Price ceiling and wage control in different states

Price ceiling is described as the way in which government uses its powers to regulate prices of products. Suppliers, producers and customers are the key stakeholders in marketing when using c ceiling. Price ceiling has both advantages and disadvantages on the market. Producers cannot hike prices of products when the government uses price ceiling even during inflation. Suppliers are also regulated on the prices they will sell their products which benefits customers (Gwartney, 2009). Price ceiling have impacts on the paper producing industry since regulating prices will benefit customers but will make suppliers incur losses.

When the US government imposes tariffs and uses price ceiling, producers will incur looses while customers will be advantaged. This change will influence negatively on the economy since the wood is imported on high prices from Canada. The government should not use price ceiling since the economy will be affected negatively. Producers and suppliers will not involve themselves in a business which they are incurring looses thus the quality of papers produced will be low (Gwartney, 2009).

Wages and rent expenses should be minimal in each country. The government is an important factor in the market since some suppliers and producers make their prices higher than given standards. Though the government is useful in controlling prices, it should be careful in order to avoid limiting producers and suppliers from supplying quality and quantity products (Gwartney, 2009). Price controls are important and beneficial to citizens of a given state thus the government should control prices in a standard way, which will benefit both customers and suppliers.

Different states have different controls over the wages. The controls should be standard in different countries considering the economic status of the states (Gwartney, 2009). The wage control rate in my state is different from other states since the government policies are different in those states.

 

 

 

 

 

 

 

 

References

Gwartney, J. D. (2009). Macroeconomics: Private and public choice. Mason, OH: South-  Western Cengage Learning.

 

 

 

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Emerging economies

Wal-Mart Company expansion to Africa is one of the achievements it has made lately. It is increasing its stores in South America Johannesburg in particular. It also targets developing countries like Angola and Nigeria. It is expanding the Massmart Company in West Africa in hope of increasing its stores to East Africa. It makes its progression with leadership of C. Douglas Mcmillon as its chief executive officer. I propose that Wal-Mart expansion to south, west and east Africa will increase it sales since it is a well known international company. Nigeria as an emerging economic is politically and economically (Bingley 362) stable which I would recommend the CEO Wal-Mart to consider.

           Nigeria is a member of world international organization making it suitable since it has international links. Nigeria is involved in government revenue collection activities and trade restrictions such as quotas and tariffs. Introduction of Wal-Mart Company in Nigeria will generate more sales and profits since the country is corruption free and investors are encouraged (Bingley 362). The communication system in Nigeria is modern where communication systems such as computers and telephones are widely accessible. Transport system is modern in Nigeria with modern superhighways which will make transportation of products easier, faster and convenient. The currency in Nigeria is widely transferrable since it is a Nigerian Naira and can be converted easily to the US dollar. The labor market in Nigeria is mainly made up of educated people as well as skilled workers (Rugraff 110). The education system in Nigeria is well catered for with less number of dropouts. I would recommend Nigeria as a convenient company for Wal-Mart to venture its business. The health issue is being addressed in Nigeria. It is improving its health care systems in order to support sick people especially women and children. I would recommend Wal-Mart Company to open its stores in Nigeria for better profits.

 

 

Works cited

Corporate Governance in Less Developed and Emerging Economies. Bingley: Emerald Jai, 2008. Print.

Rugraff, Eric, and Michael W. Hansen. Multinational Corporations and Local Firms in Emerging Economies. Amsterdam: Amsterdam University Press, 2011. Print.

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Global Economics

Joseph Stiglitz and Jagdish Bhagwati are economists who discuss the issue of globalization differently though they come to agreement to some point. They both view globalization as a positive progress in countries globally. They both focus on ways of improving globalization in order to make it useful to all people within the globe. They support that globalization leads to economic advancements to most countries since it focuses on improving people’s economic status. They both agree that globalization should be supported by governments and other legal acts for it to become successful. Different countries are helped by globalization differently meaning that governments support is necessary. Economic policies of different countries favor globalization differently. They both agree that globalization is made possible and successful with proper management and good policies. They both agree that globalization (Jagadīśa 24) has increased economic status of most less developed countries. Trade and interaction between such countries and developed countries has been made possible through globalization. They both agree that globalization is necessary and trade should be done freely in order to improve the economy.

The economists however differ in some factors. Stiglitz suggests that globalization (Stiglitz n.p) is favored by international monetary organizations while Bhagwati suggests (Jagadīśa 24) that it is a social activity. He says that globalization has created social interaction between different people internationally unlike Stiglitz who suggest globalization has led to disagreements. Stiglitz discusses globalization (Stiglitz n.p) in terms of economic policies and advantages only while Bhagwati discusses the social policies and impacts of globalization. He also suggests the advantages of globalization both economically and socially. Bhagwati says that both private sectors and public sectors should rise and support improvement of globalization. On the other hand Stiglitz thinks that public sectors and the government should be responsible for improving globalization. Globalization should be a continuous process as Bhagwati suggests while Stiglitz thinks it should be a first process.

 

Works Cited

Jagadīśa, Bhāgavatī. In Defense of Globalization. New York, N.Y., [etc.: Oxford University Press, 2004. Internet resource.

Stiglitz . J (director). Retrieved from; https://www.youtube.com/watch?v=sV7bRLtDr3E&feature=youtu.be

 

 

 

 

 

 

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 Australia Economic Report

 Introduction

This article is about Steen Jakobsen who works in the economic department since he was a teenager. Jakobsen says that the economy of the United States is not improving further. He continues to say that in the last few years cold weather has been used as a justification for decline in employment services, marketing services, gross product tremendous decrease and decline in the manufacturing industries and businesses. Jakobsen is seen to make predictions in the current economic conditions. He made predictions for the Saxo bank including Germanys economic down fall and French oil supply declining by 40%. He warned the Australian economists’ especially regional investors of depending much on the current economic gains in the market. Low interest rates should not be associated with an economic gain. The high rate of unemployment and decline in productivity as he says signifies a loss in the economy not a gain as many people mistake. He says that Australia is the only country where housing marketing is acceptable and portraying a gain in that market. The unions in Australia advocate for high rates of payment when the productivity is actually declining suggesting that the economy is in danger. Australia refers itself as being lucky whereas its economy is in danger as it lags behind other countries in the economic status especially because of its mining industry. This report will analyze the economic growth rate of Australia, microeconomic and GDP as well as inflation rate in Australia which affects economic growth and development

Economic concepts and theories applied

According to the economic concept of scarcity, jakobsen suggests that Australia is facing difficulties in the mining industry. The resources since they are non renewable are becoming scarce which signifies a decline in the economy of Australia. The market system in Australia is not reliable enough since many customers do not enjoy most things because of scarcity. The economy of Australia is made up of 68% GDP. Economic growth and development in Australia is mainly as a result of the mining and agricultural sector where products are exported to countries in Africa (Baker, 2014). The mining sector contributes 10% of the GDP with 9% of other mining services making it to 19% of the total Australian GDP. The Australian security exchange is the largest exchange in Australia based in Sydney where it is ranked 9th in the globe. Australia is seen as one of the countries with the biggest companies and industries globally. Australian dollar is commonly used in the states in Australia (Baker, 2014).

Economic history of Australia

Annual percentage growth in real (chain volume) GDP per capita since 1961

The GDP growth rate is currently at 4.3%. It has increased from the research carried out in the previous years. The economic growth has faced struggles especially in 2013 where it is hoped that it will pick well this year. Elections tampered with the economic growth in 2013. The mining industry which attracts many regional and international investors is rising in 2014. The US economy decline as well as China’s affected the economic growth of Australia in 2013 which made it have a negative impact in 2014 (Baker, 2014). The rate of unemployment is declining in this year which will boost the economic growth rate. The Reverse bank of Australia is currently cutting off high interest rates where it will increase them later in the year as economic growth returns back to normalcy. Share markets are in support that the economy is improving as a result of high levels of employment and growth in business investment. This improve in economy signifies excellent revenue collection as well as profits (Baker, 2014). Australian people adapt a conservation culture in the past few years. They are used to saving instead of spending where most of their finances stay at the banks. Consumers in this country are used to online shopping services which helps them compare different products from different companies with the help of internet. The Aussie dollar is currently enabling regional retailers gain profits since it has made it possible for all shoppers globally shop online. Increase of Conservatism means that low interest levels will remain as well as inflation rate remaining controlled to required levels (Meredith & Dyster, 2012). For the revenue to be made standard, retailers have to reduce costs of products and improve customer care services in order to maintain the margin. Global competition is always present therefore for Australia to maintain its economic rise; the Aussie dollar must remain easy.

Unemployment rate in Australia

The rate of unemployment in Australia was constantly high in the past years. Currently Australia is reducing the numbers of unemployed individual with the aim of improving its economy. The teenage together with youth unemployment rate is of great concern in the country. Up to the year 2013 the rate of unemployment was 10.4% with many part time workers as well as casual workers. The rate of unemployment has decreased from 10.4% to 5.2% currently. This signifies a positive impact on the economy of Australia. Australia has suffered economic decline because of unemployment issues which it is currently bringing it to an end. Different media differ in defining the unemployment rate where the Australian government is questioned over the issue of unemployment.

 

High unemployment levels leads to a negative mark on the GDP resulting to decline in economic growth rate. Currently and especially in 2014, it is seen that unemployment level is decreasing signifying a positive growth in the economy. High employment rate signifies reduction in the rate of inflation. The recession in Australia impacted negatively on the employment rate which has been recovered currently as employment opportunities are now available.

GDP growth and inflation

For a country with a current GDP of $ 1.521 trillion USD, Australia poses as a country with high potential, as well as many opportunities for investment. In addition to its projected growth in the backdrop of stable political environment, scientific and technological advances, the commercial boom and favorable climatic as well as Geographical aspects, Australia will continue to attract investment (Meredith & Dyster, 2012). Its immunity from the current Aussie crisis has been instrumental in attracting investment away from the traditional Australia market, as well as the flooded Chinese market. All these are achieved using political economic analysis results. Increase in the inflation rate suggests a decline in economic development. The economic decline of China and United States affects the growth and GDP of Australia. The mining and agricultural sector has a big impact on the GDP of Australia as well as the government budget. Australia is a well known exporter of agricultural and mining products which boost its economy (Meredith & Dyster, 2012).

Australian GDP growth and inflation   

  Macroeconomic policy in Australia

The government of Australia currently and in the past has always worked to achieve positive economic growth, internal and external balance in the current economy. The objectives are achieved in order to sustain a positive rise in economic growth as well as regulating the rate of inflation in the country. The objectives are achieved in order to reduce liabilities and huge debts to other countries. The objectives promote growth in the economy as well as national development and growth. Macroeconomic policy is used by the government in order to minimize variations of the international business sequence. This is done by manipulating demand to enable continuous growth thereby enhancing low levels of inflation as well as unemployment. Macroeconomic policy is used hand in hand with the microeconomic policy involving supply in order to enhance success of the economy. In order to pressure the demand as well as economic growth two policies are used by the government which include fiscal together with monetary policies. Fiscal policy involves the use of the budget as a way of influencing economic aims by varying total expenditure and revenue of the government. This in turn changes the level of economic development with either excess or shortage in the fiscal policy as well as a balanced budget. The budget is capable of influencing the economy of Australia. The economy can too cause an impact in the result of the economy. Reduced rate of spending as well as required government revenue leads to a positive gain in the economy. Economic Growth can be outcome when the budget of the government suggests a reduction in the rate of taxation and an increase in the government expenses and spending.

Conclusion

As a well endowed country, with a large manpower resource, favorable climatic and geographic conditions and strategic placement, Australia is well placed to reap the benefits of international trade. As is the case with such countries, corruption poses as a major hindrance to the realization of its objectives, but the recent drive at reducing this vice has served to attract foreign investment (Anderson, 2009).The execution of FDI analysis has markedly assisted to improve the country’s chances in enabling it to improve the chances of foreign investment within its boundaries as evidenced by the sharp rise in foreign direct investment in recent times. Such is expected to be instrumental in realizing the forecasted national growth to above 3 trillion in the future. Australia being a country rich in natural resources and man power should work hard to maintain its upward trend in economic growth (Anderson, 2009). Economic growth is necessary and should be continuous. Australia should create employment facilities to its people in order to achieve positive results in the economy.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

References

Anderson, K. (2009). Australia's economy in its international context: The Joseph Fisher   lectures. Adelaide: University of Adelaide Press.

Baker p (2014) Australia not lucky just isolated says Saxo Bank chief economist Steen Jakobsen

Meredith, D., & Dyster, B. (2012). Australia in the global economy: Continuity and change. New York: Cambridge University Press

 

 

 

 

 

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 Financial Crisis

            The financial crisis has been described as one that figuratively hit the American economy ‘below the waist’. Yet, to date, the reason behind the emergence of this crisis is yet to be known to the American public. There have been attempts by numerous economists to give a solid conclusion to this enigma. However most of these conclusions and reasoning have culminated in plenty of contradictions. Despite this, there are a number of recurrent conclusions that come out as being among the factors that contributed to the great financial crisis. These include over-dependence on investments using easy credit, accountability oversight, and an overlap of investment and commercial banking. John Cochrane of the University of Chicago offers insightful information regarding the financial crisis in the econ podcasts. . His main arguments explore the causes of the financial crisis, the role of the Troubled Assets Relief Program (TARP), and the reasons why economists should not blame the mark-to-market accounting for the crisis (Roberts, 2009). This paper explores Cochrane’s reasons for the financial crisis as well as his thoughts as far as Troubled Assets Relief Program (TARP) is concerned.

Cochrane on the origin of the financial crisis

            Cochrane insists on the fact that reduced accountability over the years could not have been the reason behind the financial crisis. He believes risks are inevitable thus the fact that that poor investment decisions coupled with haphazardly made investments could not have led to failures in the American banking system. I am not of the same opinion. Indeed, risk is part and parcel of human life. However, risks taken blindly, more so where finance is concerned, can be detrimental to any individual. This is more so where there is a system in place that is greatly interlinked and where financial institutions inter-depend on each other. In such a case, if a single unit or a cluster of units in this system fail, this means that the whole system will fail due to this links (Gray et.al, 2010). The American economy is one that can be described as a system that is interlinked. Thus while Cochrane may argue that risks taken by individuals in the banks, is not responsible for the crisis, interdependence as well as interlinkages of the American economy seek to prove him right. Indeed, systemic risk usually occurs for example where a bank run takes place setting panic in the other banks which are owed money by the first bank. This leads to cascading failure by all the banks involved. The depositors of these banks, sensing the unrest will rush to liquidate their assets leading to a market full of sellers and no buyers (Haubrich & Lo, 2013). The American economy is one that thrives on the interlinkages that exist between the different stakeholders; more so in the banking sector. Therefore, risks that are taken without much consideration are very capable of leading the country into a financial crisis. All that needs to happen is that the banking system to experience a number of bank runs and this is enough to create a significant dent in the economy of that particular economy. This just goes to show how any amount of laxity in the banking sector could lead to a financial crisis of major proportions.

The Role of TARP

            Cochran believes that the move of the congress to by Troubled Asset Relief Program (TARP), played little or no role in salvaging the already crumbled economy (Kindleberger & Aliber, 2011). At one point, I agree with Cochran, however, there are so many points that prove this point wrong. For one, it established an American economic antifreeze. This is because it created a relief for major financial institutes from frozen credit markets. The program created liquidity at a time where there was a lot of financial panic in the market. There was also the fact that the program ended up ultimately costing less than had been intended. The program had originally intended to purchase $700 billion worth of mortgage-backed securities. Recent numbers from treasury indicate that they have $475 billion in total commitments and it is estimated that TARP’s lifetime cost is at $49 billion. The program also managed to withdraw money from the American banks. The government invested in the banks and got returns that amounted to a profit of $7 billion. There is also evidence that companies that were bailed out by TARP are now showing signs of recovery. One example is General Motors who in 2010 were able to show their biggest profit yet since 1999. Finally, TARP’s major impact on the economy has been indicated in the job sector. The treasury department has indicated the fact that through recovery initiatives such as TARP, 8.5 million jobs have been saved. This is a greater evil than if the same or even larger number of people would have been left jobless (Ericson et al, 2014). Thus, while the impact according to Cochran was insignificant, it was better than no impact at all.

Conclusion

           Cochran’s analysis was valid and even correct to a larger extend, however, the fact that he feels that risks in the banking systems cannot topple an economy and that The efforts made were in fact significant in saving that economy leaves a lot to be ‘desired’ as far as this economists reasoning is concerned.

 

 

 

 

 

 

 

 

 

 

References

Roberts, R. (2009). “Cochrane on the financial crisis.” Library of Economics and Liberty. http://www.econtalk.org/archives/2009/02/cochrane_on_the.html

Kindleberger, C. P., & Aliber, R. Z. (2011). Manias, Panics and Crashes: A History of Financial Crises. Basingstoke: Palgrave Macmillan.

Gray, D. F., Andreas A. J., and Samuel M. (2010), “Quantifying Systemic Risk and Reconceptualizing the Role of Finance for Economic Growth,” Journal of Investment Management, Vol. 8, No.2, pp. 90–110

Ericson, Matthew; He, Elaine; Schoenfeld, Amy. "Tracking the $700 Billion Bailout". The New York Times. Retrieved October 19, 2014. At         http://projects.nytimes.com/creditcrisis/recipients/table

Haubrich, J. G., & Lo, A. W. (2013). Quantifying systemic risk. Chicago, Ill: National Bureau of   Economic Research.

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 Global Oil Industry Conflict: An Apocalypse End

Since the discovery of its use, petroleum has been playing a very important role in almost all key industries in the world. Petroleum, also known as oil is a vital component for fuel as well as gasoline used to power a greater percentage of machines in the world. Moreover, oil is a key raw material for the manufacture of most chemical products including pharmaceuticals, plastics, fertilizers, and solvents. Petroleum or oil can be termed as the father of the industrial civilization as it plays the important role of maintaining a larger percentage of the global industrialization.

Oil forms the largest percentage of energy consumption in the world, ranging from as low as 30% to as high as 60%, depending on the country’s energy consumption. Forming the world’s largest industry in terms of dollar value, the industry which includes production, distribution, refining as well as retailing is the largest in the world (Venn, 2002).

Countries as well as companies and organizations are aware of this importance and put up measures that would gain them access to this all too important commodity. In most countries, governments have put up measures that ensure that oil as accessible to them. These include providing major tax breaks to oil companies on almost all oil explorations as well as extractions. These breaks extend to oil field leases as well the equipment used in oil drilling. Governments also provide heavy public subsidiaries to these companies. In exchange for the favors that the governments offer to the companies, they get to access cheaper oil for their countries.

However, while oil has managed to form a larger part of relief in industrialization, it has become the source of conflict in many parts of the world, more so in countries where the precious commodity is produced.

Impact of oil discovery and production

Referred to as the worlds ‘black gold’, oil has in the last century or so become a source of hardships and misery in societies where it has been found. Corrupt and authoritarian governments, as well as loop-sided economies, and violent conflict form the order of the day in countries where petroleum producing countries are concerned. Apart from the internal conflict that most of these countries face, there is the fact that huge multinational companies, through military interventions or clandestine operations are able to maneuver for the control of oil fields by using foreign powers (Stoff, 1982).

Due to the lucrative nature of the of the oil industry, even within these countries, rebel groups crop up and want to challenge the government hoping that they too would get part of the profits that come from then oil. These rebels are often dissatisfied citizens who have seen the greed that the government is experiencing as well as the greed and corruption that comes with the industry and feel that the government is not giving them their share. Case examples of conflicts that have been sparked by rebels over oil resources include Nigeria and Sudan to mention but a few. The degree of the rebel conflicts depends on the strength of the rebel group as well as the ability of the government to quash the rebellion. Some rebellions have even led to the formation of new countries such as was South Sudan’s case.    

Oil discovered in the between boundaries of two nations has also been cause for conflicts between the countries. These usually lead to boarder conflicts in the regions as well as international conflicts between the two nations because of the oil reservoirs (Karl, 1997). Recently, South Sudan and Sudan have been having a lot of boarder conflict that can be attributed to the existence of oil reservoirs that each state believes belong to them.

Other then the border conflicts, the damage that oil production causes to the environment has been a course of major demonstrations and strikes that result to lose of lives. Major environmental damages that have resulted either in the production of the oil pr in its transportation such as oil spills have been cause for major uproars all over the world.

Finally, there is the fact that oil has become a very expensive commodity. In recent years, the demand for oil has been at an all time high. With high demand comes the need to produce more oil thus more and more oil discoveries are being made all over the world. However, with greater demands comes the rise in the commodities prices. Rise in demand coupled up with rise in prices makes oil a very scarce resource (Heinberg, 2005). This has created conflict as people all over the world are now fighting to access this scarce commodity. What is even sadder is the fact that this is likely to be the trend in the next years to come this would mean that is no solution is sought in the nearby future; the likely hood of an escalation in the conflicts both local and international is likely as far as oil as a resource is concerned.

Reasons both international and local as to why oil is a source of conflict

In the last century or so oil has managed to become a source of conflict in one way or the other. This is more so because of the fact that in recent years oil reservoirs all over the world have dwindled because of too much usage. Studies have found that the connection between oil and conflict generally boils down to two expansive reasons. Its importance in a particular country’s economic as well as military power as well as its irregular geographic distribution in the globe.

 

 

Its economic significance

Oil is the primary energy source in the world. It accounts for almost 40% of the world’s energy consumption. It plays an important role in ground, air and water transportation. In the transport sector, oil provides up to 95% of the energy used in the industry all over the world. It is also used in other industries mentioned earlier on in the paper. Due to the critical role played by oil in the running of an economy, any shortage of this commodity has been known to create global economic recessions. There is also the fact that most countries that are able to export oil get good income from this export. Thus, in countries where the leaders may try to tamper with these exports, they are usually met with strong resistance.

Its significance to military power

Oil provides the energy used to power military equipments including the planes as well as the tanks, missiles, armored vehicles, and any other instrument that may be used in a war situation. Modern combat is very expensive to fuel due to the advancement in technology it is therefore very important that every country secure their military power by ensuring that that particular military has access to all supplies. Due to the important role that fuel plays in the functioning of a military, governments have ranked fuel possession as a matter of ‘national security’. In countries like the US, terming oil as a matter of national security means that they may resort to military force in order to protect it (Klare, 2004).

Its importance to oil geography

While oil is important at a global scale, its reservoirs are not simply located in any part of the worlds. In fact, natural petroleum is concentrated in large reservoirs in specific parts of the globe. Studies indicate that the largest reservoir which contributes to a third of the world’s petroleum is situated in the Persian Gulf area. The countries situated in this are provide about 90% of the world’s oil. However, in recent years, there is said to have occurred a gravitation oil shift, thus the oil reservoirs in countries that originally produced oil are depleting and oil is being discovered in countries that originally did not have any (Goodstein, 2005).

Types of oil conflicts

Oil conflicts often occur in either of two stages. The first is may occur before the oil itself is discovered. This is where discovery has been made and it has been found that there is a likely hood of oil discovery. The second one may occur where the oil is already being produced. The reasons for this conflict may be divided into three main reasons.

Territorial disputes

These disputes arise where boarders are involved and where offshore areas that are thought to be insignificant are concerned. Most of these places are usually considered insignificant until an oil discovery is made (Deffeyes, 2008). Some of the areas considered insignificant until the discovery of oil include the Caspian Sea whose discovery sparked a territorial conflict between Azerbaijan and Iran and the West African Bakassi Peninsula that caused friction between Nigeria and Cameroon.

Separatist struggles

In most countries, oil is produced in areas inhabited by ethnic groups. However, the proceeds of the production go to government officials as well national coffers. In this case, the members of the ethnic communities will feel that given the fact that the oil is on their land, and they are not getting anything from the government, then it would be best if they break away from the parent nation to form their own. This has been the case in Nigeria, Indonesia, and the southern part of Sudan. South Sudan is a recently independent state because of such a conflict (Alao, 2007).

Factional and dynastic struggles

Oil brings out the evil as well as the dictatorship in individuals. This is because whoever controls the oil and the revenues it brings in controls the nation and its people. Such people want to continue keeping this power and in fact do anything to be able to retain such power. This includes resorting to brute force as well as suppression of the people (Ross, 2012). Those not included in the power on the other hand will resort to any means in order to gain control of that power. These groups will resort to rebellion, terrorism, or coups to wrangle power from the powerful. This is the case in countries such as Nigeria and Saudi Arabia. In other countries such conflict arises in form of political indifferences as is the case in Venezuela.

Some of the world’s fuel conflicts as of the last quarter a century

While conflict has been brewing all over the world about oil, and who gets to control it, in recent years these conflicts have escalated (Ebel, 2002). In fact as of the past years more than two oil conflicts had erupted between nations over oil. Some of the more recent oil conflicts include:

The Sudan and South Sudan conflict

This conflict is still on going to date. Early 2012, troops from the newly formed South Sudan nation occupied an oil center in Heglig, a town that had been granted to Sudan in a treaty between the two nations. The Sudan government organized its troops which were to drive the Southern Sudan troops from the oil center. Since then, there has been conflict between the two nations.

The southern China Sea naval clash

This particular area is thought to contain large deposits of oil reservoirs. This has elicited a naval clash between the Chinese government and the Filipino government both of who are claiming rights over that particular stretch. The Filipino government claims to have discovered the oil and that it would start drilling. On the other hand china claims that the place is their territory.

Egypt oil conflict with Israel

As of the year 2012, Egypt had announced that it would cut off its oil supply to Israel. This announcement was followed by months of protests and attacks on the main pipeline that took oil to Israel.

Syrian oil conflict

Syria is a country with massive oil reservoirs and more recently rebels have come up and want a piece of the cake. This has resulted in conflict between the Syrian military and the rebel groups which has recently escalated to the use of chemical weapons. What is worse is the fact that nobody is aware of the extent to which this particular war this war is going to before it can end. Even worse is the uncertainty that has been brought about by the presence of the US army in this particular conflict.

Conclusion

Oil related conflict is a phenomena that has taken a toll in the last quarter a century or so. What is sad is the fact that at the rate at which these conflicts are taking place, with more than five conflicts reported in the last year alone. This indicates that the world is headed more and more conflicts in the future. Evidently, there are issues that are ‘fueling’ this rapid movement towards an apocalyptic oil conflict end. Other than greed for power as well as money, the shortage in the commodity is causing a panic in the world. Therefore those with oil want to hoard it and sell it at expensive rates while those without it are fighting to get it.

There is also the fact that geography is changing things. Oil is shifting to places that it was not originally available. Given the fact that the countries that originally had oil reservoirs had that much internal conflict, what would happen to countries that did not have the precious ‘black gold’ but now had access to it? Isn’t this an apocalypse in the making?        

 

 

 

 

 

 

 

 

References

Alao, A. (2007). Natural resources and conflict in Africa: The tragedy of endowment. Rochester, NY: Univ. of Rochester Press.

Deffeyes, K. S. (2008). Hubbert's peak: the impending world oil shortage (New Edition). Princeton University Press.

Goodstein, D. L. (2005). Out of gas: The end of the age of oil. New York., NY: W.W. Norton.

Heinberg, R. (2005). Party's over: Oil, war and the fate of industrial societies. Gabriola Island: New Society.

Karl, T. L. (1997). The paradox of plenty: Oil booms and petro-states. Berkeley: University of California Press.

Klare, M. T. (2004). Blood and oil: The dangers and consequences of America's growing petroleum dependency. New York: Holt.

Roberts, P. (2005). The end of oil: On the edge of a perilous new world. Boston, Mass. [u.a.: Houghton Mifflin.

Ross, M. L. (2012). The oil curse: How petroleum wealth shapes the development of nations. Princeton, N.J: Princeton University Press.

Stoff, M. B. (1982). Oil, war, and American security: The search for a national policy on foreign oil, 1941-1947. New Haven [u.a.: Yale Univ. Pr.

Venn, F. (2002). The oil crisis. London [u.a.: Longman.

Ebel, R. E. (2002). The Geopolitics of Energy into the 21st Century. CSIS, Washington DC.

               

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How the American economy mode of livelihood affects the culture

 

Introduction

In most parts of the world, the economy of any country is mostly the determining factor as to the cultural livelihood of the inhabitants of that nation. For there to be an established economy different entrepreneurs and managers, contribute natural resources, skill, and labour to manufacture and distribute goods and services. The U.S has one of if not the largest economy in the world. This is mainly because both the government and the private sector work hand in hand to ensure a smooth running economy suitable for all Americans. That said, it is important to look at the effects that economy has had and is still having on the American culture.

The impact

Labour

Labour plays the most important role in any economy. The better an economy is the more labour is needed. This means that more and more people employed with good salaries that can altogether support families. This however has been a major problem lately with more and more people lay off to cut on expenses. With the globalization of industrialization companies no longer have to fight for workers by increasing their wages for they can always look for cheap labour in other countries or even continents, companies have had to move to other countries leaving thousands of people jobless.

With people out of jobs, basic necessities such as shelter are not available to these people thus many families are left homeless and in the streets. This idealness also causes the crime rate to go high not only in the cities but also in small rural communities because people are looking for money. Drug and substance abuse is also on the rise because people are looking for temporary ways to forget their state of unemployment and money problems.

Cost of living

The economy in any given setting determines its cost of living. If the cost of living is sky, high then it is expected that the income of the people match it. However, if the cost of living goes up and the income remains the same then there will be many debts owed by individuals. This will force more people in a family setting to seek employment to try to meet the demands of their daily expenditure and in turn leaves a polarized family setting where everybody has to work for long hours and nobody is there for the children.

 

Divergence of classes

A good economy is whereby a large number of families are middle class income families. This means that a good number of the people are slightly above the minimum wage bracket. The situation is no longer as this and most of these middle class families have shifted and now live bellow the minimum wage bracket. In essence, this means that we now have a small class of very rich individuals and a very large percentage of poor families with little or no middle class to balance the equation.

 

 

Lack of better cover/protection

Most of the programs put in place by the government to protect and care for it citizens such as healthcare and retirement cover that provide for quality affordable healthcare for the sick and care for the old and retired is only available for workers who are employed full-time. Meaning that if a person is employed part-time they cannot be able to join this program, which then means that the government cannot help them should they fall sick and cannot afford treatment.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Bibliography

Gusterson, H., Besteman, C., & Ehrenreich, B. (2009). The Insecure American: How We Got Here and What We Should Do About It. Berkeley: University of California Press.

Wiefek, N. (2003). The impact of economic anxiety in postindustrial America. Westport, Conn.

Howard, G. J. (2001). Varieties of comparative criminology. Leiden

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 Bonds

Importance of bonds

            Various companies mainly issue the bonds to borrow money to the public. The bonds usually refer to a written and sighed promise certain amount of money on a specific date. This therefore implies that the bond can be seen as a way in which the public loan their money to the company where the company promises to pay after a certain date. However, most of the bonds also do pay a certain interest after certain period. The following are some of the major function of the bonds.

Preserving the principal amount

            The bonds are mainly used to preserve the principal amount of money. This is because the bonds are essentially loans that have secured repayment period. Various investors use the bonds therefore as way to ensure that their principle amount is secured.

Saving

            The bonds act as form of saving to the investors. This is because by the end of the agreed period the company returns the principal amount invested. In addition, this therefore implies that the bonds can provide an alternative ways in which the investor can save their money for future use.

Raising money

            Various companies mainly sell the bonds in order to finance their projects and business (Brigham, & Houston, 2009). This therefore implies that the bonds act as a way in which the companies get their capital from the public. In addition this also implies that the bonds help in ensuring that the company has enough capital and therefore they do not have to issue the shares in the stock market.

Diversification

            In relation to this the bonds help to diversify the market since they help to ensure that the investors have many options to invest their money. In addition, the bonds also help to act as an alternative source of income for the investors.

Importance of rating bond

Bonds rating refer to the act of giving the credit to the bonds. The bond rating therefore reflects the probability of a bond going to default (Brigham, & Ehrhardt, 2011).  The bond ratings are mainly based on the quantitative and qualitative factors, which include.

Financial ratios

            The major ratio used in the bond rating the return on asset debit ratio. The other types of ratio that can be used in the bond rate include the debt ratio (Brigham, & Ehrhardt, 2011).

Bond contract terms

            The bond contract terms are also used to assign the rates to various types of bonds. In relation to this the bond are normally assigned rating depending on the whether the bond is secured on the mortgage or using specific assets. The guarantee by other party provision may also be used during bond rating. In addition any sinking funds provision may also be used to assign rate to the bonds.

Qualitative factors

            The qualitative factors may also be used to carry out bond rating. In relation to this the sensitivity of the firm earning of the firm earning in the economy  may also be used to rate a particular bond used by the company. The probability of the firm to affected by the inflation may also be used to rate the bond since it indicate the stability of the firm. In addition the probability of a firm to have labor problems may also be used to rate the bonds issued by various companies. Other factors that may also be considered during bond rating include the potential environmental and antitrust problems (Brigham, & Ehrhardt, 2011).                                     

Why bonds change in value over time

            The bond prices usually moves inversely with the interest rates. This therefore implies that the prices of the bonds usually go up when the interest rates go down (Besley & Brigham, 2008). On the other hand when the interest rate of the bond goes up the prices of the bond usually goes down. One of the major reasons why the bonds fluctuate is the fact that the bonds usually offer a certain interest that is higher than the interest rates offered by the money borrowed elsewhere.

            Moreover, the bond prices also changes depending on the prevailing economic forces affecting the prices of the bonds (Megginson, Smart, & Lucey, 2008). In relation to this when the market rates increases the various bond usually demand a higher earnings from the bonds. This is to help the investors to cope up with high levels of inflation in such situations. On the other hand when the market rates decreases in times of deflation the bond rates usually goes down. This usually happens when there is a slowdown in the economic activities.  It has also been established that the prices of the bonds are less volatile when the bonds are near maturity. This therefore implies as the bond nears maturity the interest rates of the impact of the various interest of the bond become less. In addition, the final price of the bond depend on the credit quality and the type of the bond issued (Brigham, & Ehrhardt, 2011).  Most importantly the prices of the bonds also depend on the frequency of the payment of the bonds

 

 

  

 

References

Besley, S., & Brigham, E. F. (2008). Principles of finance. Mason, Ohio: South-Western.

Brigham, E. F., & Ehrhardt, M. C. (2011). Financial management: Theory and practice. Mason, OH: South-Western Cengage Learning.

Brigham, E. F., & Houston, J. F. (2009). Fundamentals of financial management. Mason, OH:South-Western Cengage Learning.

Megginson, W. L., Smart, S. B., & Lucey, B. M. (2008). Introduction to Corporate finance. London: Cengage Learning EMEA.

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  • Bonds
  • Importance of bonds
  •             Various companies mainly issue the bonds to borrow money to the public. The bonds usually refer to a written and sighed promise certain amount of money on a specific date. This therefore implies that the bond can be seen as a way in which the public loan their money to the company where the company promises to pay after a certain date. However, most of the bonds also do pay a certain interest after certain period. The following are some of the major function of the bonds.

  • Corporate governance
  • Introduction
  •             The standard chartered bank was founded back in 1969. The bank was formed as result of merger of two separate banks the Standard Bank of British of South Africa and the Chartered Bank of India. The bank operates in various countries serving million of customers. The bank serves as one of the best basis of studying the importance of corporate governance in an organization. This is because the management of the bank has committed some effort towards ensuring that they achieve their growth strategies. This report therefore highlights the importance of corporate governance in an organization. In addition, the report first analyses the criteria that is used in the reviewing the corporate governance in an organization. Moreover, the report also highlights the importance of the application of the principles of corporate governance. The report also provides a review of the bank corporate governance. Most importantly the report also highlights various recommendations that the management of Standard Chartered Bank needs to implement in order to improve on their corporate governance.
  • Importance of organization corporate governance

  • Globalization in Economics and Its Consequences
  •             Economic globalization is the advancement that takes place in the international trade. Economic globalization has come into effect due to the reduction of various barriers in the international trade. Things that hinder globalization include high taxes and large amount of export fees. The theme of globalization is that the world’s market can function in a beneficial way to all countries. The main goal of economic globalization is to increase wealth in the developing countries. Investments among foreign countries take place because of economic globalization. Economic globalization employs the ability of countries to exchange goods without difficulties. Economic globalization result to the carrying out of trade activities without employing marketing borders (Dreher, Gaston & Martens, 2008).

  • Performance Indicator
    1. Suppose that Performance Indicator’s technology were universally
      adopted in golf balls. How would that change value creation and
      capture (B,P, C, and Q) in the used ball market? (Hint: Start by
      thinking about a golfer who regularly buys used golf balls. What would
      his or her willingness-­
      to-­pay for a dozen used golf balls be
      before and after the adoption of the Performance Indicator technology?
      Would it change? Why or why not?)
  •             If the performance indicator’s technology were universally adopted in the golf balls, there would be a significant change in value creation and capture of the four balls, which are (B, P, C, and Q). This is because the golf balls are already used and therefore the swing weight will change from the old one to a new swing weight. All the balls sold while in their original form from the supermarket possess a common mass distribution. Considering the status of the four balls (B, P, C, Q),

  • Competition
  •             Industrial regulation refers to the directives imposed by the government in sectors such as banking, transport among many others (Laudati, 2001). Guidelines are imposed to monitor prices and quality of product to protect consumers and ensure do not get exploited. It is done to check creation of monopolies. Monopolies are firms that singly own a given market time in the provision of goods and services. However, much as these bottlenecks seem beneficial to the economy but they also have limitations. For instance, they affect price allocation as well as market entry and exit. They tend to scare potential investors leaving few participants in the market. The regulations are imposed in the form of quotas and tax credits (McConnell, 2006).

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