Project 4, due Friday Nov. 6, present a 1-page outline of your brand presentation. List the key points that you plan to make about your brand. Upload it to Project 4 in ADI. Only one person from the group needs to do this.
For Friday Nov. 6: Read Mandel Chapter 8, Inflation, in Contents in ADI.
Readings from "The Economics Book", all having to do with the role of
government in the economy. All these chapters are short. Page numbers
and ebook locations are listed.
Readings for Monday Oct. 26
p. 64 - Make taxes fair and efficient, Location 1162
p. 76 - Borrow now, tax later, Location 1444
p. 130 - Make one person better off without hurting the others, Location 2467
p. 140 - The poor are unlucky, not bad, Location 2695
Readings for Friday Oct. 30
p. 100 - Let the ruling classes tremble at a Communist revolution, Location 1868
p. 142 -Socialism is the abolition of rational economy, Location 2739
p- 148 - Capitalism destroys the old and creates the new, Location 2839
p. 282 - The East Asian State governs the market. Location 5506
Final project
Project 1, due Monday, Oct. 26. Each work group will pick a brand (or suggest a topic for the professor's approval). You can all enter this document and edit it to show which brand your group has chosen. Those who act sooner get first choice. If you have a different proposal, put it at the end of the document.
Project 2, due Friday Oct. 30. Find 10 sources, you plan to use for your final project: books, company annual reports, industry-focused magazines, news articles, etc.
The
sources can be in Spanish or English. Write a sentence or two in
English about why this source is relevant to the study of your brand.
Be sure to include your
brand's name and names of all the team members on the document. Upload in Project 2 in ADI. Only one person from the group needs to do this.
Project 3, due Monday Nov. 2. Identify the largest competitors by
number of employees, revenue or market share that compete with your
brand. Upload your document to Project 3 in ADI. Be sure to include your
brand's name and names of all the team members on the document. Only one person from the group needs to do this.
Project 4, due Friday Nov. 6, present a 1-page outline of your brand presentation. List the key points that you plan to make about your brand. Upload it to Project 4 in ADI. Only one person from the group needs to do this.
What is an outline? It simply lays out how you plan to organize and present your information. It could look something like the image below.
In simple terms, monetary policy describes the tools used by a central bank to control the supply of money in the economy. This increases or decreases the flow of money and thus increases or decreases economic activity.
On the other hand, Fiscal policy describes how a government's chief executive and congress pass laws to 1) raise money (mainly through various taxes) and 2) spend money. Fiscal policy involves making decisions about what the government believes should be their spending priorities, such as national defense, public safety, public health, public education, scientific research, public welfare, social security, pensions, and so on.
Mandel Chapter 11 (it's in ADI-Contents-Mandel Chapters) goes into great detail, but this graphic captures several key points.
National debt as a percentage of GDP
A key question for politicians and government officials to make on Fiscal Policy is: Should we borrow money to pay for programs if we don't generate enough from taxes. The risk of borrowing is that you accumulate more debt than you can pay back. Many governments have been adding debt rapidly.
Supposedly, the debt of a well managed government should not need exceed 60% of GDP (this metric is part of Exercise 4). But look at the recent national debt figures. As you can see in the chart below, the euro zone average in December 2019, before the effects of the corona virus, was 84.1%. The U.S. was at 107% and Spain was at 95.5%. Those percentages are now much higher for all countries as they borrow and spend to reverse the financial crisis. We will talk more about this on Friday.
Readings for Monday Oct. 19
1. "World Happiness Report, 2018", Read p. 17, the predictors of happiness; pp. 20-21, Finland is the happiest country, and where does your country rank; pp. 25-27, U.S. and Spain's happiness declined, but Venezuela the most; pp. 114-115, why are Latin Americans so darn happy?
2. From "The Economics Book".
p. 196 Government should do nothing but control the money supply. Location 3727
p. 202 The more people work, the higher their bills. Inflation. Location 3834
3. Mandel, Chapter 12, Monetary policy, on ADI.
You might like . . .
The Indicator podcast "The Fed's sweet spot for interest rates" (transcript here) is a really good explainer on monetary policy, how the central bank's policy on interest rates can stimulate the economy (which can cause inflation), or slow down the economy (when inflation is too strong.)
Students
also got more credit for answers that were well expressed with good grammar and
spelling.
For each question below, I have included a student answer that I thought deserved full credit. However, these were not the only acceptable answers.
Q1. President orders that the price of eggs will be half the current market price. A good student answer is below.
If
the sale price of eggs gets cut by half, egg producers will not have any
motivation to produce eggs anymore.They will begin to look for alternative
revenues as their margins will get cut off.
If egg producers start to look for alternative revenues because of egg prices
dropping, this will lead to a shortage of eggs.Egg consumers would most
probably purchase more eggs, which would potentially cause a shortage in
supply.
It is likely that store owners run out of eggs and stop making a profit as high
as they could make before because producers could charge the same cost for the
eggs as before this price cut.If the sale of the eggs from egg producers to
supermarket increase this would contribute to the shortage.
In conclusion,if the eggs' prices would get cut in half by law,this would most
probably lead to an egg shortage,causing eggs to get sold at a higher price on
the black market.
The best answers to this question pointed out that this situation leads to shortages and a black market.
Points were reduced for answers that suggested producers will produce more eggs, consumers get more eggs, making everyone happy.
Readings for Friday Oct. 16, in “The Economics Book” about Macroeconomics and GDP (PIB)
Exercise 4: This is a group exercise. WORK IN THE SAME GROUPS YOU WERE IN BEFORE. It is designed to have you analyze several key economic indicators of any country you choose. Download this document and fill it out. Upload your spreadsheet or PDF in Attach Files below. Deadline is Friday, Oct. 23, before class. Can't find the data? Here are some authoritative sources.
Suggestions for Exercise 4: Some countries report numbers for inflation, unemployment, and central bank interest rates by yearly average, by quarter, or by month. Annual average is preferred, but use what's available. Be consistent.
Readings for Monday Oct. 19
1. "World Happiness Report, 2018", Read p. 17, the predictors of happiness; pp. 20-21, Finland is the happiest country, and where does your country rank; pp. 25-27, U.S. and Spain's happiness declined, but Venezuela the most; pp. 114-115, why are Latin Americans so darn happy?
2. From "The Economics Book".
p. 196 Government should do nothing but control the money supply. Location 3727
p. 202 The more people work, the higher their bills. Inflation. Location 3834
3. Mandel, Chapter 12, Monetary policy, on ADI.
You might like . . .
The Indicator podcast "The Fed's sweet spot for interest rates" (transcript here) is a really good explainer on monetary policy, how the central bank's policy on interest rates can stimulate the economy (which can cause inflation), or slow down the economy (when inflation is too strong.)
Overall you did well on this research. Here is the link to the information from the 20 groups; I've summarized some of the information (if you have trouble opening the link, sign in to your university account).
The research is not easy and not straightforward. It is the kind of research that your boss might ask you to do about a competitor if you were working at a bank. Sometimes these banks make it difficult for a consumer to find the real, true cost of a loan, or the real true rate they will receive for their deposits. You have to dig below the surface.
On the spreadsheet, notice the pattern of interest rates on auto, mortgage, and credit card loans. The interest rate is the price the bank is placing on the loan; the higher the risk of the type of loan, the higher the interest rate. The banks pay a much lower interest rate to depositors; they then turn around and lend those deposits at higher rates to other customers.
You will notice that some groups researching the same bank came up with different numbers. In some cases it's because more detail was needed. For example, Santander offers 3% interest on deposits--much higher than anyone else in Spain--but only if the depositor maintains a balance of at least 3,000 euros. There was also a lot of variance on credit card rates--possibly because they offer a variety of products.
