...economic life in the UK at present time is a financial and economic crisis and its consequences, which took a severe stroke to banking system. Problems in the financial sector were followed by difficulties in other sectors of the economy, and as a result, production was reduced, unemployment was increased, consumer demand sharply was reduced, the real estate market was deteriorated, the British currency felt to its lowest level in 25 years. In the second half of 2008 UK economy entered a recession, and in the first half of 2009 UK GDP declined by 4.4% compared to the same period in 2008. However after the very strong downturn, UK's economy began to show signs of recovery since the second half of 2009. Macroeconomic statistics for 4th quarter of 2009 gave cause for optimism: the first time since the beginning of crisis weak growth of 0,3% had been recorded (Table 1.) Table 1. GPD Growth (www.statistics.gov.uk) |[pic] | Household Consumption first time after the crisis has become positive in Q3 of 2009 growing by 0.1% (Table 2.) Table 2. GDP by spending (Economic & Labor Market Review, Jan’10) [pic] The rate of inflation in UK has been slowed down in 2009 due to the decrease of demand caused by economic weakness. However there was sharp increase since the end of 2009 and in the first quarter of 2010 inflation has made 3,5%. The biggest impact...
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...consumption of electricity doubled in the 1930’s and by 1938 there were 9 million wireless sets in private homes and the demand for luxuries such as radios and cars also grew. This benefited the other industries and the working class as more jobs were readily available for them to earn a living and provide for their families. It is clear to see that the housing boom could be seen as being responsible for Britain’s economic recovery in the 1930’s as it gave jobs to the working class which increased consumerism as more and more people had money to buy consumer goods which helped the cycle of prosperity to continue on and helped the economy recover. Another contributing factor to the economic recovery of Britain was consumer spending. A.J.P Taylor stated that “increased consumption by individuals pulled England out of the slump”, meaning that Britain came out of the Depression by spending money and stimulating their own economy – creating a ‘consumer-led’ recovery. The lowered prices – caused by the Depression itself – allowed those...
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... Assignment - Saving and Interest Question: Many commentators, including high officials of the bank of Canada, have blamed the spending habits of the Canadian public for high interest rates. Are these commentators right? “It’s not your salary that makes you rich, it’s your spending habits.” - Charles A. Jaffe. Throughout the past 25 years, Canadians household savings rate have dropped severely resulting in the economy’s interest rates to rise in order to maintain stability. Many economists believe the increase in interest rates is due to the rise in consumer spending habits. In our current economy there is an evident relation between the diminishing house hold savings and the increase in interest rates in the Canadian public. When it comes to consumer spending and saving there is a clear trade-off, choosing to save now and consume more later, results in giving up current consumption. Many Canadians lose a good amount of their income due to enforced tax laws, causing them to spend instead of save. I agree with the the statement that the spending habits of Canadian Public is to be blamed because of high interest rates. The relationship between Canadians spending habits and high interest rates can be expressed through the supply and demand of loanable funds and the highly recognized Gross Domestic Product Equation. Since Canadian spending habits and high interest rates are closely related to the Gross Domestic Product(GDP) equation, it can be expressed as Y= C + I + G...
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...department stores, anxiously waiting to get their hands on the latest of gadgets and gizmos to purchase for families, friends, and loved ones for the holiday season. Many of the retailers in America have offered attractive promotional sales on this day to attract high traffic and volume in their stores. Realizing this, consumers in America who take a part in Black Friday see this as a fight to the death. This “fight to the death” literally came true in the year 2013, as one death and fifteen injuries resulted from the madness of the shopping event, according to BlackFridayDeathCount.com. On the flip side for businesses, Americans spent an average of $407.02 from the Thursday through Sunday that bookends Black Friday, as stated by the National Retail Federation. This topsy-turvy day recognized by a vast majority of American culture has been seen by many as the yearly peak of the country’s ever-increasing trend towards consumerism. Consumerism, the belief that goods give meaning to individuals and their roles in society, has presented itself to Americans in both a positive and negative spirit. On the one hand, consumer spending drives the economy, gives consumers a vast myriad of retailers to choose from, and renders shopping as a social experience. On the other hand, consumerism can render all aspects of life as merely a commodity, encourages excess consumption, and distorts our personal values. In this paper, I will explore these details in greater depth. After that point...
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...oil-used in cooking oil and fuels-have slipped. He refers this slip to the weak demand from China. However, China’s objective is to reshape its economy to be less reliant on construction and heavy industry, and more reliant on consumer spending. Mr. Sitorus, had to cut the number of workers on his 25-hectare farm from 12 to 6 and put off fertilizing his fields and fixing his trucks. Another example of negative effects of China’s slowdown took place in Australia. Anthony Walsh, managing director for Ausco Modular, an Australian company that builds temporary camps for mine workers in Karratha, a mining town on Australia’s northwest coast. He has stated that a fifth of rooms once occupied by miners flown in from Australia’s east are empty, rents went down by 20%. Due to the fall, unemployment rate in Australia, a mining powerhouse is 5.7%, it’s highest in 4 years. While China’s slowdown hurts places like Australia, it also means low energy and raw materials for the rest of the world. A more serious decline in China’s growth rate would reverberate around the world. On risk is that Chinese firms, which are reluctant to lay off workers, would be forces to cut staff, hurting spending at home and undercutting the goal of shifting toward a consumer-driven economy. 2. Which business opportunities does China still offer in spite...
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...China and India Population Trends BUS 330: Principles of Marketing Dr. Felix Lao Michael Samaritano August 20, 2014 China and India are two of the world’s largest and fastest growing countries in todays Major emerging markets. (White, 2012) The tremendous population growth happening in China and India is millennial consumers driving trends toward western-style consumption in both nations, which are due to the youth markets in the United States over the last 60 years. Marketers in these newly youth-oriented consumer economies (White, 2012) are predicted to be growth-oriented and very savvy. It would be a good strategy to duplicate the same direction in order to remain competitive. It would be an effective strategy to research market requirements in order to understand the trend and to effectively position our placement in the market. The aim is to identify products and services that would prove to be of important interest for the target audience. The Products that will interest this age group are various kinds of products, ranging from hygiene, such as acne remedies, video games, favorite beverages like “Rock star,” and of course, electronics like IPhones, IPads, and Google glasses. This is why it is very important to stay with the trends to continue to keep up with their demands; Youth markets will continue to look for the next big thing. The micro and macro environment is the driving force, and is what influences the marketing strategies for the youth targeted...
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...world they are living in. When one’s possessions become faulty, should one buy the same item to replace it or perhaps mend or consider exchanging it? Buying new things means purchasing the same good, at a brand new condition. Mending is repairing a damaged item to working condition. Exchanging suggests the replacement of one good with another; and possessions imply material goods with monetary value attached to it. One of the advantages of buying new things when the old one is defective or worn off is that it helps drive the economy, as mentioned by Huxley. Consumer spending a direct factor that help lift an economy. Consumer spending has evidently helped many countries overcome its financial woes during the tough economic times. For example, the Japanese economy had grown a robust one percent in the first quarter of 2012, largely fuelled by a one percent increase consumer spending. In the States, where consumer spending accounts for about 70% of the economic activity, the economy grew at a stunning 2.5% during the third quarter of 2011 due to increased retail sales. However, buying a new product when it becomes defective is socially irresponsible. Replacing the good would result in the disposal of the damaged good which creates more wastage to the environment. In Singapore, cars are usually scrapped after ten years even though they could still be roadworthy. This results in increased wastage and demand for landfills. The Pulau Semakau landfill costs a hefty sum of $610 million...
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...energy prices, stagnant real incomes and persistent job losses since the start of the year. As a result, there is a high probability that the financial crisis will help tip the economy into a formal recession. The unemployment rate is virtually certain to be high than it otherwise would be because of the financial crisis. One key impact of the crisis will be on consumer spending. The natural correction to the 2004-06 phase when consumers were over consuming through equity extraction from their homes is a phase of under consumption. A second key impact will be on consumer confidence. Worries about the value of ones life savings and even the security of one’s money market account will likely have knock on effects on consumption. Third, the loss of financial wealth will have a negative impact on consumption. Economists typically find that for each dollar of lost financial wealth, consumption drops by 3-4 percent. This means, for example, that a sustained $100 billion loss in capitalization of the stock market would be expected to cut spending by at least $3 billion in the first year after the decline. With consumer spending representing 70% of US GDP, the net impact could be severe. The crisis is likely to have negative effects on business activity as well. Many small businesses are heavily dependent upon bank lending for commercial and industrial loans – to add to capacity, add workers, or upgrade equipment. Such lending is already being reduced as banks tighten credit standards...
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...increase in standard of living, this is clearly a good thing. tho scan be seen in China, over the last 20 years china has seen some massive economic growth which has brought thousands out of poverty. If standards of living are increased then disposable income also increases which leads to an increase in consumer spending. If more people are spending money then the economy grows. Secondly economic growth can lead to an income rise And income rise can also lead to an increase in disposable income. Therefore bot these points lead to an increase in consumer spending and also an increasing aggregate demand, leaving real national output to increase. The benefits of economic growth for all economies and especially LEDCs are increased employment, reduced poverty and a high standard of living. These events occur because as AD increases, more factors of production, most notably labour are needed to produce goods and services for the economy. When this occurs on a large scale unemployed workers shift into employed. This is beneficial as governments provide less social security for the population so they can spend more money on public services. As a result of increased government spending, the quality of services such as education, health and shelter will become better hence improving the standard of living. Previously unemployed workers will also now be able to afford high quality essentials. Another way it can be seen as desirable is through the happiness that higher living standards brings...
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...during the war period. By 1945 $140 billion was held in private savings. These savings were used after the war to boost consumer spending. After the war the US economy grew as there was little damage to mainland USA and thus no money was spent on reconstructing factories, houses and public infrastructure as had to be done across the UK and mainland Europe. Due to the damage caused to Europe there was a large increase in US exports to Europe as European countries were unable to manufacture goods whilst they rebuilt their factories and infrastructure. The Marshall Plan was a programme for European recovery which gave European countries money to their economies. It is widely thought that the US did this partly for their own benefit. They knew that with this money European countries would buy goods from US factories as they needed to rebuild their factories, this would mean that jobs would be created as there was higher demand for goods. Investment in advancing technology would occur and more tax could be collected from those employed. This all contributed to the increase in the economy. Finally, after World War II the US increased their spending on defence out of fear of communism spreading from Russia. There were large amounts of money spent by the US government on research and development on new weapons and technological advancement. Around 60% of federal spending between 1945 and 1970 was on the...
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...Week Three Assignment Louis C. Diaz BUS330 Principles of Marketing Instructor: Benjamin Pitts November 10th, 2014 Consumer economy refers to the concept that evaluates an assortment of adjusts in recent consumption stages as well as the alteration taken place in capital, demography and society over a period of time (White, S., 2012). It gives a complete breakdown of variables and social actions that are current in consumer economy. This paper will examine future marketing tactics for new youth oriented consumer economies like those in India and China based on the marketing tactics taken on by United States to cater to youth consumers for the past sixty years. American economy is the world’s largest economy. This country has elevated level economy output and the largest purchasing power equivalence. Suitable tactics assumed by the government did not let the market down even in the 1930’s in the time of recession. The government cut taxes drastically so that the consumer would spend more. Various strategies were implemented in order to even out the economy during the 1930’s to the 1980’s (Mintz & Kellogg, 1989). Years 1945 to 1957 saw a soaring rate of fertility and the birth of countless baby boomers. As a result of this momentous climb in fertility rates, prosperity was decreased; the need for single family homes increased and brought hope for a better future. From 1946 to 1973 the expansion of the American...
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...nearly 39,000 points in December 1989 to about 14,300 points in August 1992, thereby losing about 60% of its value. As a result, investors lost the equivalent of (U.S.) $2 trillion and property values plummeted by about $10 trillion. Property values in certain parts of the country declined by 70% and plunged Japan into a deep recession for 10-years.” (Alston, 2013) To summarize the stock market collapsed, property prices dropped, banks curtailed the easy lending practices the created the economic boom, consumer spending halted- recession created, deflation, and the Japanese government was unsuccessful 2. What lessons does the history of Japan over the past 20 years hold for other nations? What can countries do to avoid the kind of deflationary spiral that has gripped Japan? Other nations can learn from what happened with Japan. Strict lending practices should have been in place to begin with, this would help decrease the amount of bad debt. The Government need to watch its spending. Japan is stuck because its debt is so high, it is extremely difficult to become strong again. 3. What do you think would be required to get the Japanese economy moving again? In order to get the Japanese economy moving again, the Japanese government should do three things. First, fiscal stimulus that would raise the growth rate of the country above where it is at and where it is expected to be. Less...
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...HBR: THE FEMALE ECONOMY (Michael J. Silverstein and Kate Sayre) Background & Motivation - * Women represent the largest market opportunity in the world * Globally, they control $20 trillion annual consumer spending * As a market is greater than China and India GDP combined These few points made us to think about this topic and it seems to be very intersting as well in accordance with modern day marketing. Plan of our Research- We are focusing on the below points to research on this topic. * Introduction * Survey & Results * Target Industries * Best Practices for companies * Related Reference * Case Study * Proposal * Suggestions Related Reference Study- 1.Revisiting Dynamic Capability (An award winning essay by Adwaita Govind Meno) 2.The Female Economy: The Millinery and Dressmaking Trades, 1860-1930-By Wendy Gamber 3.Empowering Women is a smart Economics- IMF Review Article- http://www.imf.org/external/pubs/ft/fandd/2012/03/revenga.htm 4.The Rise of Female Economy in B2B- https://www.atkearney.com/marketing-sales/ideas-insights/the-rise-of-the-female-economy-in-b2b Case Study- HYUNDAI SONATA--- How the design of Hyundai Sonata revolved in last 20 years. Proposal- A travel Agency which is focused on the rise of female Economy. Anticipated Conclusion: * Men & women make purchase decisions differently * Women are different from each other * Women are the gatekeepers for the household * Brands...
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...Street. As we're finding out from the postings, we all hail from different areas in the United States and internationally. Do you think we're all experiencing the same economic challenges or do you think different local economies are experiencing different challenges? Provide some examples to support your answer. In my opinion I think we’re all experiencing the same economic challenges to include different local economies. From a military point of view we too are experience an economic challenge. With the drawdown of forces in Iraq and eventually Afghanistan (to be determined) the military will have to cut down the forces to help reduce Defense spending. And if anyone can remember the Desert Storm/Shield conflict the military was nearly cut in half after it. As for the rest of America it seems as though the days of spending unreservedly are over with. With the recession affecting everyone people are now out of jobs and small businesses are out of work and trying desperately to keep themselves a float. This can especially be seen in the housing market where you have big name cities at an all time high foreclosure rate. In the end I believed the economy became what it is today due to our frugal lifestyle. I admit I was the same way but in the end it caught us all by surprise and now we have to figure out how to fix it and hopefully regain some or all the jobs lost by everyone...
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...analyze the impacts of consumption, interest rate and unemployment rate on Gross Domestic Product of China based on the data extracted from National Bureau of Statistics of China.(1992-2011 National Data in 1992-2011 ). 1. Economic model and econometric model 2.1. Assumption * Gross Domestic Product (GDP) depends on the following variables: * Private Consumption * Government spending * Total wage of employees * General model: GDP = f (Private Consumption, Government spending, Total wage of employees) * Dependency between variables based on economic theory: * Increase of private consumption will cause increase in GDP. * Increase of Government spending will cause increase in GDP. * Increase of Total wage will cause increase in GDP. 2.2. Economic and econometrics model * Declaration of variables Variable | Symbol | Unit | Gross Domestic Product | y1 | 100 million yuan | Unit vector | x1 | | Private Consumption | x2 | 100 million yuan | Government spending | x3 | 100 million yuan | Total wage of employees | x4 | 100 million yuan | Stochastic variable | u1t | | * Economic model: y1 = γ1+ γ2 x2 + γ3 x3 + γ4 x4 . Insert stochastic variable- u1t into economic model to form econometric model. * Econometric model: y1t = γ11+ γ12 x2t + γ13 x3t + γ14 x4t + u1t. 1. Data set (data table + source; correlation matrix + multicollinearity elimination) ...
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