http://www.vancouversun.com/news/Bank+Canada+keeps+interest+rate+unchanged/4600848/story.html
summery :
This article is about the bank of canada keeping its interest rate at 1.00% and there would be no increase in the interest rate. The central bank boosted its outlook for 2011 GDP growth by a half-percentage point and signalled economic slack shrank faster than anticipated. This is good news for everyone with a mortgage. However the bank of canada is unsure when the interest rate might go up. Canada's overall inflation is set to rise to 3 % in the coming month.
Wednesday, May 25, 2011
Recession
1. How did the Great Depression start?
The great depression started in the US starting with the fall in the stock prices that began on September 4 1929 and became worldwide news with the stock market crash on Oct. 29 1929. This day is known as Black Tuesday.
2. How did the current recession start?
The demand for housing properties started increasing due to high liquidity and low interest rates on mortgage loans. People started buying homes using these loans not knowing that this would in return cause residential property prices to increase. The prices increased exponentially and people who already owned homes, opted for refinance at lower interest rates.
At the same time, Banks were lending mortgage loans to everyone who asked for it, considering the property price hike. On one hand, they would get their money back even if the borrower doesn't repay the loans and on the other hand the banks were selling their loan products to investment companies who packaged them into MBS and sold them in the open market. This resulted in the bank getting back almost their entire loan amount which they started lending to further supreme customers.
The usual explanations include numerous factors, especially high consumer debt, ill-regulated markets that permitted overoptimistic loans by banks and investors, the lack of high-growth new industries, and growing wealth inequality, all interacting to create a downward economic spiral of reduced spending, falling confidence, and lowered production.
3. How did the government take part following the event? Were /are they successful attempts?
The Government took part in the great depression by introducing employment programs to help employ numerous people that were greatly affected by the depression. They also increased the interest rates to maintain the worth of the US currency. However their efforts did not help the situation greatly, until WWII as they needed a substantial amount of people to be employed.
During the current recession, the US government had handed out bail-outs to several corporations most notably: AIG, General Motors and Chrysler LLC. However they didn’t offer a bailout to Lehman Brothers and as a result, they filed for Bankruptcy.
4. What factors are present now that were not present during the Great Depression? (ie. Banking, online resources, etc.)
What is present now that wasn’t present during the Great Depression is probably credit card payment methods. People are able to apply for a credit card at a bank and with this card they are given the priviledge to be able to not pay for the “amount owed” right away but to have an extended period of time to pay the “loan”. What is bad about this however, is the fact that a lot of people don’t end up having enough money paying for their credit card spendings due to overly high credit limits.
5. How did these two affect United States’ GDP?
In the times of both the Great Depression and the current recession, the United States GDP decreased drastically. Around the 1920s, the United States GDP peaked at around $1 trillion dollars. However, since they were in a depression, the dollar value went down. Many people lost their jobs due to a decrease in the consumer behaviours. As a result of all these events happening, they contributed to the low GDP of United States of $600 billion. The United States lost over $400 billion during the Great Depression.
Same with the current recession, it has dropped the United States GDP, decreasing its dollar value.
6. Reflection: In your own words, tell me which one has made more of an impact on the world.
I believe the Great Depression in the 1920s has made a bigger impact on the world because at that time, no one was ready for this to happen. No one knew how to respond to such a great event that changed United States overnight. But as the years passed, the country has learned to cope with the consequences, therefore, if anything like this was to happen again, the people and nation would have more preparation instead of getting hit all of a sudden with the Great Depression and going into a mess.
Sources:
http://answers.yahoo.com/question/index?qid=20080220160718AAeaThR
http://wiki.answers.com/Q/How_did_your_current_recession_start
http://en.wikipedia.org/wiki/Recession
http://en.wikipedia.org/wiki/Great_Depression
http://www.actionplan.gc.ca/eng/feature.asp?featureId=18
The great depression started in the US starting with the fall in the stock prices that began on September 4 1929 and became worldwide news with the stock market crash on Oct. 29 1929. This day is known as Black Tuesday.
2. How did the current recession start?
The demand for housing properties started increasing due to high liquidity and low interest rates on mortgage loans. People started buying homes using these loans not knowing that this would in return cause residential property prices to increase. The prices increased exponentially and people who already owned homes, opted for refinance at lower interest rates.
At the same time, Banks were lending mortgage loans to everyone who asked for it, considering the property price hike. On one hand, they would get their money back even if the borrower doesn't repay the loans and on the other hand the banks were selling their loan products to investment companies who packaged them into MBS and sold them in the open market. This resulted in the bank getting back almost their entire loan amount which they started lending to further supreme customers.
The usual explanations include numerous factors, especially high consumer debt, ill-regulated markets that permitted overoptimistic loans by banks and investors, the lack of high-growth new industries, and growing wealth inequality, all interacting to create a downward economic spiral of reduced spending, falling confidence, and lowered production.
3. How did the government take part following the event? Were /are they successful attempts?
The Government took part in the great depression by introducing employment programs to help employ numerous people that were greatly affected by the depression. They also increased the interest rates to maintain the worth of the US currency. However their efforts did not help the situation greatly, until WWII as they needed a substantial amount of people to be employed.
During the current recession, the US government had handed out bail-outs to several corporations most notably: AIG, General Motors and Chrysler LLC. However they didn’t offer a bailout to Lehman Brothers and as a result, they filed for Bankruptcy.
4. What factors are present now that were not present during the Great Depression? (ie. Banking, online resources, etc.)
What is present now that wasn’t present during the Great Depression is probably credit card payment methods. People are able to apply for a credit card at a bank and with this card they are given the priviledge to be able to not pay for the “amount owed” right away but to have an extended period of time to pay the “loan”. What is bad about this however, is the fact that a lot of people don’t end up having enough money paying for their credit card spendings due to overly high credit limits.
5. How did these two affect United States’ GDP?
In the times of both the Great Depression and the current recession, the United States GDP decreased drastically. Around the 1920s, the United States GDP peaked at around $1 trillion dollars. However, since they were in a depression, the dollar value went down. Many people lost their jobs due to a decrease in the consumer behaviours. As a result of all these events happening, they contributed to the low GDP of United States of $600 billion. The United States lost over $400 billion during the Great Depression.
Same with the current recession, it has dropped the United States GDP, decreasing its dollar value.
6. Reflection: In your own words, tell me which one has made more of an impact on the world.
I believe the Great Depression in the 1920s has made a bigger impact on the world because at that time, no one was ready for this to happen. No one knew how to respond to such a great event that changed United States overnight. But as the years passed, the country has learned to cope with the consequences, therefore, if anything like this was to happen again, the people and nation would have more preparation instead of getting hit all of a sudden with the Great Depression and going into a mess.
Sources:
http://answers.yahoo.com/question/index?qid=20080220160718AAeaThR
http://wiki.answers.com/Q/How_did_your_current_recession_start
http://en.wikipedia.org/wiki/Recession
http://en.wikipedia.org/wiki/Great_Depression
http://www.actionplan.gc.ca/eng/feature.asp?featureId=18
Monday, May 2, 2011
questions
how long do you think it's going to take to get all virtual cards? how many years?why?
I think it will take about 10-20 till we all get virtual cards. If everyone is using one virtual card( credit debit driver license) for everything than the people who are creating these cards must make sure its safe.
who will not be on board with this new virtual wallet?
I think people who don't believe in new technology would be against the new virtual wallet. Especially people in the older generation, like my parents aunt, and grandparents they don't even know how to use a computer. Almost everything now is online like you can now read books online, watch tv on the computer and banking and paying your bills online.
what companies are going to be affected negatively by this? name 3
I think credit card companies such as Master card , Visa and amercian express. after the new virtual card comes out people would slowly stop using credit cards. as people stop using their companies credit card the company would have to close down.
who is going to make money from this? name3
Cell phone companies ( sony ericson , samsung , htc android ) , wireless internet ( shaw , bell , roger) and Apple company would make a lot of money after virtual cards are introduced. All these companies would be making millions of dollar if people accept the new virtual card system.
I think it will take about 10-20 till we all get virtual cards. If everyone is using one virtual card( credit debit driver license) for everything than the people who are creating these cards must make sure its safe.
who will not be on board with this new virtual wallet?
I think people who don't believe in new technology would be against the new virtual wallet. Especially people in the older generation, like my parents aunt, and grandparents they don't even know how to use a computer. Almost everything now is online like you can now read books online, watch tv on the computer and banking and paying your bills online.
what companies are going to be affected negatively by this? name 3
I think credit card companies such as Master card , Visa and amercian express. after the new virtual card comes out people would slowly stop using credit cards. as people stop using their companies credit card the company would have to close down.
who is going to make money from this? name3
Cell phone companies ( sony ericson , samsung , htc android ) , wireless internet ( shaw , bell , roger) and Apple company would make a lot of money after virtual cards are introduced. All these companies would be making millions of dollar if people accept the new virtual card system.
Tuesday, April 5, 2011
chapter 6
article:
http://www.vancouversun.com/business/WestJet+flew+fuller+planes+March+while+raising+fares/4562030/story.html
http://www.vancouversun.com/business/WestJet+flew+fuller+planes+March+while+raising+fares/4562030/story.html
Summary:
This article is about Westjet raising their airfare in March but at the same time they have a fuller flight. This is due to the increasing oil price recently. Oil fuel is flights biggest cost which caused airfare prices to go up. Westjet’s traffic levelled rose 13.3 percent last month. (This is measured in revenue passenger miles.) Even though airfare is going up people are still purchasing them. The numbers of customers who purchased the airfare improved and set a good foundation for further growth for the Westjet Company for the peak seasons approach.
Connection:
The aggregate demand in this article is price. Aggregate demand is the total demand for goods and services in the economy. The airfare for Westjet has increased last month in March due to increased oil price. The increase in airfare didn’t have any effect to the economy. People are still rapidly buying airfare to go travel. This even raised the travel level for Westjet. Airfare will probably increase as gas prices will probably go up in the future.
Reflection:
I think airfare going up won’t affect much people only the ones that travels a lot. This will only affect people who like to travel around. I also believe that airfare prices would go up in the future due to oil prices. I think if people want to go on vacations or travel around the world they should go now before the airfare tickets go up again. Ticket prices will especially go up during holiday times, such as Christmas, spring break and summer.
Wednesday, March 2, 2011
CH: 5 blog - US unemployment rate hits seven-month high
article : http://www.bbc.co.uk/news/business-11913196
summery:
The unemployment rate has been getting higher and higher in the last few months in the United States. Even though they got 39000 new jobs in November the employment rate still isn't going up due to discouraged workers. There are 9.8% amercian's that are unemployed right now, it increased .2% in the last 3 months of December. People in US try to improve on their job marketing hoping that more people would start working again. However this didn't happening, people didnt start looking for jobs. This is due to failure of US job creation to keep up with the growing population. If people stayed unemployed the numbers would go up for unemployment. Also citizens have already been out of work for more than 26 weeks.
connection:
This article is about the hidden unemployed people in the US. This means that people that are unemployed isn't seeking for a new job because they don't think there is a suitable job out there for them. If there were better suitable jobs out there for people than more people would start looking for jobs actively. There's this static survey they have that shows people who have looked for work int he last six months and not just the last four weeks.
reflection:
I think the unemployed rate for US is really high because they don't have a wide range of job selection for people. They should put more variety in their jobs,so people would get to pick what is more suitable for them.Most of the jobs that are out there are part-time jobs. They should more full time jobs than than part time jobs because most people that are unemployed are adult. They probably would like to look for a full time job rather than a part time jobs. US should really make a change in their economic system before even more people become unemployed.
summery:
The unemployment rate has been getting higher and higher in the last few months in the United States. Even though they got 39000 new jobs in November the employment rate still isn't going up due to discouraged workers. There are 9.8% amercian's that are unemployed right now, it increased .2% in the last 3 months of December. People in US try to improve on their job marketing hoping that more people would start working again. However this didn't happening, people didnt start looking for jobs. This is due to failure of US job creation to keep up with the growing population. If people stayed unemployed the numbers would go up for unemployment. Also citizens have already been out of work for more than 26 weeks.
connection:
This article is about the hidden unemployed people in the US. This means that people that are unemployed isn't seeking for a new job because they don't think there is a suitable job out there for them. If there were better suitable jobs out there for people than more people would start looking for jobs actively. There's this static survey they have that shows people who have looked for work int he last six months and not just the last four weeks.
reflection:
I think the unemployed rate for US is really high because they don't have a wide range of job selection for people. They should put more variety in their jobs,so people would get to pick what is more suitable for them.Most of the jobs that are out there are part-time jobs. They should more full time jobs than than part time jobs because most people that are unemployed are adult. They probably would like to look for a full time job rather than a part time jobs. US should really make a change in their economic system before even more people become unemployed.
CH:4 blog Tax revenue to grow 18.5% to Rs 9.3 lakh cr
article: http://www.business-standard.com/india/news/tax-revenue-to-grow-185-to-rs-93-lakh-cr/127333/on
summary :
This article tells us about how tax revenue in India increased by 18.5% to meet at Rs 9,32,439.88 crore. Finance Minister Pranab Mukherjee stated that he estimated that the direct tax revenue will be at loss of Rs 11,500 crore for the year. In return, proposals for indirect taxes are estimated to result in a revenue gain of Rs 11,300 crore. This is because the increase in income tax slabs will reduce revenue. But the expansion of the service tax will have the opposite effect in indirect tax.
connection:
The revenue in India increased by 18.5% which indicates that the people in the country have been spending a lot of money. This indicates that the direct tax is increased which causes us to reflect on how the Indians are living through this high tax rate. The government is increasing tax to help their funding on things such as cancer research, school fees and many more. This reflects back onto the citizens of India and makes us wonder if this really helps the people in a good way.
reflections:
This surprises me because i expected that tax revenue would increase but I never imagined that it will increase by 18.5%. This number is an accountable number considering that it is a huge amount of revenue increase since last year. This makes me wonder how the people in the country live through this high tax rate. I don't think India should increase the tax because it only makes it harder for the peo.ple in India to support their family
summary :
This article tells us about how tax revenue in India increased by 18.5% to meet at Rs 9,32,439.88 crore. Finance Minister Pranab Mukherjee stated that he estimated that the direct tax revenue will be at loss of Rs 11,500 crore for the year. In return, proposals for indirect taxes are estimated to result in a revenue gain of Rs 11,300 crore. This is because the increase in income tax slabs will reduce revenue. But the expansion of the service tax will have the opposite effect in indirect tax.
connection:
The revenue in India increased by 18.5% which indicates that the people in the country have been spending a lot of money. This indicates that the direct tax is increased which causes us to reflect on how the Indians are living through this high tax rate. The government is increasing tax to help their funding on things such as cancer research, school fees and many more. This reflects back onto the citizens of India and makes us wonder if this really helps the people in a good way.
reflections:
This surprises me because i expected that tax revenue would increase but I never imagined that it will increase by 18.5%. This number is an accountable number considering that it is a huge amount of revenue increase since last year. This makes me wonder how the people in the country live through this high tax rate. I don't think India should increase the tax because it only makes it harder for the peo.ple in India to support their family
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