taxes (payroll, corporate, excise, income and social insurance), fee revenues and tariffs that are called receipts are lower that what is spent called outlays. In other words, the federal budget deficit is the yearly amount by which spending exceeds revenue. The term debt is described as an accumulation of deficits so the national debt is the total amount of money owed by the government. It is calculated by adding all of the deficits minus the surpluses since the nation’s inception and you get the current national debt. According to Econintersect, “the estimated 2011 budget deficit is at almost $1.5 trillion, following deficits of $1.4 trillion in 2009 and $1.3 trillion in 2010.” ¶ 1. This is disturbing when measured as a percentage...
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...6th ‘13 Moises Rodriguez Abstract The central thesis of this paper is to address the main ideas of how and why the United State’s deficit, surplus and debt have an effect on today’s current events. This paper, will discuss the effects from taxpayer’s, future social security and Medicare users. Also, the unemployed individuals, even our fellow University of Phoenix peers have part in today’s politics. This essay will address the United State’s financial reputation on an international level, a domestic automotive manufacturing, and an Italian clothing company, and the importance behind the Gross Domestic Product (GDP). Fiscal Policy Economics is a daily issue that concerns personal and business financial activity. The United States is known as one of the strongest financial countries. It is complicated to understand how the United States deficit, surplus, and debt can affect the population economy. The economy can affect different areas and individuals, such as taxpayers, unemployment individuals, GDP, importer and exporter companies, college students, social security and Medicare users. The economic is not affecting only the present but will influence in the future financial activity. Unemployed individuals A deficit is a loss under payments and surplus is the excess over payments. Debt is equal to deficit minus surpluses. If the government has a surplus on the budge, it means there is money saved that can be used to generate employment. When a...
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...'The USA was hit by the Great Depression in 1929 because of increasing restrictions on international trade.' How far do you agree with this opinion? Use Sources 7, 8 and 9 and your own knowledge. The USA was hit by the Great Depression in 1929 because of increasing restrictions on international trade to a small extent, as it was indeed a significant factor in creating the onset of the Great Depression, as it acted as one of the long-term problems with the US economic system. Source 7 supports this argument, and suggests that it made world trade more difficult as it led to the USA not being able to 'expand its foreign markets as rapidly as its production'. However, other factors could also be considered to have started the Great Depression more significantly, with source 8 suggesting that it was due to long-term problems in the economy associated with a lack of purchasing power and the effects of the Wall Street Crash, along with source 9 demonstrating that it was due to the laissez-faire policies pursued by the Coolidge administration. The USA was arguably hit by the Great Depression in 1929 because of the combination of under consumption and overproduction linked to the maldistribution of wealth in US society during the 1920s. The problem with under consumption was mainly due to the fact that a substantial segment of the population that was farmers and workers in declining industries had not shared in the general prosperity of the early 1920s. In 1929, American farmers...
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...Of all the national movements in colonial countries, the Indian national movement was the most deeply and firmly rooted in understanding the nature and the character of colonial domination and economic exploitation. This exploitation in the country started with the entry of the Company in 1757. Better late than never, this exploitation was realised by 1860. The period 1875-1905 became a period of intellectual unrest and spreading national consciousness. The main reason for India’s poverty was identified as the drain of wealth to England. The nationalists undertook a vigorous agitation to get rid of this evil. They used all forms of public communication such as speeches, letters to the British newspapers, articles in journals, correspondence with officials, evidence before official commissions and committees, private correspondence etc; to communicate this message to a wider spectrum of people. It is no doubt due to the efforts of that men that we realised “the financial, political and intellectual drain” we were subjected to. They felt that what British can do is to lend India back it’s wealth to develop it’s resources.They say that drain is not only loss of wealth but also loss of capital. Drain not only cut current national savings but even diminished the existing stock of inherited national capital. They felt that drain also hindered industrial development, india’s way to economic salvation. The nationalists laid emphasis on the question ‘What was...
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...Introduction The purpose of this essay is to investigate and explain how the Treaty of Versailles affected the German economy. I find this subject relevant since it is a big event in European history. During the years after the First World War Germany had a lot of debts and faced a lot of reparation costs. Even though the meaning of most of the peace treaties was to encourage the world economy, re-build cities and maintain peace, not a lot of these goals were fulfilled. Background The First World War was a military conflict that included a lot of countries around the world. The war started at June 28, 1914 and lasted until November 11, 1918. The war was played out between the great power countries and they were divided in to two parts, the Central Powers (Germany, Austria-Hungary and Ottoman Empire) and the Entente (Russia, Great Britain, France and USA). When the war ended in 1918, negations began to try to come up with solutions to all the problems and crises that had been caused by the war. All the countries involved in the war gathered in France in 1919 to start the peace negotiations. An important treaty written during these negotiations was the Treaty Of Versailles. It was signed by Germany and the Entente.1 The Demands Germany was seen as being head responsible for the upcoming of WW1 and had caused the most damage to other countries; therefor the Treaty of Versailles included numerous demands that Germany had to obey. France got permission to occupy the coal-mines...
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...Stimulus Plan, a plan designed to quickly jumpstart economic growth and save millions of jobs. Barack Obama once said, “I’m pledging to cut the deficit by half by the end of my first term in office.” As of then, 2009, the national debt was at $10 trillion, now in 2012 the outstanding national deficit has reached an outrageous $16 trillion. In 2009 President Obama signed the $789 trillion American Recover and Reinvestment Act that helped push our national debt 23 percent higher, to $13.2 trillion, a new record at that time. Many citizens will argue that Barack Obama’s Stimulus Plan did do better than they had anticipated, however it added an excessive amount to our national debt. Nevertheless, the US shouldn’t attack President Obama before one realizes how much was spent on funding for Franklin D. Roosevelt’s successful New Deals. At the start of FDR’s presidency in 1933 the US National Debt was $22.5 billion and at the end of it, 12 years later, the debt was at $258.5 billion. FDR even caused a so-called Roosevelt Recession after producing an austerity budget which reduced government spending; therefore, causing the economy to tumble. It wasn’t until World War II did the American economy fully rebound and unemployment almost dissolve. According to USA TODAY’s quarterly survey of 50 economists, “President Obama’s stimulus package saved jobs – but the government still needs to do more to breathe life into the economy.” Without Obama’s stimulus plan...
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...VICTORIOUS TEAM Countries For The Project for the Period 2011 : 1] China 2] India 3] USA Team Members and Students IDS : Nikita Bhivate A2604 ( U.S.A.) Li Jianwei A2394 ( China ) Tingting Hao A2319 ( India ) MBA 531 International Financial Management. Prof. Jayant Kanitkar. INTRODUCTION : Introduction Of China : During the period from 2007 to 2011, the whole world has been suffering from global economic recession and financial crisis. From US subprime to EU sovereign debt crisis, China, as the second largest economy in the world, experienced internal and external economic impacts. In the year of 2007, China’s economic development reached its pick. With the expectation of CNY appreciation, hot money flooded into China. As a result of this, the price of investment asset surged up sharply. The housing price tripled, and the Shanghai stock index reached to a historical level of 6300 from less than 3000 with in one year. The wealth effect from the high investment asset price stimulated consumption. Moreover, China was keeping its high net exports trading volume and fixed asset investment. The GDP growth rate exceeded 10%. However, the financial bubble broke in the US, and a chain reaction directly affected China. In 2008, all economic indictors shown that China’s development slowed down. Stock market can be regarded as the forecaster of economic. The Shanghai stock index dropped to 1900 from 6300. Affected by recession in international...
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