economic homework

Evaluate the important of managing aggeregate demand to bring about a sustained reduction in the rate of unemployment in the Uk economy?

Aggeregate demand is the demand of total products and services in a economy in period time.
Unemployment is the people avaiable for working,but have no job and looking for a job.
Rate of unemployment the percentage of the labour force who are out of work.

Managing aggeregate demand is very important to reduce rate of unemployment.The changing in demand is responsive and have relationship to rate unemployment.When AD is high , that rate will be reduced.When Ad is low, that rate will be increased.

We can use monetary policy,fiscal policy or supply-side policy to control and reduce that rate:

Monetary policy: central bank and/or government decisions on the rate of interest, the money supply and the exchange rate.
-Decrease interest rate->Firms will pay less interest when they borrow->they have less risks->increase investment confidence->more investment->rise supply for labours->reduce unemployment.
-Decrease exchange rate->lower export product price->increase overseas AD->A long time increase AS->reduce unemployment.
-Raise money->More money->spend more->Increase AD->...->reduce unemployment.

Fiscal policy:the taxation and spending decisions of a government.

-Reduce income tax->more disposable income->Increase AD->...->reduce unemloyment
-reduce corporation tax->more firms profit->increase investment->rise supply for labours->reduce unemployment.
-Increase gorvernment spending->rise confidence->increase AS and AD->....->reduce unemployment.

Supply-side policies:policies designed to increase AS by improving the efficiency of labour and product markets->rise supply for labours->reduce unemployment.

70% of total UK's GDP now comes from sector->change in AD of that will affect a lots in GDP.It also means increase in government spending and improve for service will raise GDP.They can use fiscal policy because it depends on government spending.Also they should reduce their dependance on producing services.It will reduce their risks for them.....
More more more.....

business revision

1.when does promotion not involve adverstising?
-after sales service
-divrect mail
-branding
-packaging
-public relations
-personal selling
-price reduction
-sponsorship
-trade fairs
-demonstrations
-merchandising
2.why do companies have loss leaders?
Loss leaders means price less than cost.
They make it to consumers want to go to their shops for buying this product and also buy another products.
3.give 5 factors affecting demand for the product?
-taste and fashion
-income
-price of product
-substitute/complement
-advertising
6.if demand is elastic-what does this mean?
Demand is responsive
7.when exporting why might you use an agent?
-don't know their partners
-taste of consumers
-government policies
-language
8.why might it be hard for new companies to enter the market?
-market research needed
-monopoly existances/ oligopoly
-market size
-finance required

Business homework

Capacity concerns at Ice Delights:

1.Calculate the CapicityUtilisation for Ice Delights?

12000:15000*100%=80%

2.Are they currently operating below or above full capacity?

They are below capacity because his production levels just high enough to fulfil most of orders.

3.What implications are there for Ice Delights of operating at this level?

They have outdated machinery which make waste production times for waiting and repairing.It also makes him pay more fee to fix them.
Many of Bill's staff have been working for many years and good at their jobs.It makes high productivity .However, most of them have young families.They must use their times for their families more than working.For example, they have new baby.They will absent to take the baby.It makes his production have problems.He doesn't have enough time to have new worker and his capacity is below.Maybe the new worker isn't suit for this job.He has to spend time teaching them how to do their working.Another thing, his business is small and they have young famililies.They must be worried about their future,so they will give up their jobs if they find out another good pay ones.The same thing will be happened...Wasting times,lower capacity,...

4.Evaluate the options available to Bill when responding to the requests of the Directors?

I think to improve efficiency and lower cost per unit for tubs of ice cream they produce,there are many things he can do:
First of all, he can use economic of scale.It is the advantage of producting on large scale, in the form of lower long-run average cost.using it can reducce his products cost in a long times.
Second, he can buy a new machinery.In the short time, it will make his fiexd cost product raises ,but a long time it helps increasing productivity and reduce his cost.New machinery also help improving quality of product and saving raw material.He has a smalll business so buying new machinery will be a big problem for his cashflow....
Third,he should sign contact to his staffs to decrease their giving up and reduce a effect into capacity utilisation.
MORE MORE ,BUT I feel sleepy.Last night I didn't sleep...=....=

ken's blog is opened again

After a long time, I lived without laptop.I felt very tired.Everything must be started ,no more time.All of exams are coming soon, only 5 weeks left.How can I get A, it is impossible.From today, the word "daily blog" is starting....;))

Trucks set to roll on East-West highway

The first 1,500 vehicles of Vietnam, Laos and Thailand have been licensed to run on the East-West Economic Corridor (EWEC), which is expected to boost trade, investment and tourism activities in the relevant countries.

Representatives of the three countries met in the Central Highland resort city of Da Lat on February 25-26 to grant permits to 500 trucks from each country. The permits allow the vehicles to travel on the EWEC, particularly the section linking Vietnam and Laos.

The event will mark Vietnam’s first success in implementing the cross-border land transport facilitation agreement among the six countries of the Greater Mekong Sub-region (GMS), said Nguyen Van Thach, deputy director of the International Cooperation Department under the Ministry of Transport.

The GMS is comprised of Vietnam, China, Thailand, Laos, Cambodia and Myanmar.

The EWEC is an especially important corridor as it will create a channel for commodities coming from Thailand and Laos and going to Vietnam’s ports of Da Nang and Vung Ang, said Mr Thach. From there, the goods will be exported overseas. In addition, Vietnamese commodities will move to Thailand and Laos on the same channel. The EWEC is the shortest way for Thai goods to enter Vietnam and vice versa.

The 1,450km long road links the following points: Mawlamyine-Myawaddy in Myanmar, Mae Sot-Phisanulok-Khon Kaen-Kalasin-Mukdahan in Thailand, Savanakhet-Dansavanh in Laos and Lao Bao-Hue-Dong Ha-Da Nang in Vietnam.

It also intersects several north-south arterial routes: Yangon-Dawei, Chiang Mai-Bangkok, Nong Khai-Bangkok, Road 13 in Laos and Highway 1A in Vietnam.

The corridor aims to strengthen economic cooperation and facilitate trade, investment and development between Laos, Myanmar, Thailand and Vietnam; reduce transport costs and make the movement of goods and passengers more efficient; reduce poverty and support development of rural and border areas; and promote tourism.

Banks open doors wide, but few securities investors entering

Commercial banks have resumed loaning to fund securities investments, but they have not attracted many clients. Securities investors seem to be indifferent.

Banks have been pushing up loans

HDBank has announced a package of VND400bil ($23.5mil)it plans to loan to fund securities investments with securities themselves being the mortgaged assets. The VND400bil is part of a plan on disbursement for consumer credit worth VND900bil ($52.91mil). The lending interest rate is about 1.2% per month on average.

Eximbank is lending to securities investors at the interest rate of 0.833% per month only, equal to the interest rate applied to consumer loans, though funding securities investments is considered risky. Clients can borrow sums not higher than 30% of the securities’ market values.

Besides loaning to fund house and car purchases in installments, Tien Phong Bank also provides loans to fund securities investments at the interest rate of 10.5% per annum. Its clients can also borrow sums equal to 30% of securities’ market values for 12 months. However, borrowers must not have had bad debt at the bank in the previous 12 months.

Unlike previously, when banks hesitated to give loans to securities investors, they are now opening their doors wide to investors. It is because they now have profuse capital and they need to push up loaning.

However, despite the efforts by banks, loans to fund securities investments just account for a small proportion of their total outstanding loans. As the stock market has been falling, investors are hesitant to make investments with loans.

While banks have been pushing up loans, securities companies have also been trying to push up services, like repo service, to attract more investors. However, according to Nguyen Viet Hai, General Director of ACB Securities, though the capital reserved for repo service is profuse, and the repo service fee has been decreasing, it is still difficult to attract clients.

Representatives of Thang Long Securities Company (TSC) also say that the number of clients using repo service has dropped significantly since the beginning of 2009.

Analysts have said that in the current conditions, though the banks’ doors are open wide, clients will remain uninterested in loans as they will be under pressure to pay debts to banks on time while there is no sign that the market is on its way to recovery and stock prices are increasing.

Black market price for the dollar climbs

A single dollar cost as much as VND18,000 on the street on Friday.

The price represented a VND200-300 depreciation against the dollar within a day and a VND350-450 fall since Thursday morning.

Gold shops on Ha Trung and Tran Nhan Tong streets, Ha Noi, bought a single dollar at VND17,750-17,800 and sold at VND17,950-18,000.

The rate at small shops ranged from VND17,600-17,750.

In the non-deliverable-forward, or NDF, market – where investors anticipate the value of currencies – the monthly cost of the dollar was expected to rise to VND18,300 within three months – up VND700 against late last year – and VND19,200 within six months.

The dollar is expected to cost VND19,900 by December.

But the State Bank of Viet Nam reduced the daily inter-bank exchange rate by VND3 to VND16,974 on the mandated market.

Vietcombank’s buying and selling price was the same at VND17,483 and the exchange rates at commercial banks remained at the upper limit of the adjustable peg.

The Vietcombank’s rate at the end of 2008 was VND17,494 compared with VND16,025 the previous year.

Several bankers described the demand for the dollar as normal.

"Purchasing power in the domestic market is not growing and demand from enterprises to pay for imports remains limited," said Asia Commercial Bank deputy general director Nguyen Thanh Toai.

The currency, at its most volatile, had ranged between VND15,825 and VND17,495 throughout last year.

Why the high price?

So why the high price on the street?

Senior economist Le Dang Doanh believes that both business and individuals are seeking safety in the dollar.

Others believe the Government decision, announced last Friday, to issue bonds denominated in the dollar to fund key national projects and help offset the budget deficit has added to the currency’s popularity.

People believe policy makers will allow the depreciation of the domestic currency to make the bonds more attractive.

As PXP Viet Nam Asset Management’s Kevin Snowball explained: "Investors will buy bonds if the foreign currency is stronger because they’ll make money.

"They won’t buy bonds if the foreign currency is weaker because they’ll lose money."

Also gold traders, who sold to take advantage of the high international price for the precious metal, are turning their dong into the dollar because the interest banks now offer for deposits is not as attractive as several months ago.

The likelihood that the interest paid for dong deposits will fall as low inflation in Asia, including Viet Nam, allows the central bank to further reduce the interest rate also promotes the dollar.

In addition, the Harvard Kennedy School of Government and some international banks have advised a further, orderly depreciation of the dong this year to boost exports and narrow the trade deficit.

Then, as Asian stocks slide and insolvent banks face the prospect of public ownership, investors are choosing the safety of the dollar, US Treasury bonds and gold.

And many bankers agree, the Government is unlikely to intervene in the market.

Hot gold

Gold jumped slightly to VND19.67 million (US$1,130) a tael yesterday, up VND20,000 per tael against late Thursday.

The price followed the world price for the precious metal, which had reached $978.20 an ounce – up $4.80 and its highest for more than six months.

A tael equals 1.2 troy ounces.

On the Sai Gon Gold Trading Exchange in Ha Noi, gold cost VND20.47 million ($1,133) per tael.

In Ha Noi, the Phu Nhuan Jewellery Co, PNJ-DAB, the buy-sell price for gold leaf was VND19.58/19.66 million ($1,125-1,129) per tael.

At Bao Tin Minh Chau Jewellery Co (BTMC), gold traded at about VND19.54/19.62 million ($1,122-1,127) per tael while at the Sai Gon Jewellery Holding Co, it was about VND19.60/19.67 million ($1,126-1,130) per tael.

Sellers, who offered not only gold leaf but also gold jewellery, heavily outnumbered buyers in the morning and early afternoon.

Viet Nam Gold Trading Association member Tran Quoc Quynh forecast that domestic gold prices would increase during the next few days because of the international trend upward.

It could plateau at $1,050 per ounce because of the heavy demand in the US, Russia, China, Switzerland and France, he said.