REDO: CHAPTER 6

Hundreds queue for today's Vancouver Apple iPad 2 launch

http://www.vancouversun.com/news/Hundreds+queue+today+Vancouver+Apple+iPad+launch/4505463/story.html#ixzz1JSWcmF94

Summary

Just several weeks ago on March 25th, the new Ipad 2 was released in Vancouver. Many people were already lined up outside Pacific Centre and by noon, hundreds of buyers were lined up hoping to get their hands on this new gadget. Apple staff was considerate enough to keep their potential customers satisfied, handing out hot coffee during the cold and rainy day. Meanwhile, inside the store, other members of the Apple staff were preparing for the launch later in the day. Even people who were only waiting in line since midnight to help reserve a spot for their friend ended up wanting to buy an Ipad for themselves! People were interviewed and judging by their response, they are very much willing to wait as long as they can to get this Ipad! People were well prepared with chairs, sleeping bags and snacks. By midday the lineup expanded down along Granville Street, consumers were also lined up at Best Buy, Future Shop, London Drugs and Simply Computing for the Ipad.

Connections

Seeing that the new Ipad 2 has such a high demand it is obvious that this launch has significantly increased the consumption in the economy. The Ipad 2 16gb 3G is released at a whopping $699+tax, assuming mainly people living in a household with a higher income would purchase it. This is due to greater accumulation of wealth which gives a greater ability for people to spend that money. The Ipad 2 is advertised to be seen as a desirable product that's better than the original Ipad, this brainwashing fact causes people to have psychological changes. People's tastes and preferences, and motives towards spending affects consumption as well. This is also definitely a factor of the introduction of a new product to convince consumers that a change in their lifestyle is required. This definitely changes the household consumption because people are choosing to spend money from savings. which results in the higher level of consumption. Other than levels of consumption, levels of investment spending is also affected by this launch of the new Ipad 2. The variables include innovation and changes in technology, due to the new and improved Ipad, companies such as Best Buy and Future Shop purchase it as well in order to improve the efficiency of their operation.



Reflection

I'm surprised to realize how much I've learned from making connections with the information given in this article and the textbook. The almost two week old release of the new Ipad 2 has made quite a significant impact on the economy. It has motivated people to spend money instead of saving it. It persuaded people into wanting it because it has more desirable functions and improvements. It has been convincing enough for people to want it because they believe it is a necessary change in their lifestyles. It has also given other companies a reason to purchase from Ipads in order to improve the efficiency of their operations. Also, in order for other companies to compete, these companies are forced to continually update their equipment and methods of operation. I never realized until now how much of an impact the launch of the Ipad 2 could have on some many things.

Great Depression VS Current Recession

1. How did Great Depression start?
The Great Depression was an economic catastrophe that took place around 1920s, the decade prior to World War II. On October 29, 1929 also known as Black Tuesday, was the official day that it became a worldwide concern when the stock market in America began to decline and crashed. This severe drop in stock prices spread to almost every country in the world creating a huge economic depression. This created a panic in many countries and a lot of people withdrew their money from banks. There was a closure of many banks due to the immeasurable amount of money loss in the stock market. This lead to the widespread closure of businesses which left hundreds of thousands of people without a job.

2. How did the current recession start?
The Current Recession was a major turn down in economic activity that spread across the economy. It started nearing the end of the year 2007 and lasted for several months. This recession caused tribulations in the financial markets and many reductions in the housing markets. American banks giving out too much money to those who were unable to pay back those loans also made a significant contribution to this recession. In the intervening time, there was an increase in unemployment rate; prices for manufactured products and oil were also increasing.

3. How did the government take part following the event? Were/are there successful attempts?
During the Great Depression in the 1930s, the government concentrated on providing and creating social programs and work programs. What the government was doing at that time made a huge and successful contribution towards the growth of social reform. Their attempts to restore the country included placing money in local economies to create more jobs and lower unemployment rates. That money went to raising tariffs to protect industries within the country, which created employment insurance.

Now, in the current recession, the government is continuing to aim for increasing employment rates. Which meant spending billions on our country, helping companies that are financially unstable. The government’s add to new and efficient technology and science towards creating a better economy has definitely made a positive impact on our country. I personally feel that the government’s attempts towards the recession has helped the country a lot seeing that we are currently doing well and seeing less crisis’.

4. What factors are present now that were not present during the great depression? (banking, online resources, etc)

During the Great Depression, there were a number of factors that are present now that weren’t present back then. Some of the most remarkable improvements include online banking, Internet access, credit cards and better government support. Of course these services and access give more convenience for people to make quicker transactions and bill payments.

5. How did these two affect United States’ GDP?

With the combination of both the Great Depression and the current recession, both events make a huge impact on the United States’ GDP. During these times, people ended up spending less and saving more money. People were unable to afford and were not willing to spend money on luxury items that they were able to in the past. The response to the poor consumer behaviours caused many people to lose their jobs. The United States lost a significant amount of money over during the Great Depression.

Reflection: in your own words tell me which one has made more of an impact on the world.

I believe the Great Depression was a larger impact on the world compared to the current recession. Seeing that the event of the Great Depression took place during a time of an undeveloped world it struck harder compared to the recession. At that time, countries were undeveloped and didn’t have as many factors that are present now that weren’t available back then. Also, the drastic increase in unemployment rates compared to the present day rates is completely diverse. With the help of improved technology, science and government systems; compared to the several years old Great Depression our country is at a more stable state.

http://wanttoknowit.com/when-did-the-great-depression-start-and-end/

China GDP to Grow 8.7% in 2011, Down From 10%, World Bank Says
http://www.businessweek.com/news/2011-01-13/china-gdp-to-grow-8-7-in-2011-down-from-10-world-bank-says.html

Summary

This article was written earlier this year back in January. It discusses about the prediction of China’s economy expansion to 8.7 percent in 2011 but still down from 10 percent compared to last year. As for 2012 China is predicted to grow only 8.4 percent says the Washington-based lender forecast. The World Bank also mentions the government will continue to limit increases in asset prices. It is said that the growth of China dropped due to the restrictions placed on overheating sectors such as housing and a tighter monetary policy. The bank’s chief economist for East Asia and the Pacific also says that China has a considerable wide range for more rate increases. A surprising inflation in China increased to 5.1 percent last year's November, the fastest acceleration in 28 months, by higher food costs.The bank expressed concerns about assets in the East Asia and Pacific region, including some of the largest economies like China, Indonesia, Thailand and Malaysia. Indonesia’s economy is forecast to grow 6.2 percent this year and 6.5 percent in 2012. Thailand is projected to grow 3.2 percent in 2011 after 7.5 percent growth last year, the bank said.


Connections

Chapter 6 discusses about how to explain equilibrium GDP, fiscal-policy changes necessary to reach equilibrium GDP as well as multiplier formulas to calculate changes in equilibrium GDP. However this article focuses mainly on the increase and decrease in GDP growth in China and some other large economies such as Indonesia, Thailand and Malaysia. The article states, "China’s growth will ease partly because of “the unwinding of fiscal stimulus, restrictions placed on overheating sectors,” such as housing, and a tighter monetary policy, the bank said in a report released yesterday." Which explains some of the reasons for the changes in China's growth. The textbook gives many examples of what may cause these changes to occur but these examples are more in general.

Reflection

The textbook gives a better example and explanation of what GDP is and makes it easier to understand the dicussion within the article. I for one did not know GDP can decrease and increase so dramatically and how important it is towards the economy. I also did not know some of the largest economies include countries sch as China, Indonesia, Thailand and Malaysia. I've always thought China's GDP was increasing each year because of all the products produced however, this article shows that China's GDP has been decreasing compared to the previous years. Overall, I've gained a better understanding of the importance of GDP within countries and the impact it has for it's economies.