https://padlet.com/SSMsSha/S21 E-Learning Activity: To complete these activities within a week commencing from Term 2 Week 4. Deadline to post answers is 21 April 2016. en-us 2016-04-18 21:16:52 UTC 2026-01-23 22:41:54 UTC hello@padlet.com https://padlet-assets.storage.googleapis.com/portrait/pocketwatch.jpg SSMsSha https://padlet.com/SSMsSha/S21/wish/106416810 Before commencing the activities (Task 1 to 4 below) spend 3 minutes to think of this question:

You may have some initial ideas about Eurozone economy. In just a few sentences, I want you to write what it is that you used to think about Eurozone economy. Take a minute to think back and then post your response in the following format:

“ I used to think that Europe is ..........................

Each of you must post your response in the space below this box.]]> 2016-04-04 14:51:44 UTC https://padlet.com/SSMsSha/S21/wish/106416810 michelle_wong_nga_hui https://padlet.com/SSMsSha/S21/wish/106416811 2016-04-15 00:48:49 UTC https://padlet.com/SSMsSha/S21/wish/106416811 SSMsSha https://padlet.com/SSMsSha/S21/wish/106416812 As an economic advisor (group leader), your role is to recommend and justify whether the use of policies have been effective in tackling recent macroeconomic problems faced by your country. Your job is to discuss with a panel of ministers (your team members) to do research and to propose solutions (policies) to solve these problems. Thereafter, you need to evaluate if the use of these policies  are effective or appropriate for your country.]]> 2016-04-04 13:39:06 UTC https://padlet.com/SSMsSha/S21/wish/106416812 SSMsSha https://padlet.com/SSMsSha/S21/wish/106416813 You may wish to use specific judging criteria to assess the suitability of these policies.]]> 2016-04-04 14:46:56 UTC https://padlet.com/SSMsSha/S21/wish/106416813 SSMsSha https://padlet.com/SSMsSha/S21/wish/106416814 Videoclip on the Eurozone Economy]]> 2016-04-04 15:59:28 UTC https://padlet.com/SSMsSha/S21/wish/106416814 SSMsSha https://padlet.com/SSMsSha/S21/wish/106416815 Video Clip on Eurozone economy: Italy]]> 2016-04-04 14:21:35 UTC https://padlet.com/SSMsSha/S21/wish/106416815 SSMsSha https://padlet.com/SSMsSha/S21/wish/106416816 2016-04-04 14:30:33 UTC https://padlet.com/SSMsSha/S21/wish/106416816 SSMsSha https://padlet.com/SSMsSha/S21/wish/106416817 2016-04-04 15:46:22 UTC https://padlet.com/SSMsSha/S21/wish/106416817 SSMsSha https://padlet.com/SSMsSha/S21/wish/106416818 Please write your response here, or you may just add new post. Use economic analysis (for example ADAS analysis) in your answers where possible.]]> 2016-04-04 14:27:05 UTC https://padlet.com/SSMsSha/S21/wish/106416818 SSMsSha https://padlet.com/SSMsSha/S21/wish/106416819 For example, is it a small and open economy? Is it a large economy? Is the economy an export-driven economy? Is it undergoing any structural changes? Please upload the links here too.]]> 2016-04-04 14:37:37 UTC https://padlet.com/SSMsSha/S21/wish/106416819 SSMsSha https://padlet.com/SSMsSha/S21/wish/106416820 Explain and evaluate the use of 3 policies]]> 2016-04-04 14:45:26 UTC https://padlet.com/SSMsSha/S21/wish/106416820 SSMsSha https://padlet.com/SSMsSha/S21/wish/106416821 2016-04-04 14:58:49 UTC https://padlet.com/SSMsSha/S21/wish/106416821 SSMsSha https://padlet.com/SSMsSha/S21/wish/106416822 Now, I want you to think about how your ideas about Europe's economy has changed as a result of what your team has been discussing whilst completing the task above. Again in just a few sentences write down what you now think about  Europe's economy. Start your sentences with, 


“But now, I think…”

Each of you must post your response in the space below this box.]]> 2016-04-04 14:59:32 UTC https://padlet.com/SSMsSha/S21/wish/106416822 SSMsSha https://padlet.com/SSMsSha/S21/wish/106416823 2016-04-04 15:02:56 UTC https://padlet.com/SSMsSha/S21/wish/106416823 SSMsSha https://padlet.com/SSMsSha/S21/wish/106416824 2016-04-04 15:04:09 UTC https://padlet.com/SSMsSha/S21/wish/106416824 SSMsSha https://padlet.com/SSMsSha/S21/wish/106416825 2016-04-04 15:04:45 UTC https://padlet.com/SSMsSha/S21/wish/106416825 lee_lin_cun_darryl_2015 https://padlet.com/SSMsSha/S21/wish/107135689 I used to think Europe is an economy that is very well sustained and experiencing economic growth]]> 2016-04-22 00:53:47 UTC https://padlet.com/SSMsSha/S21/wish/107135689 lee_lin_cun_darryl_2015 https://padlet.com/SSMsSha/S21/wish/107137271 -Poor consumer expectations about the future -> less consumption, fall in C. 
-There will also be increased savings
-Increase in unemployment rate in Italy and Spain - 40%
-Low inflation rate of 0.3%
-An increase in C will result in a fall in AD, multiplier effect triggered thus euro falls to an even worse recession]]> 2016-04-22 01:10:35 UTC https://padlet.com/SSMsSha/S21/wish/107137271 https://padlet.com/SSMsSha/S21/wish/107171343 Wei Yang]]> 2016-04-22 07:29:11 UTC https://padlet.com/SSMsSha/S21/wish/107171343 https://padlet.com/SSMsSha/S21/wish/107176501 Europe is edging towards stagflation and deflation. Debt burdens increases throughout, significantly in Italy and Greece. Thus, investors have poor economic outlook and confidence in Europe's economy hence decreasing investment.]]> 2016-04-22 08:03:18 UTC https://padlet.com/SSMsSha/S21/wish/107176501 https://padlet.com/SSMsSha/S21/wish/107177052 Europe is a very large economy, ranked third only after China and United States. Europe has a thriving manufacturing sector. However, because of higher wages and costs of productions, Europe is suffering from deindustrialisation and off-shoring in the labour intensive manufacturing sectors. This means that manufacturing has become less important and that jobs are moved to regions with cheaper labour costs such as China.]]> 2016-04-22 08:09:12 UTC https://padlet.com/SSMsSha/S21/wish/107177052 https://padlet.com/SSMsSha/S21/wish/107177795 Wei Yang]]> 2016-04-22 08:16:54 UTC https://padlet.com/SSMsSha/S21/wish/107177795 lee_lin_cun_darryl_2015 https://padlet.com/SSMsSha/S21/wish/107234744 But now, I think that euro will continue to fall into recession unless they do something significant about it. ]]> 2016-04-22 14:05:03 UTC https://padlet.com/SSMsSha/S21/wish/107234744 https://padlet.com/SSMsSha/S21/wish/107351678 Marcus: I used to think that Europe had one of the largest economy in the World and had been experiencing stable and sustained economic growth.]]> 2016-04-23 11:04:02 UTC https://padlet.com/SSMsSha/S21/wish/107351678 https://padlet.com/SSMsSha/S21/wish/107352294 High unemployment rates in countries like Italy and Spain (40%). There is a need for the use of Expansionary Fiscal Policy.
Exp FP: 
Increase in G, decrease in T, in order to increase AD leading to an increase in employment rates.
(G) Increase in in G will immediately raise AD also stimulates C which in turn raises AD. 
(T) Lower income taxes for households- households have higher disposable income-higher pp. consumer spending rises, firms hire more workers to increase production. experiencing higher profits- AD increases. Lower corporate taxes for firms- improves profitability of investments-stimulate FDI. I increases, AD increase. 
Combined effect increases AD, and give rise to multiple expansions of NY and UNempt

]]> 2016-04-23 11:26:30 UTC https://padlet.com/SSMsSha/S21/wish/107352294 https://padlet.com/SSMsSha/S21/wish/107352658 Europe's economic situation will continue to worsen and will be difficult to improve due to the slowdown of the economy of other developing countries. Hence, Europe needs to implement policies to boost economic growth. ]]> 2016-04-23 11:43:11 UTC https://padlet.com/SSMsSha/S21/wish/107352658 https://padlet.com/SSMsSha/S21/wish/107352724 2016-04-23 11:46:09 UTC https://padlet.com/SSMsSha/S21/wish/107352724 https://padlet.com/SSMsSha/S21/wish/107353074 i used to think that europe is a major trading partner of Asia and US and makes up majority of the world's economy.
haoyang]]> 2016-04-23 11:57:35 UTC https://padlet.com/SSMsSha/S21/wish/107353074 https://padlet.com/SSMsSha/S21/wish/107353249 -Expansionary FP is effective as: europe experiences increasing unemployment. spending more on current expenditure such as wages of civil workers improves employment. at the same time spending more on unemployment benefits allows the increasingly unemployed locals to have the ability to purchase and add on to the C component of the europe economy. AD would increase, iPONY, multiplier effect, multiple increases in the europe's economy, expansionary effects, curb europe recession
-Expansionary FP is not effective as: an increase in C would lead to a fall in AD, since there is high propensity to import and an increase in purchasing power would lead to increased consumer expenditure on imports, thereby worsening the CA account of europe and hence worsening europe's recession problem. high propensity to save too. leakage in the economy and hence AD is not able to increase to its fullest extent from expansionary FP

haoyang]]> 2016-04-23 12:02:18 UTC https://padlet.com/SSMsSha/S21/wish/107353249 kan_jiaying_desiree_2015 https://padlet.com/SSMsSha/S21/wish/107354408 -Devaluation is the deliberate lowering of the currency's exchange rate.
- As the Exchange Rate is deliberately weakened, exports become relatively cheaper in foreign currency and imports become relatively more expensive. Assuming demand for exports and imports are price elastic and there is a high degree of substitutability between European goods and foreign goods, quantity demanded for european exports will increase more than proportionately while imports will experience a more than proportionate fall.
-A higher export revenue and lower import expenditure will increase the value of net exports (NX), increasing AD, ceteris paribus.
- A weak Euro will result in an increase in net exports and improvement in trade balance as long as marshall-lerner condition holds where the sum of price elasticities of demand for exports and imports > 1.
-Net export revenue (X-M) increases, improving current account balance and thereby reducing the balance of payment deficit, assuming ceteris paribus

desiree

]]> 2016-04-23 12:43:46 UTC https://padlet.com/SSMsSha/S21/wish/107354408 kan_jiaying_desiree_2015 https://padlet.com/SSMsSha/S21/wish/107357699 Devaluation of Currency is not effective: If demand of exports and imports are price elastic, devaluation will result in a less than proportionate increase in the quantity demand fro exports and a less than proportionate increase in the quantity demanded of imports. This will decrease export revenue and increase import expenditure respectively. Devaluation will thus be ineffective in correcting a balance of payment deficit and it may even worsen the balance of payment deficit.]]> 2016-04-23 14:21:22 UTC https://padlet.com/SSMsSha/S21/wish/107357699 kan_jiaying_desiree_2015 https://padlet.com/SSMsSha/S21/wish/107359255 I used to think that europe was facing a recession due to the debt crisis and negative economic growth. 
desiree]]> 2016-04-23 14:58:19 UTC https://padlet.com/SSMsSha/S21/wish/107359255 https://padlet.com/SSMsSha/S21/wish/107396967 the cause of europe's recession is high marginal propensity to save and import, poor consumer confidence of the future economy and increasing structural unemployment. 

-the usage of expansionary fiscal policy should be focused on increasing government expenditure, especially on areas such as infrastructure and subsidizing the cost of training and upgrading the skills of Europe's workers and reducing corporate tax only. This would encourage entrepreneurs to set up new firms that can make Europe relevant in the evolving international economy. In addition, Europe's AD would shift right due to increase in G and I, hence resolving Europe's recession. When G increase is due to expenditure on developmental infrastructure, training workers and R&D, coupled with an increase in I, the LRAS would increase and hence curb stagflation. This would also resolve Europe's structural unemployment since workers undergo retraining and skills upgrade. Also, when the Europeans see that the government is spending more on developmental infrastructure and workers are becoming more relevant due to retraining, they would become more optimistic about the future of Europe's economy and hence save less. Thus, MPS would decrease and the multiplier effect on the economy due to increases in G and I would take place to a much fuller extent.

-the usage of expansionary monetary policy should be focused on devaluing the Euro rather than reducing interest rates. Since the PED of M is inelastic and PED of X is elastic, by devaluing the Euro, there would be a more than proportional increase in QD for X and a less than proportional decrease in QD for M. Net value of exports would increase nonetheless and hence AD would increase, resolving Europe's recession. Europe is facing a problem of high MPM as Europeans are 'addicted to all things foreign'. Thus, if interest rates were to fall, the Europeans would only spend more on foreign big ticket items such as foreign cars. There would be a leakage in the Europe's economy and multiplier would not take place to the fullest potential. Hence, expansionary MP should focus on the ER of Europe.

-the usage of supply side policy would ensure that European workers remain relevant in the economy by training workers to operate capital goods and hence turning the economy into capital intensive industry. As workers see that they would not stay out of jobs for long, they would not save as much as before. The usage of market oriented supply side policy would ensure that local firms produce most efficiently and pass the lower cost of production to consumers in the form of lower prices. This would help reduce the fluctuations in the general price levels of Europe's economy and hence investors are able to better predict the future of Europe's economy and thus invest more into Europe's economy. In addition, more competition forces the Europe economy towards certain industries as entrepreneurs have to set up a firm in an industry which has a stable demand for, allowing new firms to compete with each other without fear of the industry closing down. Workers would be hired into these more relevant industries. Workers without the necessary skills can train themselves to specialize in these industries with the help of the government subsidy on skills training. Hence, workers would remain relevant and structural unemployment would be reduced. Hence they would spend more as they are certain of their employability, assuming the income elasticity of demand for M is inelastic, therefore increasing C while improving consumer expectation of future economy. In addition, with 2 expansionary policies in place, it is highly possible that the economy overheats and cause inflation. This can be resolved when ss side policy is in play. This increases the maximum productive capacity of the economy while removing any supply bottlenecks, thereby making it easier for the economy to meet up with the rising demand for goods due to greater purchasing power from higher disposable income levels. When investors see that general price levels would stabilise in the future due to reducing supply bottlenecks, their mindset of Europe having a poor economy would change and hence they would invest more.

-since Europe's recession is caused by multiple reasons, it is wise to implement a cocktail of policies to ensure that each policy complement each other and covers up what the other lacks in. Hence, with multiple policies in place, Europe would be able to get out of her recession and resolve her other economic problems.]]> 2016-04-24 13:12:04 UTC https://padlet.com/SSMsSha/S21/wish/107396967 https://padlet.com/SSMsSha/S21/wish/107399407 I used to think that countries in Europe had stable economies and that they were mostly better off than the United States in terms of their national debts. I also thought that they were enjoying sustained economic growth and very stable prices throughout the continent.

- Dexter]]> 2016-04-24 14:05:01 UTC https://padlet.com/SSMsSha/S21/wish/107399407 https://padlet.com/SSMsSha/S21/wish/107399467 - Interventionist policies such as increasing government expenditure on education, training, and healthcare

- Government spending on education and training improves workers' skills and their stock of human capital (the knowledge and skills acquired by a worker through education and experience used to produce goods and services)

- A well educated workforce also acts as an attraction for foreign investment in the economy. This will  improve the economic outlook and confidence in Europe's economy thus increasing investment

- A healthy workforce also reduces loss in work days due to medical leave and improves productivity

- All these act to to expand productive capacity in the long run so as to stimulate economic growth and maintain price stability ]]> 2016-04-24 14:06:15 UTC https://padlet.com/SSMsSha/S21/wish/107399467