1. How did the Great Depression start?
- The stock market crash on 1929
- Bank failures
- Reduction in purchasing
- Overproduction
- High unemployment rate
- Drought occurred in the Mississippi Valley in 1930 and caused farmers to sell their farms
- America put high tariffs to protect American companies and led to less trades with foreign countries
2. How did the recent recession start?
- Increasing oil prices
- Increase price of manufactured products
- Rise in interest rates by the European Central Bank
- Increase of unemployment rate
- People were unable to pay for their mortgages
- Bank failures
3. How the governments take part following the event? Were and are they successful attempts?
Great Depression
- Work-creation programs
- Raise tariffs to protect industries within their own countries
- Poured money into public projects
- Were not successful attempts
- It was the World War II that boost up the economy
Current Recession
- Government helped large companies that were at the edge of bankruptcy
- Lower interest rate
- Increase government spending
- Lower taxes (corporation tax)
- were successful
- less unemployment
- economy getting better
4. Internet, Media, televisions, banking, government support, better social programs, better knowledge on how to response to recession
5. The Great Depression and recent recession both decreased the United States’ GDP.
- United States is the core of the world economy
- Less money flow into the economy
- People save more than spend more
6. I think the Great Depression had more of an impact on the world. The Great Depression lasted for around 10 years. Although the recent recession is still happening for 3 years, it is unlikely that it will continue for 7 more years. A ten-year depression would definitely have a greater impact on the world economy than a shorter period of recession. The reason why I think the recent recession will not last longer than 10 years is the world economy is slowly improving as more money flow into the economy. Another reason is that governments are now gaining more knowledge in how to deal with economy recession from past experiences like the Great Depression, the 1997 depression in Asia, and etc. In that case, countries will not make the same mistakes and worsen the situation.
.
http://americanhistory.about.com/od/greatdepression/tp/greatdepression.htm
Sunday, April 10, 2011
Wednesday, April 6, 2011
Factories powering Canada’s economy
http://www.theglobeandmail.com/report-on-business/economy/growth/factories-powering-canadas-economy/article1964616/
Summary
The Canada's economy expanded by 0.5 per cent in January due to the increased in U.S. demand, and mostly the Canadian factories. Part of that was because of a rebound in auto and parts production tied to several temporary factros, which were plant shutdowns and harsh weather. The manufacturing and exporting sectros also contributed to the economic rebound. And the sectors' growth will continuely mostly rely on the U.S. demand. While export growth and business investments are expected to push up the Canada's economy, the strong loonie and the crisis in Japan can also do so, due to the higher commodity prices and production disruptions resulting from the crisis. However, economists believe the supply chain disruptions will short-lived and it will recouped later this year. One area that's likely to get a negative effect will be the Canada's auto industry because of the high gasoline prices. It would hurt the recovery in U.S. auto sales, which directly affect Canada's auto industry since the vast majority of production is still exported to the U.S.
Connection
The article states that the GDP will mostly depends on the demand of the U.S. market, and that is what Chapter 6 talks about. When the demand from the U.S. market increases as economy improves, Canada, which is one of the major importer to the U.S, will definitely benefit from it. And in the long run, it will push up the GDP of Canada. However, since it is still at the stage of recession, people might save more rather to spend more. And this might be hard to reach equilibrium GDP.
Reflection
As the economy recover from the recession, the demand of goods will definitly goes up, which also means the supply from manufactures will also goes up. The earthquake crisis that occured in Japan will bring opportunities to the province of British Columbia. There will be a high demand of wood for construction and rebuilding the city, and since British Columbia's major export is wood, it will definitely benefit the province. However, i think the auto industry is more likely to be contiously affect because of the increasing oil price. And the major reason for that to happen is the riots and revolutions happening in the Middle East and Afirca.
Summary
The Canada's economy expanded by 0.5 per cent in January due to the increased in U.S. demand, and mostly the Canadian factories. Part of that was because of a rebound in auto and parts production tied to several temporary factros, which were plant shutdowns and harsh weather. The manufacturing and exporting sectros also contributed to the economic rebound. And the sectors' growth will continuely mostly rely on the U.S. demand. While export growth and business investments are expected to push up the Canada's economy, the strong loonie and the crisis in Japan can also do so, due to the higher commodity prices and production disruptions resulting from the crisis. However, economists believe the supply chain disruptions will short-lived and it will recouped later this year. One area that's likely to get a negative effect will be the Canada's auto industry because of the high gasoline prices. It would hurt the recovery in U.S. auto sales, which directly affect Canada's auto industry since the vast majority of production is still exported to the U.S.
Connection
The article states that the GDP will mostly depends on the demand of the U.S. market, and that is what Chapter 6 talks about. When the demand from the U.S. market increases as economy improves, Canada, which is one of the major importer to the U.S, will definitely benefit from it. And in the long run, it will push up the GDP of Canada. However, since it is still at the stage of recession, people might save more rather to spend more. And this might be hard to reach equilibrium GDP.
Reflection
As the economy recover from the recession, the demand of goods will definitly goes up, which also means the supply from manufactures will also goes up. The earthquake crisis that occured in Japan will bring opportunities to the province of British Columbia. There will be a high demand of wood for construction and rebuilding the city, and since British Columbia's major export is wood, it will definitely benefit the province. However, i think the auto industry is more likely to be contiously affect because of the increasing oil price. And the major reason for that to happen is the riots and revolutions happening in the Middle East and Afirca.
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