Explain the various type of aid, which a developing country might receive.

04Apr11

There are three types of aid that a developing country can receive, which are Humanitarian, Bilateral, and Multilateral.

Humanitarian is an aid which can be by individual country to country, or via a major organisation such as one of the UN agencies. I t is not a loan and is normally sent to help specific problem, for example drought.

Bilateral is an aid given by one country to another . It is a loan, though it may be subject to a long period prior to repayment commencing, and granted as soft or below market terms.

Multilateral is an aid which separate countries pay money into one central organization, and it determines who receives money for what. So it is given through one of the large international agencies.

Filed under: Uncategorized   |  Leave a Comment

Mock Exam Reflection

04Apr11

For the mock exam, I think I miss understood in one of the evaluation question in paper 2 and made a wrong choice for the diagram that should be used to answer a 4 mark question in paper 1. For the four mark question, I had two diagrams that I thought I can choose, and one of them should have been correct, but I chose the wrong one. The miss understanding for the evaluation may come from lack of studying. Through out the exam paper, i had several small marks marked out. However, it was not too bad, so I think I can do better on the real one if I study.

Filed under: Uncategorized   |  Leave a Comment

Test Reflection Section 4

10Feb11

On the section 4 test, I lack explanations to the reasons and effect that I have put out in evaluations. I also think that there is a need to put some real world examples to support definitions. However, I think I was able to touch on important factors I had to mention about.

Filed under: Section4   |  Leave a Comment

Tanzania

02Feb11

GDP per capita: $1,500

It has an average 7% GDP growth from 2000 from gold production and tourism.

Composition by sector: agriculture 41.6%, industry 18.1%, services 38.4%

Commodities exported: gold, coffee, cashew nuts, manufactures, cotton

Population: 41,892,895

Population growth rate: 2.032%

CIA Fact book

Filed under: Section5   |  Leave a Comment
Tags: Section5

Review of Paper 1 Questions: Reasons for Trade

20Jan11

a) Explain the reasons why countries trade with each other.

Countries trade because each country would like to specialize in specific area, and they each nations have different factor endowments, the factors of production that a country has available to produce goods and services. Country specialize to keep their production efficient and lower opportunity cost. Countries have different factor endowments, for example Japan has capital as their main where China has has resources as their main. So a country might specialize where they have a comparative advantage in production. Another reason why  country specialize is because they have different factor endowments.

b) Given the benefits of trade, evaluate the economic arguments in favour of protectionism.

The benefits of trade can be greater variety of goods and services, increased competition and efficiency, economic growth and development, needed resources acquired, flow of new ideas, and reduction of international hostilities. However, with the existence of protectionism, increase in competition and efficiency may not be accomplished. With having a trade barrier, inefficient domestic countries would be protected from international competition. Domestic countries would not be able to compete and increase its efficiency.

Filed under: Uncategorized   |  Leave a Comment

Exam Review Blog Post: Exchange Rate

19Jan11

a) Explain three factors which may cause changes to occur in a country’s exchange rate under a floating exchange rate system.

b) Evaluate the likely impact on a country’s economic performance of a substantial depreciation of its exchange rate.

1 hour

Definitions

Exchange rate- The value of one currency expressed in terms of another currency.

Floating exchange rate- It is an exchange rate system where the value of a currency is allowed to be determined by demand and supply of the currency on the foreign exchange market.

Depreciation- A fall in the value of one currency in terms of another currency in a floating exchange rate system.

Triple A

Bullet point

• Change in Demand and Supply affects exchange rate
• Demand=Export level
• Demand increases by inflow of funds in to the country, and speculation
• Supply=Imports (Demand of foreign currency, goods and services)
• Supply increases by outflow of funds from the country, and speculation

Diagram

Evaluation Suggestions

Causes and consequences, and Stakeholders

 

Filed under: Uncategorized   |  Leave a Comment

Increase in Supply of Yen

12Jan11

This diagram shows a increase in supply of Yen in the international market. The supply curve shifts from S1 to S2 as quantity of Yen increase from Q1 to Q2. As the supply curve shifts right, depreciation, a decrease in value of currency, happens to Yen. Increase in supply happens when japanese speculators predict an appreciation in US dollars, japanese invest more in US companies, japanese make more deposit in US banks, travel more to US, and buy more US products.

Filed under: Portfolio, Section4   |  Leave a Comment

Increase in Demand of Yen

12Jan11

Above diagram shows an increase in demand of Yen. The demand curve shifts right from D1 to D2, and increase quantity of Yen in international market (Q1 to Q2). Increase in demand of Yen would lead to appreciation, an increase in value of currency, of Yen (P1 to P2). Demand of yen increase when holders of US dollars speculate that yen will appreciate, buy more japanese products, travel to Japan, make deposit in japanese banks, and invest in japanese companies.

Filed under: Portfolio, Section4   |  Leave a Comment

Exchange Rate

12Jan11

This diagram shows a currency that is in a floating exchange rate. The Yen in terms of dollars is at P1, and the quantity of Yen is at Q1.

Filed under: Portfolio, Section4   |  Leave a Comment

Quota Diagram

12Jan11

Above is a diagram of quota, a trade barrier that sets upper limits on quantity or value of goods imported. The price of foreign goods supplied in the domestic market (Sw) is Pw with out any trade barrier. The quantity of domestic goods provided in the domestic market is Q2, and the quantity of imported goods is Q2-Q1. By setting a quota on imported goods, the quantity of imported goods decreases from Q2-Q1 to Q4-Q3. The imported supply curve shifts from Sw to Sw1, increasing the price form Pw to Pw1. From the increase in the price of imported goods, the quantity of domestic goods increases from Q2 to Q4. Some inefficient domestic suppliers are now able to compete with imported goods.

Filed under: Portfolio, Section4   |  Leave a Comment