...Name: Karina Permata Sari (29115447) Program: GM 2 Business Economics’ Summary Consumption Theory Comparative Statics Analysis We could use comparative statics analysis method to analyze the market with model of market demand, supply, and equilibrium price and quantity. The term statics alludes to the theoretically stable point of equilibrium, and, comparative refers to the comparison of the various points of equilibrium. This method of analysis proceeds as follows: 1. State the assumptions needed to construct the model. 2. Begin by assuming the model is in equilibrium. 3. Introduce a change in the model. In so doing, a condition of disequilibrium is created. 4. Find the new point at which equilibrium is restored. 5. Compare the new equilibrium point with the original one. * Short-Run Market Changes: The “Rationing Function” of Price The short-run itself is a period time in which sellers already in the market respond to a change in equilibrium price by adjusting the amount of certain, resources which economists call variable inputs. Examples of such inputs are labor hours and raw materials. A short-run adjustment by sellers can be envisioned as a movement along a particular supply curve. It also a period of time in which buyers already in the market respond to changes in equilibrium price by adjusting the quantity demanded for a particular good or service. A short-run adjustment by buyers can be envisioned as a movement along a...
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...Sciences Prague Faculty of Economics and Management Department of Economics Project of Econometric Modelling © 2013 CULS in Prague I. One equation model: The following econometric model would like to 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-...
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...Team members must hold at least three meetings to discuss the joint project, and you are required to record collective activities and individual activities as detailed as possible in your logbook. For individual activities, they must be endorsed by the other member. No free-riding for the group project is allowed. I reserve the right to read your logbook to identify each member’s contribution to the group work. After reading this article “How does the stock market affect the economy?” it is obvious that the main topic of this article is about the stock market and how it affects companies and households. There are two main ideas of the article which I will summarize in this paragraph. Stock price declines, especially those induced by profit warnings, increase shareholder pressure on managers to cut costs by laying off workers and scaling back investment. Second, a large stock price decline reduces the value of unexercised stock options, which falls as the gap narrows between a company’s stock price and the price at which workers can buy stock under an option. Third, the factors dragging down stock prices, such as a weaker or more uncertain profit outlook, may spur investors to demand higher risk premiums, which boosts the cost of financing business investment. A fourth way lower stock prices affect firms is that they will have less incentives to invest in new capital if there is a fall in the ratio (q) of the cost of buying existing capital to that of buying new capital. Lower...
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...transformations of 16th, 17th and 18th century Europe. The consumer society emerged in the late seventeenth century and intensified throughout the eighteenth century. While some[who?] claim that change was propelled by the growing middle-class who embraced new ideas about luxury consumption and the growing importance of fashion as an arbiter for purchasing rather than necessity, many critics[who?] argue that consumerism was a political and economic necessity for the reproduction of capitalist competition for markets and profits, while others point to the increasing political strength of international working class organizations during a rapid increase in technological productivity and decline in necessary scarcity as a catalyst to develop a consumer culture based on therapeutic entertainments, home ownership and debt. The more positive, middle-class view argues that this revolution encompassed the growth in construction of vast country estates specifically designed to cater for comfort and the increased availability of luxury goods aimed at a growing market. This included sugar, tobacco, tea and coffee; these were increasingly grown on vast plantations in the Caribbean as demand steadily rose. In particular, sugar consumption in Britain[8] during the course of the 18th...
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...such as malls and shopping districts (Tyndall, 2009). This version of consumer-driven rules – culled from qualitative research and personal interviews – depicts a new notion of public-ness that is less egalitarian than ever before. It is a version of public space that is not entirely open to the public. Baker adds to this perspective by historicizing the commercialization of public space, dating the use widespread use of public space for advertising purposes to before the dawn of the 20th century (Baker, 2007). This argument inextricably links the notion of “culture” with “consumerism”, and sets the stage for the potential for access to public spaces to be consumed, or purchased. Finally, Klingle underscores this spatial history of consumption, placing the transaction of consumer power contexts as diverse as Thoreau’s Walden to the challenges environmentalists face in today’s high-powered, consumer-driven society (Klingle, 2003). Problem Statement However, a systematic and historical chronology of public spaces that conveys power relations borne out of consumerism has yet to be fully developed....
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...contributing factor? * people in wealthy industrialized society are on average happier than poor ones * greater wealth comes a greater ability to meet needs and desires * economic development has been shown to generate a steady increase in average happiness levels, but after a certain level of development has been reached the effects disappear completely * the middle class continue to feel squeezed economically * people are working harder, under more stress, less free time * some people question the value of economic growth altogether * serious sacrifices in order to keep a high growth rate * but growth isn’t making us happier * people spend their money on private consumption goods * something pathological about consumption habits * obsessed with acquiring more even though this leads to unreasonable sacrifices * is social criticism really a criticism or rather a piece...
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...Consumerisms Effect Consumerisms Effect Consumerism is defined as, “the theory that an increasing consumption to goods is economically desirable; also: a preoccupation with and an inclination toward the buying of consumer goods” (“Consumerism,” n.d.). With this said, is consumerism healthy for anyone who is involved? From American cultures birth after the revolutionary war, this society has relished the flattery of consumerism. The search for wealth, material goods, and happiness has no boundaries in this society. Although some positive influences exist within consumerisms definition, a darker side to this phenomenon cannot be over looked. Consumerism reflects many negative human attributes and its increase is adversely affecting American culture, societal equalities, and the environment. Consumerism, in all its forms, has been around since the earliest times of American culture. From the earliest time of America, directly after the Revolutionary War, this attitude of need and want for material good and what was considered the best was very evident. One would think that during a life altering divide of nations the concept of consumerism would stop between them, but during this time, Americans still sought British goods. A high perceived value and thought pattern that these goods were of superior quality allowed these items to become a status symbol for early Americans. George Washington, weeks after signing a peace treaty with Britain, ordered a large...
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...that the United States has become a consumerist society since the early 1900’s. A consumerist society is defined as one directed largely by the accumulation and consumption of material goods (O’Shaughnessy and O’Shaughnessy, 2002). This consumerism was said to have peaked during the 1950’s when it is said that happiness and contentment with life was at its greatest. Today, things have changed significantly. The adoption of modern marketing practices has led to the emergence of consumerist societies in the swelling middle classes (Chan and Cui, 2004). On one hand, this means that more people are earning enough money to spend. However, the increase in the spending power of the middle class had led to greater demand for consumer goods and thus the resources that are used to make them. The video discussed how much marketing has played a role in the way that people advocate for consumerism. Those who advocate against consumerism stated that social progress and economic development have caused contemporary marketing practice to contribute to a consumerist or materialistic society. The main issue with consumerism seems to be the fact that it is a system that consumes way more than it produces. As the video discussed the process through which consumer goods endure from extraction to production to distribution to consumption to disposal. The woman in the video pointed out that there are some missing links in the linear map that we are using to understand the process through...
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...Consumerism History of Consumerism Consumerism is a social and economic order that encourages the purchase of goods and services in an elevated amount. Consumerism as an ideology first appeared in Western Europe roughly three hundred years ago. It gave a rise in consumer’s need and importance to the display of material items. It promoted economic progress, a rise in small shops, an increase in the growth of cities, and an incline in individualism. A shift in the market hit right before the Industrial Revolution. Capitalist development and the industrial revolution focused on infrastructure and production and manipulation of fossil fuels. In 1919 consumerism began to sweep over the American population when General Motors Acceptance Corporation (GMAC) was established. The General Motors Acceptance Corporation mission was to issue loans to customers who had purchased a vehicle. Americans started the notion of “Keeping up with the joneses” which is the idea that Americans compare themselves to their neighbors, defining each stance in socio-cultural inferiority. With this new need for status with possessions was thought to be the beginning of the American consumer culture. Soon after The Great Depression and World War broke out. When the war-ceased consumers went wild, credit cards issued first for convince took off quickly to show status through the products each individual had. Consumerism gathered strength in the United States through internal trade growing, expansion...
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...American Economic Association Sudden Stops, Financial Crises, and Leverage Author(s): Enrique G. Mendoza Reviewed work(s): Source: The American Economic Review, Vol. 100, No. 5 (DECEMBER 2010), pp. 1941-1966 Published by: American Economic Association Stable URL: http://www.jstor.org/stable/41038751 . Accessed: 04/03/2013 15:09 Your use of the JSTOR archive indicates your acceptance of the Terms & Conditions of Use, available at . http://www.jstor.org/page/info/about/policies/terms.jsp . JSTOR is a not-for-profit service that helps scholars, researchers, and students discover, use, and build upon a wide range of content in a trusted digital archive. We use information technology and tools to increase productivity and facilitate new forms of scholarship. For more information about JSTOR, please contact support@jstor.org. . American Economic Association is collaborating with JSTOR to digitize, preserve and extend access to The American Economic Review. http://www.jstor.org This content downloaded on Mon, 4 Mar 2013 15:09:41 PM All use subject to JSTOR Terms and Conditions American Economic Review (December 100 2010): 1941-1966 http://www.aeaweb.org/articles.php?doi=10.1257/aerJ00.5.1941 Sudden Stops, FinancialCrises, and Leverage ByEnrique G. Mendoza* Financial crasheswerefollowedby deep recessions theSudden Stops of in economies. equilibrium An businesscyclemodelwitha collateral emerging constraint this as and of explains phenomenon a result theamplification...
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...growww.businessmonitor.com Q4 2010 AUStrALiA food & drink report INCLUDES 5-YEAR FORECASTS TO 2014 iSSn 1749-2580 published by Business Monitor international Ltd. AUSTRALIA FOOD & DRINK REPORT Q4 2010 INCLUDING 5-YEAR INDUSTRY FORECASTS BY BMI Part of BMI’s Industry Report & Forecasts Series Published by: Business Monitor International Copy deadline: July 2010 Business Monitor International Mermaid House, 2 Puddle Dock, London, EC4V 3DS, UK Tel: +44 (0) 20 7248 0468 Fax: +44 (0) 20 7248 0467 Email: subs@businessmonitor.com Web: http://www.businessmonitor.com © 2010 Business Monitor International. All rights reserved. All information contained in this publication is copyrighted in the name of Business Monitor International, and as such no part of this publication may be reproduced, repackaged, redistributed, resold in whole or in any part, or used in any form or by any means graphic, electronic or mechanical, including photocopying, recording, taping, or by information storage or retrieval, or by any other means, without the express written consent of the publisher. DISCLAIMER All information contained in this publication has been researched and compiled from sources believed to be accurate and reliable at the time of publishing. However, in view of the natural scope for human and/or mechanical error, either at source or during production, Business Monitor International accepts no liability whatsoever for any loss or damage resulting from errors...
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...Valued Possessions vs. Insignificant Desires Anna Quindlen, a novelist, social critic, and journalist wrote an intriguing essay “Stuff is Not Salvation” about the addiction of Americans, who splurge on materialistic items that have no real meaning. The ability to obtain credit is one of the main reasons to blame for society’s consumption epidemic. However, Quindlen feels the economic decline due to credit card debt is insignificant compared to the underlying issues of American’s binging problems. Quindlen’s essay gives excellent points regarding the differences in America’s typical shopping habits. Additionally, she mentions how people acquire all this “stuff” but seem to never realize, “why did I get this?”(501). Quindlen makes her audience visualize a world where we acquire our needs versus our meaningless desires. Yet, she fails to mention people who could live a life of happiness through the possessions they acquire. In summary, Quindlen supports her point of view with examples of American spending habits in the past decades of depression compared to now. She mentions Black Friday and how people become enthralled by cheap bargains (Quindlen 500-501). In Quindlen’s essay, she refers to an accident in which a worker at Walmart was trampled to death by a mob of shoppers and despite the horrific incident people kept shopping (500). With the U.S. depression, Black Friday brings hopes of more money spent, therefore a rise in the markets. The dream of an uplifted economy became...
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...Is Consumerism Killing Our Creativity? by Jocelyn K. Glei Have you ever fallen into a black hole of comparison shopping? You’re looking for a new digital camera, for instance. You head over to Cnet.com and read some reviews of various cameras, watch the video demos, identify the model you want. Then perhaps you employ Google’s shopping search to price out the options and find the best deal. All of the sudden, it’s four hours later. You’ve found the perfect camera, but your purchasing triumph is tainted by a creeping feeling of, well, disgust. Couldn’t that time have been used better?I was thinking recently about what my biggest distractions were – the things keeping me from pushing my creative projects forward. As I scanned through my daily activities, I found that the most insidious distraction was, in fact, things. More specifically, the wanting, hunting, and getting of things – whether they be tangible (a new computer) or intangible (information). As Annie Leonard says in The Story of Stuff, “Our primary identity has become that of being consumers – not mothers, teachers, or farmers, but of consumers. We shop and shop and shop.” We love our stuff. Yet more than the stuff itself, we love the act of finding it – the search, the anticipation. But why is consumerism – and particularly, an online hunt for the ideal purchase – so addictive? It turns out that our consumerist impulse stimulates the same part of the brain that fires when we’re on the trail of a great...
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...This report discusses macroeconomic factors that impact both the automotive and health-care industries. Interest rates, consumer price index (CPI), consumer confidence, Gross Domestic Product (GDP), wage rates, and inventory levels impact the macroeconomic environment to influence these industries in the short run. Consumption as a percentage of the GDP depicted in table 1 indicates a continuous declined in consumer spending from 2005 through 2010 and suggests that consumers are becoming more conservative with disposable income spent on elective health-care products and procedures as-well-as new vehicle purchases. As the nominal interest rates indicate in table 2, the FED attempted to encourage consumer spending by decreasing the interest rates to encourage expansionistic economic activity, which would also be a positive influencing factor for both the health-care and automotive industries. The automobile industry is volatile by nature and heavily influence by macroeconomic factors, while the health-care industry enjoys an inelastic environment. Macroeconomic factors influence the health-care industry, it is unlikely essential health-care demand will decrease in the short term; however, elective health-care products and services will likely suffer as will new vehicle purchases as consumers remain conservative. The future is not as bleak as one might anticipate. The automotive industry is traditionally volatile and dependent upon the macroeconomic environment and currently producing...
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...moving all the terms with national income (Y) to the LHS, we have Y[ 1 - c(1-t) + m ] = c0 + I + G + X Denoting the RHS (the sum of the autonomous components) with the symbol A, we have Y = 1 / [1 - c (1-t) + m]* A which gives us the equilibrium level of national income, but can also be expressed as changes: ΔY = 1 / [1 - c (1-t) + m]* ΔA The expression { 1 / [1 - c (1-t) + m] } is the multiplier (K). Dividing both sides of the above equation by ΔA ECON 1002 Feb 2013 We have ΔY / ΔA = 1 / [1 - c (1-t) + m] which gives us our first formula for K. What about the second formula? What is z? It is the marginal propensity to spend out of national income, which include the propensity to consume and the propensity to import. As we saw above, consumption spending comes out of disposable income, and therefore, the propensity to consume out of national income is c(1-t). We also assumed that imports represent a leakage from the circular flow, therefore, – m represents the propensity to import. We therefore have z = [c(1-t) – m] Notice that the minus sign in front of z in the multiplier formula will change the sign of its two terms and gives us the exact expression of K we derived above. What is obvious from the multiplier? From this expression we derived for K, we see that when c increases, the multiplier will increase, and when t and m...
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