powerhouse, manufacturing labor cost $3.52/hr. India: 6.1 million in college, 200 million fluent in English, service powerhouse, and manufacturing labor cost $0.92/hr. • Review Video case: Japan’s Economic Malaise: What are key problems that Japan faces? Japan has the highest public debt in the world and an aging population. • Economic measure: GDP and GNI (defs) GNI: Gross National Income: the total value of all income generated by the residents of a nation, including both the domestic production of goods and services and income from abroad. GDP: Gross Domestic Product: A measure of an economy’s size based on the market value of goods and services produced within a nation in a year. • Purchasing Power Parity (PPP): what is the main idea of this concept? A means of adjusting the exchange rates for two currencies so the currencies have equivalent purchasing power. • Key Differences between developing and developed countries Developed: Per capita GNI of $12,746 or more. High material standard of living and a substantial middle class. Use of most advanced techniques and equipment. Large base of productive capital, financial markets, and banking systems. Small share of agricultural output and declining share of manufacturing. Well established gov. and legal systems. Relatively low levels of unemployment. High nutrition and access to healthcare. DEVELOPING countries are close to the opposite of developed. • Underground economy (what does it refer to) The part of the nation’s income that, because of un-reporting or underreporting, is not measured by official statistics. Created by higher income tax levels and increased government red tape. • Class slides: Key Differences among the 3 major country groups (which includes emerging markets) - look at population (% of world) Advanced economies 14%, Developing economies 25%, and Emerging markets 61%. • Economic growth rates: Which parts of the world are growing more than others? Developing Asia, China, India, and Sub-Saharan Africa, and ASEAN-5. • Figure 8 (in slides and book): urban population growth (what is the story?) Cities are increasing and urban areas are as well. • Population of the U.S. 324,555,590 • Slide: World’s population under 15 years – where (which geographic) does the majority live Africa 41% • Rural to urban shift (key idea) The movement of a nation’s population from rural areas to cities. • Disposable vs. Discriminatory income (definitions) Disposable: after-tax personal income. Discretionary: the amount of income left after paying taxes and making essential purchases. • Gini Index (key idea) A measure of the degree to which a family income within a country is distributed equally.
Module 8: The International Monetary System and Financial Forces • Slides: Appreciation and Depreciation of currencies (what does it refer to. Expect also 1- 2 application questions on that e.g. A U.S. company has to pay a supplier in Italy in Euros. The Euro depreciates/ appreciates vs. U.S.$ or the Euro appreciates/ depreciates- what does that mean for the U.S. company?) Appreciation: Increase in currency value. Depreciation: Loss in currency value.
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