Research about the Great depression

The Great Depression was a world economic calamity that began in 1929 and it lasted until about 1939. It was the longest and most severe depression ever experienced by the industrialized Western world.

       As we know that U.S economy was the first one gone into the depression; the Great Depression may be said to have begun with a unexpected collapse of stock- market prices on the New York Stock Exchange in October 1929. Besides ruining a huge amount of individual investors, this precipitous decline in the value of assets constrained banks and other financial institutions. Many banks were consequently facing the situation of insolvency. At this point the collapse in the stock market had affect the aggregate supply in general. For these holding stocks in their portfolios had loose great assets, so they would need to cut off the supply to make up the loss, since they don't have any more money, they can just announce bankruptcy. So those money people saved in the bank are gone; that was the start of this severe economic war.

       Since the Great Depression started to disseminate, Willis C. Hawley(May 5,1864- July 24,1941) who was an American politician and educator in the state of Oregon raised the Smoot-Hawley Tariff in 1930. The Smoot-Hawley of 1930 was the subject of enormous controversy at the time of it passage and remains one of the most notorious pieces of legislation in the history of the United State. The usual assumption is the Smoot-Hawley tariff was the policy disaster that significantly worsened the Great Depression. The original intention behind the legislation was to increase the protection afforded domestic farmers against foreign agricultural import. Due to the massive expansion in the agricultural production sector outside of Europe during WW1 led to declining farm prices during the second half of the decade. However, soon after this revision has been made, it seems impossible to stop; a bill meant to provide relief for farmer became a means to raise tariffs in all sectors of the economy.  The Smoot-Hawley Tariff did not make the Great Depression any better, but even worsen it. It provoked a storm of Foreign retaliatory measures and came to stand as a symbol of the beggar- thy-neighbor” ( policies designed to improve one’s own lot at the expense of that of others) in 1930s. Such policies contributed to a drastic decline in international trade. For example, U.S. imports from Europe declined from a 1929 high of $1,334 million to just $390 million in 1932, while U.S exports to Europe fell from $2,341 million in 1929 to $784 million in 1932. Overall, world trade declined by some 66% between 1929 and 1934. So this legislation putted burden on import’s taxations in order to protect the GDP stable. To set the price level higher from imports, in order to decrease the demand of imports; which will cut the supply of production. We all know that Great depression has already made a falling consumption and falling investment spending that resulted in the equilibrium level of GDP being far below its full employment level. It may seem like a brilliant idea to keep the equilibrium level of stable by reducing the level of imports (EX-IM). However, there was a potential flaw that Smoot-Hawley did not count in the negative impact on U.S exports. In fact, it may have had a negative impact on exports if foreign governments were led to retaliate against the passage of Smoot-Hawley by raising tariffs on imports of U.S. goods. Generally, Smoot-Hawley did not think comprehensively to consider the situation as a whole. Among all information, the passage of Smoot-Hawley had been a policy blunder that had worsened the Great Depression internationally at that time period.   

After the Smoot-Hawley Tariff been out and made economic worse; the election of Franklin Roosevelt had change the role after all. As a representative of government, he worked to create numerous programs in order to provide jobs for individuals through his New Deal, which alleviated people who suffered from a harsh condition in Depression.  His 10 New Deal programs were CCC(Civilian conversation corps), CWA( Civil works administration), FHA(Federal housing administration), FSA(Federal security agency), HOLC(Home owner’s loan corporation) ,NRA(National recovery act), PWA(Public works administration), SSA(Social security act), TVA(Tennessee valley authority), and WPA(Works progress administration). The aim of these programs was creating jobs for people, in order to active economic, so people can consume products, and business can keep on.

            However, few of these programs failed to create sustainable jobs, even though it has

NOT DONE YET

Sources cite:  1.http://future.state.gov/when/timeline/1921_timeline/smoot_tariff.html  tariff

               2. http://americanhistory.about.com/od/greatdepression/tp/new_deal_programs.htm 10 new deal

3http://eh.net/encyclopedia/article/obrien.hawley-smoot.tariff  tariff

4http://blog.aynrandcenter.org/the-new-deal-and-world-war-ii-didn%E2%80%99t-end-the-great-depression/  how did keynesian theory helped world out of econ recession. 

5http://www.english.illinois.edu/maps/depression/about.htm about great depression

http://www.telegraph.co.uk/finance/london-olympics-business/8995602/Tough-race-to-turn-Olympics-energy-into-economic-growth.html

Tax+ Subsidy ---- Good or bad?

TAX

   tax is a fee charged by a government on a product, income or activity. Tax can be levied on personal or corporate income; also  tax can be levied on the price personal or service. It is people's duty to levy the tax. And the purpose of taxation is to finance government expenditure. One of the most important uses of taxes is to finance public goods and service (e.g street lighting & clearing) people pay taxes to make the living condition better. but sometimes, paying over high taxes can cause some unexpected damage on economy.

    High gas prices are usually caused by high prices for crude oil, which accounts for 55% of the price of gasoline. In April 2011, fears about unrest in Libya and Egypt sent oil prices up to $113 a barrel.

Distribution and taxes influence the remaining 45% of gas prices. In May 2011, as oil prices dropped, gas prices stayed high. Why? Commodities traders were concerned about refinery closures due to the Mississippi River floods. Usually, distribution and taxes are stable, so that the daily change in the price of gasoline accurately reflects oil price fluctuations.
     (http://useconomy.about.com/od/commoditiesmarketfaq/p/high_gas_prices.htm0

      Subsidy

A benefit given by the government to the groups or individuals usually in from of a cash payment or tax reduction. The subsidy is usually given to remove some type of burden and is often considered to be in the interest of the public. for example what is happened in America about the  health care which was not actually working so well,  patients have to wait for a long time to get the treatment. even people are paying somuch for the tax and government has paid for the hospital and doctors. but still, it can not satisfied for much patients. and in USA, when it is about pet hospital, it is even working better and no need to wait for a long time
http://www.youtube.com/watch?v=cR5KN1O5hVk&feature=related

Oil Boom- who is the one getting hurt?

elastic or Inelastic ? 

Labels on : Jobs, people's Educations, Rent of Housing, affect in the society.
           

Earlier this year, in Glendive the epicenter of the hectic Bakken oil development has destroy the equilibrium of economic and the enrollment of colleges around.



After some investors found out there is plenty of Oil resource around Williston, a great number of  oil factories have built up.It was a development with unexpected, and the growth increased rapidly. 
it has provide people lots of jobs, but it also caused the lack of equilibrium.
it started destroy the way of housing, educations required, at that region, because the jobs required too much.

   that caused a one-bedroom apartment in Glendive that used to rent for $400 now goes for $800 to $1,000. Mobile homes rent for $1,000 or more. however, the motels and hotels are still full, some oil filed crew are living in Glendive; because there is no vacancies in Williston and Sidney. 



The high rents have made students feel hard to found places, also it makes difficult for school to hire staff members, because most of them are not willing to pay such price for a place to sleep.


it could affect the enrollments for students also for staff members. 
Not only because of the rent of house, also it affect student's ambition
because of this oil development increased too fast,  they need plenty of new workers,
some high school graduated kids who can earn $25 an hour in the oil field are going to work after graduation instead of going to college. 
Those people, who suppose get good educations and good futures, but they have decide not to, just because of 25 dollars, just because of some benefit for while.  


even though those firms are providing jobs for people,but base on the boom, it is not a good new for the society.

First of all, the housing  rent has gone up rapidly which people cant afford to pay. 
so let say people are paying most of their salary for the housing,
they will not get much money left after foods and some necessity product.  

So the Demand of other product(ex: clothes, foods,) would gone way down, but only the ( hotel, apartment, motel) housing's revenues are going way up.
and people will not live well. 
 what can those workers do after they finish this job, they didnt  go to universities, they dont have enough work experiences to do other jobs. It would lead a downturn to the economic development by loosing a massive of human resources, because there wouldnt be enough employees with well education.  That will cause the human resource loose, and company would seek  foreign high educated employees, which will lead the domestic  unemployment rate increase. 

Examination questions - Elasticity

1. with the help of examples, explain the determinants of price elasticity demand.

       PED- Price Elasticity of Demand : Measure how much does the quantity demand changes when the price changes.
    （ from wikipedia) 


  the value of the PED as : Inelastic demand is greater than 0, less than 1.
                                       elastic demand is greater than infinity.


For example, An inelastic product ( OIL) : A change in the price leads to a proportionally smaller change in quantity. Oil is a common and necessary product for living. so even the price changes higher 

Japan bans Fukushima rice shipment due to contamination

Japan has banned shipments of rice from an area near the nuclear power station at Fukushima after high levels of radioactive caesium were detected.

As people knows, at the beginning at 2011, Japan gots a horrible earthquake and tsunami which caused the damagae of Nuclear power plant. It is resluting in radiation leak.

   Luckyily, the material was detected during pre-shipment tests and the contaminated rice had not been sold to consumers.

   even though, the authorities has annouced that it is the first time they found from shipment. But still, the damage from eathquake has bring series of trouble about foods. 

it terrified people to export goods from Japan, , such as green tea, mushroom and beef. 

at the mean time, it hurting the incomes of farmers in some parts of Japan also affected the economic in Japan.

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Elasticity of Demand VS Inelastic demand

- What is the Elasticity ?
     Elasticity = A measure of responsiveness. ( MEASURE means measure how much of something changes when there is a change in/ of the factors that determine it.)

- Elasticity of Demand = PED ( Price Elasticity Demand)
      Measure how much the quantity demand changes when the P of product.
   
               The equation for it  PED = %ΔQd  /  %ΔP
        when PED = 0 it is perfectly inelastic
     

- Inelastic Deman : PED greater than 0,
                             PED smaller than 1.
         
      A change in the P leads to a proportionally smaller cange in the Qd. ( totally revenue gained by a firm will increase)
         Inelastic D + better Revenue = Raise the P