Question #1.What are the benefits and drawbacks of globalization?
There are many benefits of globalization. First, globalization provides great opportunities to
developing counties and helps these countries to reduce unfair competition in the world.
Avenue Drop Box 11:59 PM Wednesday March 25, 2015
Question#1: (20 marks)
Consider a three-year bond, which entitles the owner of this bond $100
If the interest rate is 10 percent, the present value of bond = 248.69
Econ 2D03 Assignment 2
11:59 PM Wednesday, February 25, 2015
Market equilibrium quantity(QM)60
Total net benefit at the market equilibrium quantity: 1800
Socially optimal quantity (Qs): 100
Total net benefit at the socially optimal qua
What is it?
We call the unbanked those who have no
access to finance.
These people are unable to borrow, save or
participate in anything more than a regional
What are the implications of this?
Where are the issues the biggest
Financial Inclusion 3
is still a lack of financial
services in LDCs particularly in
Banks and microfinance
institutions are the future in
giving access to financial services
Mobile banking will be important
Care about age structure of population for public spending
Want to know the dependency ratio
(Number of over 65 + Number of under 16 (18) Number working age
May care about old age dependency ratio
Aging in Canada not as b
RENT SEEKING 2
DESIRABLE MARKET FAILURES
LAST TIME ON ECON ISSUES
We talked about rent seeking
Trying to have more of the surplus from a market without increasing
the total amount (in many cases decreasing)
May want to:
Implement a new policy
This is something with which you should be familiar
We are going to focus our discussion for today on measuring and
thinking about inequality. We will get statistics and information from
the readings and discuss on Friday
TYPES OF IN
WHAT IS RENT SEEKING
Rent seeking is the attempt to manipulate a
market to extract extra value (economic
rents) for yourself without any contribution of
If I produce a loaf of bread and sell it, I am
simply an economic actor
If I pet
FINANCIAL INCLUSION 2: ECONOMIC THEORY
So far you have been concerned with the what of GDP, the accounting, or the description
Now we will concern ourselves with the why of GDP
THE WHAT OF GDP
The what of GDP Is the accounting, C+I+G
Monopsony and the minimum wage
Traditional model of
frictionless labor market
Employers are the demand side
Employees are the supply side
chooses a reservation
wage and this becomes their supply
Firms are willing to pay the
Intergenerational Income Mobility
Income inequality deals with inequality of
What did we learn?
Canadas after tax Gini index approx. 0.33
Ranks 12th out of 17
Remember the problems with t
Rent Seeking: Readings
From last weeks optional reading:
Business could let the patent run out, or
could spend a lot of money lobbying
Congress to get an extension of your
Weve seen rent seeking A LOT
AARP a major lobby in the USA
John Maynard Keynes
John Maynard Keynes was a British economist best known for
spearheading the revolution in economic thinking. His major
contribution to the world of economics is the Keynesian theory of
Economic growth, which raised living standards and improved nutrition.
Public health and related initiatives, especially in the period from about 1870 to 1940.
Modern medicine in the period from 1940 to present.
a) Briefly explain economic and social determinants of economic growth.
5 Human capital
6 Market structures
7 Openness and policies affecting.
b) Briefly explain the reasons
Avenue Drop Box 11:59 PM Wednesday January 28, 2015
Question #1: (60 marks)
Consider a perfectly competitive economy with the following demand and supply
functions of good X.
P = 100 Q
P = 20 + Q
In the ab