http://www.wawa-news.com/index.php?option=com_content&task=view&id=2960&Itemid=113
Canada Post Release New Stamps
Summary
Canada Post wants to mark milestones and celebrations on stamps to hold a Canadian memory. Some exciting events include the 2010 Winter Olympics and Paralympic Winter Games. Robert Waite, Chairman of the Stamp Advisory Committee and Senior vice president of Corporate
Social Responsibility at Canada Post says, “There was a very diverse and impressive number of topics to choose from, which made final selection challenging. But in the end I believe we have created an outstanding stamp program, one which Canadians will embrace with pride."
Connection
In Chapter 10, the definition of monopoly is that it occurs when only one seller of a good or service exists in a given industry. In this case, Canada Post, a postal system is categorized as a government monopoly. This means that that the post office is operated by the government itself. Since it is the only company in the industry, it has easy control over the price of the product. Therefore, it does not engage in a great deal of advertising since it less competitive.
Reflection
Although, Canada Post is the only one firm involved in the Canadian monopoly, that firm still may have competition. It competes with all other industries for the consumer dollar because it is not the only form of communication available to the consumer. I believe that since it sets an advantage of a single price for all consumers, the quantity of goods are lower at a high cost under perfect competition. Therefore, it will yield the largest possible profits. However, Canada post may not remain monopoly forever unless the barriers to the entry of new firms are substantial
Thursday, June 11, 2009
Tuesday, May 5, 2009
Chapter 8 - Stabilization Policy
http://www.ibtimes.com/articles/20090520/spending-without-jobs-strange-case-todayrecession_1.htm
Automatic Stabilizers Help Increase Consumer Spending in Recession
There has been a decline in employment in manufacturing, construction, retail and financial services. In the first quarter, there was an increase of 2.2% in consumer spending while 700 000 jobs were lost over the three months of the quarter. John Silvia, the Chief Economist wonders if the economy was affected by the low employment and the consumer spending or were households over-saving? Recently, employment insurance and reduced income tax payments contributed to enormous income gains for households to ease the recession. As well, transfer payments such as welfare, social security and disability also have increased more than what was expected.
Connection
In Chapter 8, the definition for automatic stabilizers are government programs react automatically to help adjust the level of aggregate demand during changing economic conditions. The article introduced the two most recognized automatic stabilizers which were the employment insurance and the progressive income tax. While employment was declining, an increase of employment insurance contributed to enormous income gains for households to ease the recession. The textbook explains that since individuals are unemployed, their spending decreases, the multiplier effect initiates and overall spending in the economy declines. By receiving some money in the form of employment insurance benefits, it encourages consumers to spend more. Lastly, a reduction in the progressive income tax means that a lower percentage of income in taxes is paid. It provides the individual with a greater proportion of income to spend.
It is amazing how automatic stabilizers can still stabilize the economy that is in a recession. It is good sign that these automatic stabilizers are successful contributions that helps increase 2.2% in consumer spending when there are so many job losses. With the rise in overall spending, the unemployment should be seen more of a concern. I believe that the increased spending will slowly take an effect on creating a demand for more workers, which can reduce the level of employment. Hopefully, consumers will gain the confidence in boosting the employment growth. It sounds likely that the worst of the economy may soon be over.
Chapter 7 - Money and the Canadian Banking System
http://www.azcentral.com/news/articles/2009/03/03/20090303mr-trade0304.html
The Good Value of Barter in the Bad Economic Times
David Robinson, is one of the 500 members in the Arizona Trade Exchange
Arizona Trade Exchange is an example of a barter system. In order for barter to take place, one needs to have some item to offer for exchange. This form is a direct bartering system that requires a coincidence of wants from another person. It is the medium in which goods or services are directly exchanged for other goods or services, without the use of money. That is, if you have an item to trade you have to find someone willing to sell the item that you desire.It is difficult to express values or prices in a barter system. With no common denominator, there can be as many prices for one item as there are articles for trade. As well, divisibility is also a problem with barter because it is not possible to divide many items up into smaller units.
Reflection
In our economy, money performs the function of being a store of wealth, as well as a medium of exchange. However, the barter system is not dead. It’s good that some people are seeing the value of barter in the bad economic times. Exchange systems can generate more customers together in producing new sales and growing higher mass of businesses. It acts as a great way to offset expenses by paying in trade instead of cash. Therefore, you are able to preserve cash. Some individuals resort to barter so that they can avoid paying income and sales taxes.
Chapter 6 - Determination of National Income
http://www.nytimes.com/2009/02/03/business/economy/03econ.html
Americans are Saving More than spending
Summary
One government report showed that the American spending decreased for the sixth month in December, while the other report said that construction spending dropped 1.4% in December from November as house values fell. In the last three months of 2008, the personal savings rate of 2.9% grew surprisingly to it’s highest peak in since 6 years when it’s country was getting better from the recession and the 9/11 attack.. “If households are shying away from spending, what’s going to cause businesses to start spending again?” asked Aaron Smith, senior economist at Moody's Economy.com. Over all, the spending dropped 1% or $102.4 billion in December.
Connection
The connection to the chapter is about how spending can change when households increase the amount of money they save. In this case, American households were saving money by not spending it on goods and services. If household savings increase, then the amount of money sent to the business sector in the circular flow would be reduced. Therefore, businesses react by cutting back on production and laying off workers. The loss of employment reduces the flow of money back to the households. With less money available, households will cut back on their spending.
Reflection
The purpose why American consumers are saving more than spending can have many factors. It may be because companies cut their jobs and they declined their investments in machinery. This loses their interest in spending which affects the economy. Although savings had a negative impact in this article, there is a positive side towards it as well. It can benefit investments by being lent to businesses. With more savings, it can help to lower interest rates and create more employment opportunities.
Americans are Saving More than spending
Summary
One government report showed that the American spending decreased for the sixth month in December, while the other report said that construction spending dropped 1.4% in December from November as house values fell. In the last three months of 2008, the personal savings rate of 2.9% grew surprisingly to it’s highest peak in since 6 years when it’s country was getting better from the recession and the 9/11 attack.. “If households are shying away from spending, what’s going to cause businesses to start spending again?” asked Aaron Smith, senior economist at Moody's Economy.com. Over all, the spending dropped 1% or $102.4 billion in December.
Connection
The connection to the chapter is about how spending can change when households increase the amount of money they save. In this case, American households were saving money by not spending it on goods and services. If household savings increase, then the amount of money sent to the business sector in the circular flow would be reduced. Therefore, businesses react by cutting back on production and laying off workers. The loss of employment reduces the flow of money back to the households. With less money available, households will cut back on their spending.
Reflection
The purpose why American consumers are saving more than spending can have many factors. It may be because companies cut their jobs and they declined their investments in machinery. This loses their interest in spending which affects the economy. Although savings had a negative impact in this article, there is a positive side towards it as well. It can benefit investments by being lent to businesses. With more savings, it can help to lower interest rates and create more employment opportunities.
Friday, February 20, 2009
Chapter 5 -- Economic Indicators
http://www.vancouversun.com/Business/loses+jobs/1263615/story.html
Lost Jobs In BC
Summary
In January’s worst record, 68,000 BC full-time workers lost their jobs. From Statistics Canada said that most of these workers were from manufacturing and construction sector and was counterbalanced as an equivalent by a gain of 33,000 part-time positions. BC’s unemployment rate has risen from 3.8% in March 2008 –all-time low record to 6.1% as of now. The highest unemployment rate known in BC records was 14.1% in 1987. The Canadian economy was affected by a lost of 129,000 jobs in January which consisted most of full-time workers.
In
I believe that the unemployment rate will continue to rise since the recession has begun at the start of 2009. There are many factors that influence this change, which can include changes in the composition of labour force, changes in the employment-insurance program, changes in oil prices, changes in technology and the changes in the pattern of world trade. I think that the employment insurance program is regarded as an income supplement and not as temporary income assistance between jobs. The solution to the unemployment probably depends on the number of vacancies available. If there are no jobs available, then jobs will need to be created. If jobs are available, then a way will have to be found to match the unemployed workers to the available opportunities.
Chapter 4 -- Government in Canada
http://www.vancouversun.com/Sports/Olympic+security+costs+soar+high/1314715/story.html
http://www.vancouversun.com/Sports/Olympic+security+costs+soar+high/1314715/story.html
An Increase in Olympic Security Cost
Summary
An estimation cost of $900 million to provide Olympic security will be spent for 2010 Winter Games in
Connection
Taxes are imposed in order to provide revenue for government and also to influence economic conditions. The effect of the taxation level has implications for the economy. Canadian taxpayers are placed the burden of paying more money through taxes to makeup the cost of the Olympics. Therefore as a response, inflation –defined as an increase in overall level of prices, will occur as a result to help increase the revenue collected by the government. When price increase, consumers pay in taxes also increase and along with that, an individual’s income will increase as well. In
Reflection
With the enormous expenses due to the Olympics, the economy will the likely face recession. Under public pressure, I think that indexing would be a good time to come in because it can reduce the high tax amount in the rate of inflation. In order to adjust for price increases, personal exemptions will increase annually in line with inflation. Although, it would benefit the individuals in indexing of personal income, the government will result a loss of revenue. If indexing were removed from the tax system, government tax revenues would increase right along with rising prices. Hopefully, indexing can control the government against the possibility of profiting from high inflation.
Sunday, November 30, 2008
Chapter 3 -- The Role of Goverment in a Market Economy
Excise Tax in Drinks
Summary
The federal government in
In Chapter 3, the definition of excise taxes are extra costs the government imposes on the sale of particular commodities. The suppliers of alcohol tend to pay for the excise tax to the government in which allows the government to gain some revenue. The supplier raises the price of alcoholic beverages so that the consumers suffer more by paying more taxes. This leads the suppliers to find a smart loophole in their drinks where they can decrease excise tax amounts. The loophole was created by the suppliers because they hoped of gaining more profit for themselves. Consumers will be satisfied with this cheaper product because it almost tastes the same as alcopops. Therefore, the loophole gives advantages to both the consumer and supplier.
It is reasonable why a product with an elastic demand, in this case alcohol, has the objective of raising revenue for the government. With excise taxes imposed on alcohol, consumers will still continue buying them. I am not surprised that manufactures have found this loophole to benefit their product through profits for themselves. I don’t think closing the loophole will solve the problem because eventually other loopholes will be discovered. Therefore, I believe that it is best that the government should tighten the definition of beer in the tax act instead.
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