How long do you think its going to take to get to all virtual cards? How many years?
Judging by the article about smart phone money (http://business.financialpost.com/2011/04/23/smart-phone-money/) and another article I found about virtual prepaid debit cards (http://www.getdebit.com/debit-news/4471/the-bancorp-bank-to-offer-virtual-prepaid-cards/), I get the impression that many technology based companies such as Near-field communication (NFC) is leaning towards finding different ways to bring about the digital replacement of the centuries-old wallet, starting this year. Company called Net1 Virtual Credit Card, Inc., has also created a new product in the prepaid industry that offers consumers a "Virtual Payment Card" that can be accessed on a mobile phone. These articles state that the companies are aiming to produce more digital products replacing physical debit/credit cards within this year of 2011. I, myself have had a debit card for almost 3 years now and ever since I got myself an iPhone, last November, I began using online banking apps. I can tell this is the start of my first step towards virtual debit/credit card payments. Therefore, my predication is that, it will take at least 3-4 more years for people to settle in and fully get use to digital transactions and payments.

Why?
Within the 3-4 years, the first year or two would be the transition and getting use to using virtual payments. The next few years would be the increase in usage of virtual cards and so on. Numerous companies have just begun to receive positive results from their newly produced products, that can be accessed through mobile phones, it won't be long until it becomes world wide. Especially for Net1 Virtual Credit Card, Inc., with their new product being a smart phone application, VCpay, and also with the lease of iPhone4, BlackBerry Torch, and many more, the digital replacements will definitely come in effect fast. VCpay was launched a month ago and sent to tens of thousands of subscribers, which also proves the rapid spread of smart phone virtual credit card usage.

Who will not be on board with this new virtual wallet?
People like new comers wouldn't be likely to use it because getting started would affect the start of financial cost. For instance, to become a virtual banker / credit card user, you would have to first sign up for a credit card. Secondly, get a smart phone which costs around $500 unless you sign a three year contract which also adds up. Thirdly, start a data plan which also costs around an extra $20-40 on top of you base plan. People who have low income and are struggling financially would definitely not use this new method. Also, people like my mom who barely uses her debit/credit card and doesn't own a phone wouldn't use it either. The start up cost would be a hassle and wouldn't be convenient. Also for many of the younger generation teens and seniors wouldn't be very much a part of this new transition. I'm sure majority of parents wouldn't allow their children to get their own debit/credit card until they're 18 years old. As for seniors, many of my grandma's friends as well as her, don't use any sort of credit/credit card because most of the places they shop and dine at are "cash only" places. It very much depends on the person's life style, differs from age, culture, and habits.

What companies are going to be affected negatively by this? Name 3.
Companies like MasterCard Worldwide, Visa Coorporate and American Express would be affected negatively by this change. The MasterCard Worldwide company, contributing in the rise of the electronic payments industry has helped the growth of the economy. MasterCard Worldwide provides a combination of expertise, industry-leading insight, and globally integrated resources. With the transition of virtual payments and transactions, the MasterCard company would be struggling and dealing with a lot of changes to adjust their strong partnerships with customers to the usage of digital cards. Visa Coorporate also is a global payments technology company, connected to many consumers, businesses, banks and governments in more than 200 countries and territories. Governments here and abroad have switched to digital currency instead of check for benefits payments and purchasing in order to increase efficiency and lower costs, saving taxpayers money. With the changes in paying methods, many of their networks would also be forced to do the same, causing possible loss in connections and partnerships. Same with American Express, being a significant contribution to the economy, the changes would cause their company to face many changes and adjustments.

Who is going to make money from this? Name 3.
Cell phone companies, internet providers, and companies that are developing virtual card payments would be benefiting from this change. Cell phone manufacturers such as Apple, BlackBerry and HTC would benefit because with their new smart phones being released, the use of online banking and payments have increased as well. This connects to data plans which are provided by internet companies such as Telus and Shaw who then partner up with cell phone companies like Fido and Rogers. From cell phone producers to mobile phone carriers to internet companies to companies involved in virtual credit cards. This whole cycle shows how the change from using credit cards to virtual cards would benefit who and how.


Sources:
http://business.financialpost.com/2011/04/23/smart-phone-money/
http://www.getdebit.com/debit-news/4471/the-bancorp-bank-to-offer-virtual-prepaid-cards/
http://www.mastercard.com/us/company/en/ourcompany/the_mastercard_story.html
http://en.wikipedia.org/wiki/American_Express
http://corporate.visa.com/about-visa/our-business-index.shtml

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.

http://www.tax-news.com/news/Canadian_Government_Highlights_Tax_Reliefs_For_2011______47075.html

Canadian Government Highlights Tax Relief For 2011


Summary

This article focuses mainly on some of the important tax changes that the Canadian government has made that will be taking place this year of 2011. It starts off with the tax reduction of the general corporate income tax rate. This reduction will result in higher wages, more jobs and improved living standards. This has been reduced by 1.5%, originally it was 18% now 16.5%. There will also be improvement in child benefit for specifially parents who live sepereately and share custody of a child. These parents will each recieve several benefits such as Canada Child Tax Benefit and Universal Child Care Benefit. This change will be in effect for benefits payable starting July 2011. Furthermore, specifically for parents and grandparents who need more struggle with providing long-term financial security of a child or grandchild with a disability, the government has applied the tax-free rollover. This results in a decrease in the individual's Registered Retirement Income Funds or Savings Plan which will be a part of the Registered Disability Savings Plan. However the contributions from Registered Disability Savings Plan will only affect those who passed away after 2007, which will also be in effect after June 2011.


Connections

As I've read the article focuses on mainly 3 different tax changes, general corporate income tax rates, retirement funds and disability savings plans. Just as the textbook states, "the largest component of governement spending is social services. These services also include child tax benefit program employment insurances. More than $11 billion was once spend on employment insurance benefits and admintration. The article says that there will be a reduction in general coporate income tax which benefits the business industry because it means there will be higher wages, more jobs and improved living standards. While the government is reducing and making tax changes, it is both a positive and negative change. The reduction of taxes means the government recieves less money. However, the government is able to control and balance the spending in Canada. Majority of the governments spending goes to goods and services. The changing being made on certian funds and tax rates this year will not affect the government. Page 120-123 in the textbook talks about the growth in government spending and where it is being spent. The changes in tax this year is a benefit to a lot of people in Canada especially for those who are working or are registed in a retirement of disability savings plan.


Reflection

After reading this article I've become more aware of the importance of tax and how little changes in tax rates have a great amount of impact on many people. I think it is good that the government made these changes because is helping a lot of people with their long-term financial savings. Especially for those who are nearing retirement and struggling financially. However these changes don't really affect me or benefit me now, they will probably be in the future.

Small business entrepreneurs alive and well in the West
Summary by Cathy & Cecilia

The deveoplement of enthusiastic and optimistic entrepreneurs for their prospects, is a major reason as to why cities and regions in Western Canada continue to hold most of the top spots of the third annual FP/CFIB ranking of Canada's top 100 entrepreneurial cities. Cities from Alberta, Saskatchewan and British Columbia are nine of the top ten while Grande Prairie is in first place. The only Eastern city in the top 10 is Saint Georges, Quebec on the other hand is at ninth place. The highest ranked region in Ontario is the Greater Toronto Area which is unforturnately, at a disappointing twenty.

There are plently of openings for entrepreneurs with new ideas for taking current ideas and expanding from them. However, there are still some challenges in major industrial areas such as in Ontario and Quebec. Small firms do well, those who rely on major supply chains on the other hand, will be facing many problems. If entrepreneurs are unable to earn one million dollars within two weeks, their projects are most likely to be unsuccessful. Ontario is a disadvantage today relative to Alberta and Saskachewan because very few people will put up with how difficult it was to do start or operate business in that area. Some of the hardest-hit cities in the recession such as the auto manufacturing centre will need a culture change if they want to attract entrepreneurs. Entrepreneurs go to where the money is, therefore, it is not surprising that Western Canada shows greater success rates.

Benjamin Dalziel and Joseph Fecciola are two independant business owners who left Ontario to open up a food and wine tour business. The concept is a guided three hour walking tour that includes a four course dinner spread across four resturants. Although they are worried about many financial problems, they are motiviated to start their business in Toronto while the economy is starting to crumble. Eventually many of the high price resturants in Whistler wanted to get involved with their business tour.

Want an iPhone 4? Better line up
http://www.thestar.com/business/companies/apple/article/849001--want-an-iphone-4-better-line-up


SUMMARY

The demand for iPhone 4 has been increasing day by day, while supplies are still yet to come. Everywhere across the globe, there has been huge line ups in front of stores and even around the block. Some line ups are formed even as early as 5 am in the morning. In every country, and city, stories are the same; the demand of iPhone 4 has outstripped supply. Apple doesn't have enough supply of the phone to match the number of customers that line up outside the stores. Majority of wireless companies are sold out of have limited quantities of the phone. There companies include Rogers Communications, Bell Canada and Telus are advising customers to call the stores or go to the company websites to find out the more information about the phone. Rogers was sold out of iPhones and sent updates on Twitter, as well as their blog regarding the phone. There were many complaints building up about the shortage of iPhone. Bell Canada and Telus are also limited in quantities but Bell is accepting $50 deposits. Apple has no explanation as to why there is shortage on iPhones and suggest customers call local stores to find out more information about stock. It could possibly take days, if not weeks, before Apple is able to mange equilibrium between supply and demand.


CONNECTION

Apple's latest and most impressive smart phone iPhone 4 has reached a increasingly high demand. However, many wireless company's as well as Apple stores are short in supply. It's not that apple is unable to establish equilibrium between the supply and demand of the phone. The reason why Apple is creating a shortage in supply; they want to keep the price constant. For that reason, Apple will still be gaining profit without having to decrease their prices. As more and more people purchase iPhone 4, fewer amounts of this phone will be available in the market. The price range for this phone is high but consumers continue to have strong demand for this product. The increase in demand caused by the decrease in supply resulted in increase in prices and increase in quantity exchanged.

REFLECTION

Surprisingly, I use was one of those people who lined up in front of an Apple store for hours. It took me approximately 5 attempts to finally get my phone. After reading this article it made me realize how annoying it is to many other people as well. I was frustrated when i had to wait for my phone and finding out they were out of stock. I think they should at least provide some sort of information about the iPhone stock in advance. Other than that, I can still relate to the reason as to why they choose to have a shortage in supply. This increases their demand and still allows them to maintain a high price on the iPhone. I think the iPhone will continue remain very popular for a while because the white version will soon be available in stores as well.