Continents Trading compare (The United State and Taiwan) Essay

Continents Trading compare (The United State and Taiwan) - Essay Example Technology has enabled people living in US to be able to access products that are manufactured in different countries. To get a product in a foreign country, a person will only check the relevant website selling the product, see the price and purchase through online banking. The product will be delivered to the place of resident through different means such as air mail or shipping. After reading Jared Diamond’s statement, the â€Å"Cargo hypothesis†, I came to understand what is meant by the geography and the development of one country. In his statement, he gave an example about why European countries develop better than many other countries, and according to his understanding it is as a result of geographical location. At first, I dint agree with her statement that development rate differs because of geographical location. At first, I thought the geographical position of all the European countries is not different from countries such as the American and Asian. European countries are rich and they have capability of investing in different fields in order to improve on their technology: for instant, Chinese government always try to improve the country economy by all means. Some people think that the country is poor but according to my own opinion they are not poor, it is only that they do not understand how to increase the country economic and lif e style level. This reminds me of the statement that Diamond gave concerning understanding and knowledge. He argued that knowledge is very important since it help a country develop: the more people to get educated, the more development in that country. In many Western countries such as England, France, and U.S., people can easily access education unlike in countries like China. This is a big issue which has caused different rate of the development in different regions. In this project, I will be focusing on Asian continent, Taiwan, which is a well-developed

The introduction to macroeconomics, bubbles, and investment behaviour Essay

The introduction to macroeconomics, bubbles, and investment behaviour in Part Three of the module, Bubbles and the economy - Essay Example Therefore, the accounting identity can also be explained as: As shown in the above graph, the savings (s) in a closed economy is always given exogenously. The investment in the market (I) is a function of rate of interest (r). The cost of borrowing money in an economy becomes high when the lending rate of interest is elevated. Hence, investments made in the market are adversely related to the lending rate of interest. At equilibrium rate of interest (re), national savings and investment remains equal to each other (S=I) (Baddeley, 2005). When the aggregate savings in an economy rise up to 30% of GDP, the investments can be expected to increase (to match savings) only if the lending rate of interest (r) falls below the previous equilibrium rate (re). (ii) The supply side policies are implemented in an economy for increasing productivity of its real national output, during a state of recession. These policies help an economy to grow sustainably, without the persistence of inflation (Bernanke, Gertler and Gilchrist, 1996). However, economic growth cannot be successfully achieved solely with the essence of supply side policies. The supply side approach is rendered successful with presence of adequate aggregate demand in the economy. If the housing confidence slumps and the economy suffers from recession, then the individuals desire to save more and spend less. As a result, if the monetary authorities of a country lower interest rate and stimulate investments, then aggregate production related activities will rise, but the output produced will not be sold adequately due to lack of consumers’ demand (Mankiw and Taylor, 2006). (iii) The problems associated with a supply side approach can be resolved with the help of expansionary fiscal policies. These policies will enable the government authorities to stimulate the level of aggregate demand. Such initiatives can be undertaken by the fiscal authorities by way