Stand-up comedy in the middle east via youtube Article

Stand-up comedy in the middle east via youtube - Article Example New comedy performers with a different approach overrun 1960s and 70s. The new comedy was subversive, with a strong message. Comedy in those years used political and topical content to raise social questions, opinions and change the publics thinking. A 27-year-old Saudi comedian and a YouTube personality Fahad Al-Butairi, who was the first Saudi stand-up comedian to appear on stage professionally, started a YouTube channel that got so famous with many Arabs describing him as Seinfeld of Saudi Arabia. Al-Butairi started his comedy career when he was in middle school and used to perform in theater plays and in summer camps and centers in Saudi Arabia and other areas. In 2006, while studying in the US, Fahad Al-Butairi decided to try out at an open mike nights at the local comedy club in Austin where he was living basing his jokes on his personal experience, this was a success. When Fahad Al-Butairi moved back to the Saudi Arabia and got busy with his job, he heard about a comedy event in Bahrain where he performed in front of 2,000 people, this was also an instant success. The YouTube show, which he started on 2010, became his main claim to fame. It is called it â€Å"La Ykthar,† which is Arabic for â€Å"Shut up and don’t overdo it.† The show discusses Saudi Arabia’s social and political topics. It has grown in popularity with each monthly episode. Statistics show that, Al-Butairi now has over 909,000 followers on Twitter, over 488,893 subscribers on YouTube and his videos have reached 62,293,268 views. Dignitary Obeidallah, a New Jersey-conceived, Palestinian-American humorist, studies the crowd before him at Al Hussein Cultural Center. For this opening night at the first-ever Amman Stand Up Comedy Festival, Obeidallah the ever busy standup comedian is scheduled to perform a set. The entertainment events will be no different from on any other night, but tonight’s show marks the first ever comedy

Robert E. Lee Essay Example | Topics and Well Written Essays - 2250 words - 1

Robert E. Lee - Essay Example Robert Edward Lee was one of the most beloved generals of the Civil War and possibly of all American history. To the men he led he was a hero, and even after his death he was still loved by all his former troops. He was a man who put everybody above himself. Robert E. Lee was born in Stratford, Virginia; the date was January 19, 1807. His father, Henry Lee, was well recognized with Washingtons army as Lighthorse Harry as well as it was a fame that rested not just on his cavalry exploits but upon his wonderful strategic and tactical ability. An important portion of his fame was attributed to him for beating off surprising British assault at Spread Eagle Tavern in January, 1778. On the evening of September 28, 1870, Lee became ill and was unable to speak coherently. He had suffered from a stroke that damaged the frontal lobes of the brain, which made speech impossible. Two weeks after lee got the stroke he took his breath on October 12, 1870. He was buried under the Lee Chapel which is located in Washington. Robert enrolled in the U.S. Military Academy in 1825 he wanted a successful career in the military. He in a class of 46 of cadets he ranked second. Immediately after graduation, at the age of 21 he was commissioned as a second lieutenant in the Engineering Corps. On the occurrence of the Mexican War, in the year 1846, Lee was appointed to General Winfield Scotts private staff (William & Robert 1992) He went a head to Brazos on the sixteenth of January, 1847. The General was deep in planning for the combat at Vera Cruz. This was going to be Lees first experience under real fire. Due to his brilliant leadership and expertise in strategy, he won the honor of General Scott. Scott called Lee the best military mastermind in America, and the greatest soldier he ever laid eyes on in the field. Lee was there to see the admit defeat to the Mexicans on the 29th of March. He survived a lot of encounters by the enemy in the war

motivational and emotional factors help you to understand your own health and fitness Essay Example for Free

motivational and emotional factors help you to understand your own health and fitness Essay What were the motivational and environmental factors that contributed to the weight gain? The motivational factor that I belive Tasha had was prioritizing her children over her own health and the enviromental was that she had two children both at a hard age that needed her all the time witch took all the time, energy and focus. Briefly describe which approaches to motivation you feel best help us to understand the change in Tasha’s behavior. the best motivational aproach that I thought helped me understand it better was intrinsic motivation witch according to our textbook is â€Å"based on the personal satisfaction the person gets from doing the task† (Lefrancois, 2011) I choosed this because she was was being motivated by her mood and the way she feels about herself. In what ways was emotion tied to the weight gain and loss? Being tired and preocupied accounts for her weight gain and being unhappy with her weight and her mood motivated the loss. How might understanding these motivational and emotional factors help you to understand your own health and fitness? When I started reading this, I though I was reading about myself, this story has a lot to do with me. When I had my second child I gain 40 pounds I felt fat and everyone was telling me that I gain weight and I felt more discusted with myself, I hated my body and I was very unhappy with it. So one day I saw a friend of mine on facebook she had posted a picture of how she lost 30 pounds in 2 months and that got to me and I asked her how she did it and she put me in touch with the trainner that helped her. I got myself a personal trainner and started taking this product call YOR HEALTH and that has helped me loose 45 pounds and now I’m proud to say that I have the body I always dreamed of having and they want me as a model for a fitness magazine in witch im still debating because that is not my thing. By understanding these emotinal and motvational factors has helped me realize that what I did and been doing I did it all correctly. Will you change anything in your own life as a result of this scenario? I have to say as of right now I wouldn’t change anything because its something I’m doing now. Reference: R. Lefrancois (2011 ). Psychology: The human puzzle. San Diego, Bridgepoint Education, Inc retrieved from https://content.ashford.edu/books/AUPSY101.11.1/sections/sec6.4 * Select one character, past or present, from a television show, movie, book, comic, game, etc. * * Briefly describe this character, including: * * What medium (television, movie, book, etc.) is he or she from? * * Why did you select him or her? * * What is his or her personality as depicted? * * Identify one approach (e.g., common-sense, psychodynamic, humanistic, etc.) that you feel is most accurate and useful in understanding this character’s personality. * Discuss this selected theory. Why did you select it? How might this theory help us understand your character’s personality? I had a similar assigment in another class and I absolutly loved it because I got the chance to talk about my favorite character person and I absolutley love this lady her name is Madea known as Tyler Perry. She has been in manny movies all of of them has a been a great success. My favorite out of all her movies is â€Å"Witness Protection† in this movie she played a role of protecting a family that had to be under witness protection until a case was resolved in court. This family was not one of the best family not a close family but once they got to Madea’s house she made sure she tought them how to live with eachother as a family and tought them the real meaning and  importance of having a family there for you. I selected this character because in her movies she has inspired me and show me and everyone who watches her movie that no matter what family values is very important. One aprache that I choosed for her character is humanistics aproach because she would make sure you understand her world and where shes coming from for her to be able to get on you page. She has to get her point across and has to make sure everyone understands and follows what she says in a easy or a hard way just like out text boo stated â€Å"The self; worth, dignity, individuality† (Lefrancois, 2011) and â€Å"My perception of the world is real. So is yours. We have our separate realities. If we are to understand each other, you must try to understand my world, and I yours† (Lefrancois, 2011) I chosed this personality beucase and that is exactly how Madea is when shes trying to get a point across. She has all o those traits in her pesonality she shows her self her dignity and her individuality. If anybody in class has watch her movies can tell you how her personality is in manny ways I wished I had her same personality. Reference: R. Lefrancois (2011 ). Psychology: The human puzzle. San Diego, Bridgepoint Education, Inc retrieved from https://content.ashford.edu/books/AUPSY101.11.1/sections/sec8.2 R. Lefrancois (2011 ). Psychology: The human puzzle. San Diego, Bridgepoint Education, Inc retrieved from https://content.ashford.edu/books/AUPSY101.11.1/sections/sec8.7 Spet 14

Application of Developmental Theories to Education

Application of Developmental Theories to Education Part 1. Purpose My classroom will be a place of respect. It will provide an inclusive and safe environment  that will encourage students to learn. Students are to play an active role in their learning and are  also expected to respect each other and the teacher. Our classroom will foster positive interactions with safe and open communication between students and teachers alike. All individuals shall be respected and respectful of the differences of others. Our classroom will become a community of learners encouraging one anothers personal and academic success. In our classroom we will obey all the rules, be respectful, be organized, and create a safe and positive learning environment. All students will do their best and be successful in all they do. Part 2. The Learner Age and Developmental Characteristics Infants and Toddlers Social Physical Cognitive Emotional Attachment: baby  settles when parent  comforts; toddler  seeks comfort from  parent, safe-base  exploration  5 mo: responsive to  social stimuli; facial  expressions of  emotion 9 mo: socially  interactive; plays  games (pattycake) with caretakers   11 mo: stranger  anxiety; separation  anxiety; solitary play 2 yr: imitation, parallel and symbolic, play Newborn: rough, random, uncoordinated,  reflexive movement   3 mo: head at 90 degree angle, uses arms to  prop; visually track  through midline 5 mo: purposeful grasp; roll over; head lag disappears; reaches for objects; transfer objects  from hand to hand;  plays with feet;  exercises body by  stretching, moving;  touch genitals, rock on stomach for pleasure 7 mo: sits in tripod; push head and torso up off the floor; support weight on legs; raking with hands 9 mo: gets to and from sitting; crawls, pulls to standing; stooping and recovering; fingerthumb  opposition; eyehand  coordination, but  no hand preference 12 mo: walking 15 mo: more complex  motor skills 2 yrs: learns to climb up stairs first, then down Sensori-motor: physically explores environment to learn about it; repeats movements to master them, which also stimulates brain cell development 4-5 mo: coos, curious and interested in environment 6 mo: babbles and imitates sounds 9 mo: discriminates between parents and others; trial and error problem solving 12 mo: beginning of symbolic thinking; points to pictures in books in response to verbal cue; object permanence; some may use single words; receptive language more advanced than expressive language 15 mo: learns through imitating complex behaviors; knows objects are used for specific purposes 2 yrs: 2 word phrases; uses more complex toys and understands sequence of putting toys, puzzles together Birth-1 yr: learns fundamental trust in self, caretakers, environment 1-3 yr: mastery of body and rudimentary mastery of environment (can get others to take care of him) 12-18 mo: terrible twos may begin; willful, stubborn, tantrums 18-36 mo: feel pride when they are good and embarrassment when they are bad 18-36 mo: Can recognize distress in others beginning of empathy 18-36 mo: are emotionally attached to toys or objects for security Preschool Social Physical Cognitive Emotional Birth-1 yr: learns fundamental trust  in self, caretakers, environment 1-3 yr: mastery of body and  rudimentary mastery of environment (can get others to  take care of him) 12-18 mo: terrible twos may begin; willful, stubborn, tantrums 18-36 mo: feel pride when they are good and embarrassment when they are bad Can recognize distress in others beginning of empathy Are emotionally  attached to toys or objects for  security Physically active Rule of Three: 3 yrs, 3 ft, 33 lbs. Weight gain: 4-5 lbs per year Growth: 3-4 inches per year Physically active, cant sit still for long Clumsy throwing balls Refines complex skills: hopping, jumping, climbing, running, ride big wheels and tricycles Improving fine motor skills and eye-hand coordination: cut with scissors, draw shapes 3- 3  ½ yr: most toilet trained Ego-centric, illogical, magical thinking Explosion of vocabulary; learning syntax, grammar; understood by 75% of people by age 3 Poor understanding of time, value, sequence of events Vivid imaginations; some difficulty separating fantasy from reality Accurate memory, but more suggestible than older children Primitive drawing, cant represent themselves in drawing till age 4 Dont realize others have different perspective Leave out important facts May misinterpret visual cues of emotions Receptive language better than expressive till age 4 Self-esteem based on what others tell him or her Increasing ability to control emotions; less emotional outbursts Increased frustration tolerance Better delay gratification Rudimentary sense of self Understands concepts of right and wrong Self-esteem reflects opinions of significant others Curious Self-directed in many activities School Aged Social Physical Cognitive Emotional Friendships are situation specific Understands concepts of right and wrong Rules relied upon to guide behavior and play, and provide child with structure and security 5-6 yr: believe rules can be changed 7-8 yrs: strict adherence to rules 9-10 yrs: rules can be negotiated Begin understanding social roles; regards them as inflexible; can adapt behavior to fit different situations; practices social roles Takes on more responsibilities at home Less fantasy play, more team sports, board games Morality: avoid punishment; self interested exchanges Self-esteem based on what others tell him or her Increasing ability to control emotions; less emotional outbursts Increased frustration tolerance Better delay gratification Rudimentary sense of self Understands concepts of right and wrong Self-esteem reflects opinions of significant others Curious Self-directed in many activities Use language as a communication tool Perspective taking: 5-8 yr: can recognize others perspectives, cant assume the role of the other 8-10 yr: recognize difference between behavior and intent; age 10-11 yr: can accurately recognize and consider others viewpoints Concrete operations: Accurate perception of events; rational, logical thought; concrete thinking; reflect upon self and attributes; understands concepts of space, time, dimension Can remember events from months, or years earlier More effective coping skills Understands how his behavior affects others Self esteem based on ability to perform and produce Alternative strategies for dealing with frustration and expressing emotions Sensitive to others opinions about themselves 6-9 yr: have questions about pregnancy, intercourse, sexual swearing, look for nude pictures in books,magazines 10-12 yr: games with peeing, sexual activity (truth/dare, boy-girl relationships, flirting, some kissing, stroking/rubbing, re-enacting intercourse with clothes on) Social Physical Cognitive Emotional Young (12 14): psychologically distance self from parents; identify with peer group; social status largely related to group membership; social acceptance depends on conformity to observable traits or roles; need to be independent from all adults; ambivalent about sexual relationships, sexual behavior is exploratory Middle (15 17): friendships based on loyalty, understanding, trust; self-revelation is first step towards intimacy; conscious choices about adults to trust; respect honesty straightforwardness from adults; may become sexually active Morality: golden rule; conformity with law is necessary for good of society Growth spurt: Girls: 11-14 yrs Boys: 13-17 yrs Puberty: Girls: 11-14 yrs Boys: 12-15 yrs Youth acclimate to changes in body Formal operations: precursors in early adolescence, more developed in middle and late adolescence, as follows: Think hypothetically: calculate consequences of thoughts and actions without experiencing them; consider a number of possibilities and plan behavior accordingly Think logically: identify and reject hypotheses or possible outcomes based on logic Think hypothetically, abstractly, logically Think about thought: leads to introspection and self-analysis Insight, perspective taking: understand and consider others perspectives, and perspectives of social systems Systematic problem solving: can attack a problem, consider multiple solutions, plan a course of action Cognitive development is uneven, and impacted by emotionality Psycho-social task is identity formation Young adolescents (12-14): self-conscious about physical appearance and early or late development; body image rarely objective, negatively affected by physical and sexual abuse; emotionally labile; may over-react to parental questions or criticisms; engage in activities for intense emotional experience; risky behavior; blatant rejections of parental standards; rely on peer group for support Middle adolescents (15-17): examination of others values, beliefs; forms identity by organizing perceptions of ones attitudes, behaviors, values into coherent whole; identity includes positive self image comprised of cognitive and affective components Additional struggles with identity formation include minority or biracial status, being an adopted child, gay/lesbian identity Diversity In every classroom there will be all types of diversities. A few examples of different types of diversity are: students come from all different racial, ethical, and religious backgrounds. As a teacher it is our job to treat every student equally no matter what kind of background they come from. Some students in our classroom may be originally from a different country and may not speak English; but we have to make accommodations to make sure this child can learn and succeed. In our classrooms we will also have students with different learning disabilities. We have to these into consideration when we plan our lesson making sure we make modifications to help ensure the childs needs are being met. Through out the textbook Comprehensive Classroom Management Creating Communities of Support and Solving Problems, the authors Vern and Louise Jones gathered reasearch and wrote about diversity in the classroom in several chapters. Here is the important information that I found that will assist in having a well managed classroom with a diverse student body. When teachers begin a new school year it is important to get to know who the students are. It is important to get an understanding of their background so a teacher can apply this knowledge to their classroom management. The textbook has a quote from Shevalier and McKenzies (2012) review on culturally responsive teaching that shares where classroom management arose from. It quotes classroom management arose from a family-like community defined by a shared vocabulary, with all responsible to one another to do the right thing. By communicating with the students and their families the teacher learns what is and is not accepted or taught at home. Learning what is accepted in their culture will guide the teacher in how to apply the lesson to the class. Students that move to the United States may have different interpretations of gestures and words and it is important for teachers to know this so no students are offended or class is disrupted. Another important area of a students background is where they live. Being aware of students home life and if they live in poverty areas helps the teachers learn to establish a postitive learning environment. The textbook discusses the article A Framework for Culturally Responsive Teaching written by Raymond Wlodkowski and Margery Ginsberg. (1995) It discusses in poverty areas a learning environment has to emphasize intrinsic motivation. The atmosphere that is created has students and teachers respecting each other, making what is taught relavent to the students, having creative learning experiences that include students input, and making students feel that they are effective in learning something they value. Where students live and what cultures they come from are not the only things that cover classroom diversity. Under the Individuals with Disabilities Education Act (IDEA) teachers are to include students with Kathleen Slamka 3 both physical and learning disablities in the general education classroom. Working with in their IEP team it is important for teachers to make these students feel they are competent to participate in class. They need to be treated the same as the other students and to be an effective teacher you need to consider this and work it into your lesson plans. When becoming a teacher it is important for teachers not to just learn how to teach but understand who they are teaching. Classroom diversity is an important part of good classroom mangement. When a teacher goes that extra mile to become involved in students life then the students will succeed under their care Motivation and High Expectations Causes of Low Motivation in Students Pressure Some students respond negatively to pressure and avoid participation because of fear of failure. They appear not to care but are using this to cover their anxiety. Low Classroom Expectations Teachers having poor attitudes and does not focus on students needs and mutual respect. Lack Of Home Support- Parents are less invloved in the students learning and show a lack of importance toward education. Low income parents- Parents are working more and not home enough to meet childs personal and emotional needs. Parents may not make much therefore students are left with little food and clothes that are worn out or outgrown. Low Self Esteem Students- have low self image and see themselves not capable and tasks to hard for them. They avoid doing tasks for fear. According to our textbook (2016), one of the main components of creating high motivation and expectations is creating a safe, calm, and healthy classroom environment. If students feel like they are safe and cared for, they more than likely will do their best. Students can come from all different backgrounds and home lives and it is our job as teachers to take that worry away from them and make them feel safe and loved at school. Another component is making students feel like they can accomplish anything they set their minds to. Some things that organize our thinking about motivation are: Intrinsic Value, which is a students interest or enjoyment with engaging in a task; Attainment Value, which is when a student feels like they can achieve or accomplish a task; and Utility Value, which is when the students feel like what they are learning and doing will benefit their career one day. Teachers feel that student dont see the value in learning the curriculums taught in the classroom. As teachers, we have to create a learning environment that establishes inclusion, develops attitude, enhances meaning, and engenders competence. We have to create a classroom environment where everyone feels respected and valued including the teachers and students; we have to try our best to create a favorable disposition for learning through their personal relevance, we have to create learning that is challenging, and we need to make students feel like they are learning about something they value. Finally, students that are low motivators need help understanding the value of their learning goals, understand the learning process, be involved in the process, have goals, experience success, self-evaluate, receive appropriate rewards, and experience a safe and well-organized learning environment. Academic Learning Goals Teachers responsibility regarding safety Creating a safe classroom environment is one of the key factors for a successful classroom, and it is very important for the students. A lot of classroom problems can be prevented by creating a safe and positive environment for the students. Research has indicated that when students perceive their relationships with their teachers and peers to be positive and supportive their motivation and positive behavior increases dramatically. Students academics will be enhanced when the teacher takes time to respond to the students psychological and personal needs. Creating a safe environment for students will benefit their social, mental, physical, and spiritual needs. A student will always remember a teacher who took the time to get to know them and cared about them. Alabama Educator Code of Ethics Important Laws for Teachers Bullying Laws Alabama has anti-bullying laws and policies. The Student Harassment Prevention Act was signed by Bob Riley on May 29, 2009. Cyberbullying is included in these laws. According to Alabamas Student Harassment Prevention Act says that research confirms that victims of school bullying and harassment suffer detrimental psychological problems that could lead to suicide, behavioral problems, and lower levels of academic achievement. As teachers it is our job to make sure our students are not being bullied, and if we see bullying to take certain protocols to resolve the bullying. No student shall engage in or be sujected to harassment, violence, threats of violence, or intimidation by any other student that is based on any of the specific characteristics that have been identified by the board in this policy. Students who violate this policy will be suject to disciplinary sanctions. IDEA IDEA is the Individuals with Disablities Education Act. This act ensures services for students with disabilities. They provide special education and intervention to students who need the help. IDEA is a law ensuring services to children with disabilities throughout the nation. IDEA governs how states and public agencies provide early intervention, special education and related services to more than 6.5 million eligible infants, toddlers, children and youth with disabilities Due Process According to myaea Students first Act was adopted by the legislature during the 2011 regular session. This act imposed a new tenure system and education support professionals in Alabama.Teachers have the right to hear and contest charges that are placed against the before they lose their jobs. Teachers have a right to a hearing and have the right to appeal the hearings findings. Discipline of Special Needs Students According to IDEA, students with disabilities can be suspended or expelled for violating the schools code of conduct. There are some procedures though, the length of time and type of action, the nature of the conduct that led to the action, and whether it is connected to the students disability. These situations are handled case by case. Dress Teachers are to dress professionally and by their schools dress code policy. Every school district is different in what they have their teachers to wear. FERPA FERPA is the Family Education Rights and Privacy Act. It is to ensure that parents have access to their childrens educational records and to protect the privacy rights of parents and children by limiting access to these records without parental consent. Works Cited Page Denton,Paula, Kriete, Roxann. A Conflict Resolution Protocol for Elementary Classrooms. Creducation.Retrieved from http://web.archive.org/web/20081031103405/http://www.responsiveclassroom.org/pdf_files/feature_10.pdf Jones, Vernon, Jones, Louise. Comprehensive Classroom Management Eleventh Edition p. 4, 49-50, 172-174, 298-299. Alex.State.al.us>stop bullying>mode Http://alex.state.al.us/leadership/Alabama_Educator_Code of_Ethics.pdf http://www.Idea.ed.gov http://www.myaea.org Http://www.brighthubededucation.com/teaching-methods-tips/19619-advantages-of-group-work-in-the-class/ Due Process Laws Vary for Teachers by State. (2014, September 23). Retrieved November 24, 2015, from http://www.edweek.org/ew/articles/2014/09/24/05tenure.h34.html

Physics of Rainbows Essay -- physics rainbow rainbows

When the Sun's light is refracted on passing through tiny rain droplets falling in the air a Rainbow is formed. Rainbows only need light from the sun or the moon and a large amount of spherical raindrops to form in the atmosphere. The rainbows can be compared to mini prisms. The light is refracted ("bending of light as it passes from one medium to another") and it causes different wavelengths (or colors) of the white light to separate. Whether these wavelengths of light will pass through the raindrop or reflect depends on the angle the light strikes the back of the raindrop. If a wavelength of the light strikes the back of the raindrop at an angle less than 48 degree relative to the normal then the light will pass through the raindrop. However, if the light strikes the back of the raindrop at an angle greater than 48 degrees then the light will be reflected. The reflected light is refracted as it exits the raindrop, but the color or the wavelength does not change. This process is repeated for a large number of raindrops, and a rainbow is formed. It's interesting to note, that the observer has his back to the sun and is facing the raindrops when viewing a rainbow. Thus geometry needs to be just right between the observer,the place where it is raining, and the sun. The light from the sun passes over the observer, strikes rain droplets, and comes back to the observer. Yet, the Earth prevents us to see the whole arc of a rainbow. When the sun is higher in the sky, only a small arc of a rainbow cab be seen from land. The reason for that is that the arc cannot be followed below the horizon(the droplets in the air below the horizon cannot be seen). It is possible to see the full arc of rainbow when flying above the clouds in an airp... ...r than than the rainbow produced by direct light. Another type of reflective rainbow can be seen on water surfaces like puddles or ponds. After a heavy rainfall, there are lots of spherical floating on a water surface. Therefore, it ispossible for a rainbow to be formed from indirect light rays. One of the main sources of light is from light, which is reflected back of a water surface, such as a lake or ocean. If we look at two raindrops, the first contributes to the rainbow formed by rays direct from the sun, and the other drop contributes to the rainbow formed by the indirect rays (the one which are reflected off the water surface). The rays leaving both of the drops leave at 42 degrees to the paths at which they entered. Thus, it is clear that a rainbow produced by a reflected light source will appear higher in the sky than one formed by direct sunlight.

Ecn 204 Final Exam Notes

Macro Final Exam Chapter 10: The Money Systems What assets are considered â€Å"Money†? What are the functions of money and the types of money? * W/o money, trade would require barter > Exchanging one good/service for another * unlikely occurrence that two people e/ have a good that other wants * 3 functions * Medium of exchange: an item buyers give to sellers when they want to purchase g/s * Unit of account: the yardstick ppl use to post prices & record debts * Store of value: an item ppl can use to transfer purchasing power from the present to the future * 2 kinds Commodity money: commodity with intrinsic value, i. e. gold coins * Fiat money: money w/o intrinsic value, used as money b/c of gov’t decree, i. e. dollar bills * Money in Can’n economy * Money supply (Money stock): the quantity of money available in the economy * Two assets should be considers: * Currency: the paper bills & coins in the hands of the general public * Demand deposits: balances in bank accounts that despositors can access on demand by writing a cheque/using debit card * Money Supply = currency + depositsWhat is the bank of Canada and its role? How do Banks create money? * Central Bank: an institution designed to regulate the money supply in the economy * Bank of Canada: the central bank of Canada * Established in 1935, nationalized in 1938, owned by Can’n gov’t * Managed by board of directors appointed by minister of Finance, composed of: governor, the senior deputy governor (7 yr terms), 12 directors (3 yr terms) * Four primary functions: * Issue currency, act as banker to commercial banks & Can’n gov’t, control money supply * Commercial Banks and Money Supply Although Bank of Canada alone is responsible for Canadian monetary policy, the central bank can control the supply of money only through its influence on the entire banking system * Commercial banks include credit unions, caisses populaires, and trust companies * Commercial banks can influence the quantity of demand deposits in economy and money supply * Reserves: cash that commercial banks hold * Fractional banking system > Keeps fraction of deposits as reserves, rest is loaned * Banks may hold more than this minimum amt if they choose * The reserve ratio, R Fraction of deposits that banks hold as reserves * Total reserves as % of total deposits * Bank T-account * T-account – simplified accounting statement that shows bank’s Assets & liabilities * Banks liabilities: deposits(what we put in the bank), Assets: Loans and reserves(What bank keeps) * R= Reserves/Deposits * Banks & money supply * $100 of currency is in circulation, determining impact on money supply: Calculate in 3 different cases * No banking system Public holds the $100 as currency; Money supply= $100 * 100% reserves banking system: banks hold 100% of deposits as reserves make no loans * MS = Currency (loans) + deposits = 0 +100 = 100 * Bank does not affect size of money supply * Fractional reserve banking system * R=10%: Reserves: 10, Loans: 90, Deposits: 100 * MS= $190 * When banks make loans > create money * Borrower gets: 90 in currency(asset), 90 in new debt/loan (liability) * Money Multiplier: The amt of money the banking system generates with each dollar of reserves * Money multiplier = 1/R R =10, 1/R = 10, 100 x 10 = 1000 * The Bank of Canada’s tools of Monetary Control * 1. Open-market operations * When it buys gov’t bonds from/ sells to the public * Foreign exchange market operations: when it buy/sells foreign currencies * MS increase when bank of Canada buys foreign currency with Canadian Currency; and decrease when BoC sells foreign currency * 2. Changing the overnight rate * Central banks act as bankers to commercial banks Bank rate : interest rate charged by bank of Canada on loans to the commercial banks * Since 1998 Bank of Canada as allowed commercial banks to borrow freely at the bank rate, paid commercial banks the bank rate , minus half percent, on their deposits at bank of Canada * Commercial banks never need to pay more than bank rate for short term loans, b/c they can always borrow from the Bank of Canada instead * Conversely, commercial banks never need to accept less than the bank rate, minus half a percent, when they make short-term loans, because they can always lend to the bank of Canada instead * Overnight rate: the interest rate on very short-term loans between commercial banks * Bank of Canada can alter the money supply by changing the bank rate, which in turn causes an equal change in overnight rate * A higher bank rate discourages commercial banks from borrowing from the Bank of Canada * A higher overnight rate discourages commercial banks from borrowing from other commercial banks * An increase in the overnight rate reduces the quantity of reserves in the banking system, which in turn reduces the money supply * Bank of Canada’s control of MS is not precise * Bank of Canada must wre stle w/ 2 problems that come from fractional-reserve banking * Does not control amt of money that: * Household choose to hold as deposits in banks * Commercial bankers choose to lend Chapter 11: Money Growth and Inflation How does the money supply affect the inflation & nominal interest rates? * Quantity theory of money: Price rises when gov’t prints too much money * Most economists believe the quantity theory is a good explanation of the long run behavior of inflation * Asserts that quantity of money determines value * 2 approaches: * Supply demand diagram MS determined by bank of Canada, banking system, consuers * In model, assume that BoC precisely controls MS & sets it at some fixed amt * MD (money demand) how much wealth ppl want to hold in liquid form * Depends on P: an increase in P reduces the value of money, so more money is required to buy goods & services * Thus: Quantity of money demanded is –vely related to the value of money +vely related to P, other thin gs equal (real income, interest rates, availability of ATMs) * * Results from Graph: Increasing MS causes P to rise * How does this work? Short version: * AT the initial P, an increase in MS causes excess supply of money * People get rid of their excess money by spending it on goods & services/ by loaning it to others who spent it * Result: increased demand of goods But supply of goods does not increase, so prices must rise * Other things happen in the short run, which we will study in later chapters) * Equation * Nominal Variables: are measured in monetary units * i. e. Nominal GDP, nominal interest rates (rate of return measured in $) nominal wage($ per/hour worked) * Real Variables: are measured in physical units * i. e. real GDP real interest rate (measured in output) real wage (measured in output) * Real vs. Nominal * Prices are normally measured in terms of money * Price of a compact disc: $15/cd * Price of a pepperoni pizza: $10/pizza A relative price: price of one good relat ive (divided by) another: * Relative price of CDs in terms of pizza: * Price of CD/Price of pizza = 15/10 = 1. 5 pizzas per cd * Relative prices are measured in physical units so they are real variables * Real vs. Nominal Wage * An important relative price is the real wage * W= nominal wage= price of labour $15/hr * P = price level = price of g&s $5/unit of output * Real wage is price of labour relative to price of output * W/P = 15/5 = 3 units output per hour * Classical theory of inflation: * Increase in overall level of prices * Over past 60 yrs, prices risen on avg of 4%/yr Deflation: people will wait for prices to drop on big ticketed items, dropped in the 20th century * In 1970s prices rose by 7%/yr * During 1990s, price rose at 2%/yr * Hyperinflation: extraordinary high rate * Quantity theory of money: explain long-run determinants of price lvl and inflation rate * Inflation is an economy-wide phenomenon that concerns the value of the economy’s medium of exchange * Whe n the overall price level rises, value of money falls * Inverse relationship b/w price & value of money * Value of money: * P = Price lvl (CPI/ GDP deflator) * P = price of basket of goods measured in money * 1/P is value of $1, measured in goods * Example: basket contains one candy bar, P = $2, Value of $1 is ? candy bar * The Classical Dichotomy Classical dichotomy: theoretical separation of nominal & real variables * Hume & the classical economists suggested that monetary developments affect nominal variables but not real variables * If the central bank doubles the MS, Hume & classical thinkers contend * All nom variables (including prices) will double * All real variables (Including relative prices) will remain unchanged * The neutrality of Money * Monetary neutrality: the proposition that changes in the MS do not affect real variables * Doubling money supply causes all nominal prices to double, what happens to relative prices? * Initially, relative price of cd in terms of pizza is * Price of cd/price of pizza = 15/10 = 1. pizzas per cd * After nominal prices double * 30/20 = 1. 5 pizza per cd * Relative price is unchanged * Monetary neutrality: proposition that changes in the MS do not affect real variables * Similarly, the real wage W/P remains unchanged, so†¦ * Quantity of labour supplied/demanded, total employment does not change * The same applies to employment of capital & other resources * Since employment of all resources in unchanged, total output is also unchanged by the MS * Most economists believe the classical dichotomy & neutrality of money describe the economy in the long run Does the money supply affect real variables like real GDP or the real interest rate? The velocity of Money: the rate at which money changes hands * Notation: * PxY = nominal GDP = price level x real GDP * M = money supply * V = velocity * Velocity formula: V = PXY/M * Pizza, Y = real GDP = 3000 pizzas, P= price of pizza = $10, P*Y = $30,0000, M = $10,000 * V=30,000 /10,000= 3, avg dollar was used in 3 transactions * Quantity Equation * M*V = P*Y * V = stable * So, a change in M causes nominal GDP (P*Y) to change by the same % * A change in M does not affect Y: money is neutral, Y is determined by tech & resources * So, P changes by the same % as P*Y and M * Rapid money supply growth causes rapid inflation How is inflation like a tax? Hyperinflation is generally defined as inflation exceeding 50%/month * Excessive growth in the MS always causes hyperinflation * Inflation tax: * When tax revenue is inadequate and ability to borrow is ltd, gov’t may print money to pay for its spending * Almost all hyperinflations start this way * The revenue from printing money is the inflation tax: printing money causes inflation, which is like a tax on everyone who holds money * The Fischer Effect * Rearrange definition of real interest rate: * Nominal interest rate = Inflation rate + real interest rate * Real interest rate is determined by saving & inve stment in the loanable funds market * MS growth determines inflation rate This equation shows how the nominal interest rate is determined * In long run, money is neutral, so a change in the money growth rate affects the inflation rate but not the real interest rate * So, nominal interest rate adjusts one-for-one with changes in the inflation rate * The inflation tax applies to people’s holdings of money, not their holdings of wreath * Fishcher effect: an increase in inflation causes an equal increase in the nominal interest rate, so the real interest rate is unchanged What are the costs of inflation? How serious are they? * The inflation fallacy: most ppl think inflation erodes real income * Inflation is a general increase in price of the things ppl buy & the things they sell (i. e. labour) * In long run, real incomes are determined by real variables, not inflation rate * Shoeleather costs: the resources wasted when inflation encourages ppl to reduce their money holdings * In cludes the time & transactions costs of more frequent bank withdrawals * Menu costs: the costs of changing prices Printing new menus, mailing new catalogs * Misallocation of resources from relative-price variability: Firms don’t all raise prices @ the same time, so relative prices can vary which distorts the allocation of resources * Confusion & inconvenience: inflation changes the yardstick we use to measure transactions, complicates long-range planning & the comparison of dollar amts over time * Tax distortions: inflation makes nominal income grow faster than real income, taxes are based on nominal income, & some are not adjusted for inflation, so†¦ inflation causes ppl to pay more taxes even when their real incomes don’t increase * Arbitrary redistributions of wealth Higher-than-expected inflation transfers purchasing power from creditors to debtors: debtors get to repay their debt w/ dollars that aren’t worth as much * Lower-than-expected inflation tran sfers purchasing power from debtors to creditors * High inflation is more variable & less predictable than low inflation * So, these arbitrary redistributions are frequent when inflation is high * Costs are high for economies experiencing hyperinflation * For economies w/ low inflation ( 0, â€Å"Capital outflow†, domestic purchases of foreign assets exceed foreign purchases of domestic assets * Capital is flowing out of country * When NCO < 0, â€Å"Capital inflow†, foreign purchases of domestic assets exceed domestic purchases of foreign assets * Capital is flowing into the country * Variables that Influence NCO * Real interest rates paid on foreign assets or domestic assets * Perceived risks of holding foreign assets * Gov’t policies affecting foreign ownership of domestic assets * The equality of NX & NCO * An accounting identity: NCO = NX * Arises b/c every transactions that affects NX also affects NCO by the same amt (And vice versa) * When a foreigner pur chases a good from Canada, * Can’n exports & NX increase The foreigner pay w/ currency or assets, so the Can’n acquires some foreign assets, causing NCO to rise * An accounting identity: NCO=NX * Arises b/c every transaction that affects NX also affects NCO the same amt ( & vice versa) * When a Can’n citizen buys foreign goods, * Can’n imports rise, NX falls * The Can’n buyer pays w/ Can’n dollars or assets, so the other country acquires Can’n assets, causing Can’n NCO to fall * Saving, Investment, & international Flows of Goods & Assets * Y = C + I + G + NX accounting identity * Y – C – G = I + NX rearranging terms * S = I + NX since S = Y – C – G * S = I + NCO since NX = NCO * When S > I, the excess loanable funds flow abroad in the form of positive net capital outflow, NCO >0 * When S e =P*/P implies that the nom exchange rate between 2 countries should equal the ratio of price lvls * If the 2 cou ntries have diff inflation rates, then e will change over time: * If inflation is higher in Mexico than in Canada, Then P* rises faster than P, so e rises – the dollar appreciates against the peso * If inflation is higher in Canada than in Japan, then P rises faster than P*, so e falls- the dollar depreciates against the yen * Limitations of PPP theory, why exchange rates do not always adjust to equalize prices across countries: * Many goods cannot easily be traded: * i. e. haircuts, going to movies * Price differences on such goods cannot be arbitraged away * Foreign, domestic goods not perfect substitutes: * i. e. some Can’n consumers prefer Toyatos over Chevys * Price differences reflect taste differences * Nonetheless, PPP works well in many cases, especially as an explanation of long-run trends * i. e.PPP implies: the greater a country’s inflation rate, the faster its currency should depreciate (relative to a low-inflation country like Canada) * Interest ra te determination in a small open economy w/ perfect Capital mobility * Why do interest rates in Canada & the U. S. tend to move up & down together? * Canada is a small open economy w/ perfect capital mobility * â€Å"small† = small part of the world economy * Canada is an economy w/ perfect capital mobility b/c * Can’ns have full access to world financial markets, * And the rest of the world has full access to the Can’n fin’l market * This means that the real interest rate in Canada should equal the real rate prevailing in the world U. S. r= r^w * Perfect Capital mobility: theory that real interest rate in Canada should equal that in the rest of the world is known as interest rate parity * Limitations: real interest rate in Canada is not always = to the real interest rate in the rest of the world b/c†¦ * Fin’l assets carry w/ them the possibility of default * Fin’l assets offered for sale in different Chapter 13: Macroeconomic theory of the open economy In an open economy, what determines the real interest rate? The real exchange rate? * Market of loanable Funds S=I + NCO * Supply of loanable funds = saving * A dollar of saving can be used to finance * The purchase of domestic capital * The purchase of foreign asset * So, demand for loanable funds=I + NCO * S depends +vely on the real interest rate, r * I depends –vely on r * Real interest rate, is the real return on domestic assets * A fall in r makes domestic assets less attractive relative to foreign assets * Can’ns purchase more foreign assets * Can’ns purchase fewer domestic assets * NCO rises * The supply & demand for loanable funds depend on the real interest rate * A higher real interest rate encourages ppl to save & raises the quantity of loanable funds supplied * The interest rate adjusts to bring the supply & demand for loanable funds into balance * At eq’m interest rate, the amt that ppl want to save exactly balances the des ired quantities of domestic investment & foreign investment * Loanable funds market diagram * R adjusts to balance supply & demand in the LF market * Both I & NCO depend –vely on r, so the D curve is downward-sloping * * In small open economy w/ perfect capital mobility, i. e. Canada, the domestic interest rate = world interst rate * As a result, the quantity of loanable funds made available by the savings of Can’ns does not have to equal the quantity of loanable funds demanded for domestic investment * The difference between these two amts is NCO * * How are the markets for loanable funds & foreign-currency exchange connected? The market for foreign-currency exchange exists b/c ppl want to trade w/ ppl in other countries, but they want to be paid in their own currency * 2 side of foreign-currency exchange market are represented by NCO & NX * NCO represents the imbalance between the purchases & sales of capital assets * NX represents the imbalance b/w exports & imports of goods & services * Another identity from preceding chapter: NCO = NX * In the market for foreign-currency exchange, * NX is the demand for dollars: foreigners need dollars to buy Can’n NX * NCO is the supply of dollars: Can’n residents provide/give dollars when they buy foreign assets * S=I + NCO > S – I =NX * What price balances the supply & demand in the market for foreign-currency exchange? * The real exchange rate (E) = e*P/P* The Can’n exchange rate(E) measures the quantity of foreign g/s that trade for one unit of Can’n g/s * E is the real value of a dollar in the market for foreign-currency exchange * The demand curve for dollars (NX) is downward sloping b/c a higher exchange rate makes domestic goods more expensive * The supply curve (NCO) is vertical b/c the quantity of dollars supplied for NCO is unrelated to the real exchange rate * Increase in E makes Can’n goods more expensive to foreigners, reduces foreign demand for Canâ⠂¬â„¢n goods & dollars, does not affect NCO/supply of dollars * The real E adjusts to balance the S & D for dollars * At Eq’m E, the demand for dollars to buy NX exactly balances the supply of dollars to be exchanged into foreign currency to buy assets abroad * Disentangling S&D When can’n resident buys imported goods does the transaction affect s/d in foreign exchange market? * The demand for dollars decrease * The increase in imports reduce NX which we think of as demand for dollars (NX= net demand for dollars) * When foreigner buys Can’n asset, does the transaction affect supply/ demand in the foreign exchange market * The supply of dollars falls * NCO = Net supply of dollars How do gov’t budget deficits affect exchange rate & trade balance? * The effects of a budget deficit * National saving falls * The real interest rate rises * Domestic investment & net capital outflow both fall * The real exchange rate appreciates * Net export fall (or the trade de ficit increases) * Eq’m in the Open Economy NCO is the variable that links these two markets: S = I + NCO, NCO =NX * In the market for loanable funds, supply comes from national saving & demand comes from domestic investment & NCO * In the market for foreign-currency exchange, suplly comes from NCO & demand comes from BX * * * Eq’m in the open economy * Prices in the loanable funds market & the foreign-currency exchange market adjust simultaneously to balance supply & demand in these two markets * As they, they determine the macroeconomic variables of national saving, domestic investment, NCO, and NX How do other policies or events affect the interest rate, exchange rate, and trade balance? The magnitude & variation in important macroeconomic variables depend on the following: * Increase in world interest rates * Gov’t budget deficits & surpluses * Trade policies * Political & economic stability * Three steps in using the model to analyze these events * Determin e which of the s/d curves e/ event effects * Determine which way the curves shift * Examine how these shifts alter the economy’s equilibrium * * * Increase in world interest rates * Events outside Canada that cause world interest rates to change can have important effects on the Can’n economy * In a small open economy w/ perfect mobility, an increase in the world interest rate†¦ * Crowds out domestic investment, * Cause NCO to increase & * Causes the dollar to depreciate * The effects of an increase in the gov’t budget deficit * * Gov’t budget deficits & surpluses * b/c a gov’t budget deficit represents negative public saving, it reduces national saving, and therefore reduces†¦ * the supply of loanable funds * NCO * The supply of Can’n dollars in the market for foreign-currency exchange * Trade Policy: is a gov’t policy that directly influences the quantity of goods @ services that a country imports/exports * Tariff: a tax o n imported goods * Imported quota: a limit on quantity of a good produces abroad and sold domestically * Initial impact is on imports – which affects NX NX are the sources of demand for dollars in the foreign-currency exchange market * Imports are reduced at any exchange rate, & NX will rise * This increases the demand for dollars in the foreign currency exchange market * * * There is no change in the market for loanable funds, and therefore, no change in NCO * B/c foreigners need dollars to buy Can’n NX, there is an increased demand for dollars in the market for foreign-currency * This leads to an appreciation of the real exchange rate * Effect of an import quota * An appreciation of the dollar in the foreign exchange market discourages exports * This offsets the initial increase in NX due to import quota * Trade policies do not affect the trade balance Political Instability & Capital Flight * Capital flight * Is large & sudden reduction in demand for assets located i n a country * Has its largest impact on the country from which the capital is fleeing, but it also affects other countries * If investors become concerned about the safety of their investments, capital can quickly leave an economy * Interest rates increase & the domestic currency depreciates * When investors around the world observed political problems in Mexico in 1994, they sold some of their Mexican assets and used the proceeds to by assets of the other countries * This increased Mexican NCO An increased demand for loanable funds in the loanable funds market leads the interest rate to increase * This increased the supply of pesos in the foreign-currency exchange market * * Chapter 14: Aggregate Demand & Supply What are economic fluctuations? What are their characteristics? * Over LR, Real GDP grows about 2%/yr on avg * In SR, GDP fluctuates around its trend * Recessions: falling real incomes & rising unemployment * Depressions: severe recessions (very rare) * SR economic fluctuat ions are often called business cycles * 3 facts about economic fluctuations * Are irregular & unpredictable * Most macro’c quantities fluctuate together * As output falls, unemployment rises Use mode of AD & AS to study fluctuations * Short run, changes in nominal variables (Ms or P) can affect real variables (Y/U-rate) How does the model aggregate demand & supply explain economic fluctuations? * Aggregate-demand curve – shows the quantity of goods & services that households, firms, & the gov’t want to buy @ each price level * Aggregate-supply curve- shows the quantity of goods & services that firms choose to produce and sell at each price level * Why does the aggregate-demand curve slope downward? What shifts the AD curve? * AD curve shows quantity of g/s demanded in the economy at any given P * Y=C+I+G+NX * Assume G fixed by gov’t policy Increase in P reduces the quantity of g/s demanded b/c: * The wealth effect (c falls) * The dollars ppl hold buy fewe r g/s so real wealth is lower * Ppl feel poorer * i. e. a stock market boom makes households feel wealthier, C rises, the AD curve shifts right; preferences: consumption, saving tradeoff; tax hikes/cuts * Interest rate effect (I falls) * Buying g/s requires more dollars * To get these dollars, ppl borrow more * Drives up interest rates * i. e. firms buy new computers; expectations, optimism/pessimism; Interest rates, monetary policy; investment tax credit/other tax incentives * The exchange rate effect (NX falls) * Real exchange rate= exP/P* Increase real exchange rate, Can’n exchange rate appreciates * Can’n exports more expensive to ppl abroad, imports cheaper to Can’n residents * i. e. booms/recessions in countries that buy our exports (recession in the U. S. ); appreciation/depreciation resulting from int’l speculation in foreign exchange market * Changes in G * Federal spending i. e defense; provincial & municipal spending i. e roads, schools What is the slope of the aggregate-supply curve in the short run? Long run? What shifts AS curve? * AS curve shows the total quantity of g/s firms produce & sell at any given P * Upward-sloping in short run * Vertical in long run Natural rate of output (Yn) us the amt of output the economy produces when unemployment is at its natural rate * Yn is also called potential output/full-employment output * Yn determined by the economy’s labour (L) capital (K), and natural resources(N), and on the lvl of tech(A) * Changes in L/Natural rate unemployment: immigration, Baby-boomers retire, gov’t policies reduce natural u-rate * Changes in K/H: Investment in factories, more ppl get college degrees, factories destroyed by a hurricane * Changes in natural resources(N): discovery of new mineral deposits, reduction in supply of imported oil, changing weather patterns that affect agricultural production * Changes in tech (A): productivity improvements from technological progress * An increase in P does not affect any of these, it does not affect Yn (Classical dichotomy) * Any even that changes any of the determinants of Yn will shift LRAS * i. e. immigration increases L, causing Yn to rise * Over the LR, tech progress shifts LRAS to the right & growth in the MS shifts AD to the right * Ongoing inflation & growth in output * The SRAs curves is upward sloping: * Over the period of 1-2 yrs, an increase in P causes an increase in quantity of g/s supplied * If AS is vertical, fluctuations in AD do ot cause fluctuations in output/employment * If AS slopes up, then shifts in AD do affect output & employment * Three theories: * Sticky wage theory, Imperfection- nominal wages are sticky in the short run, they adjust sluggishly, due to labour contracts; firms & workers set the nominal wage in advance based on Pe, the price lvl expected to prevail * If P>Pe, revenue is higher, but labour cost is not. Productions is more profitable, so firms increase output & employment * Hence, hi gh P causes higher Y, so the SRAS curve slopes upward * Sticky price theory, Imperfection- many prices are sticky in the short run: due to menu costs, the costs of adjusting prices, i. e. ost of printing new menus, the time required to change price tags * Firms set sticky prices in advance based on Pe * Suppose the BoC increases the MS unexpectedly, in LR P will rise * In SR, firms w/o menu costs can raise their P immediately * Firms w/ menu costs wait to raise prices, meantime , their prices are relatively low, which increase demand for their products, so they increase output & employment * Hence, higher P is associated w/ higher Y, so the SRAS curve slopes upward * Misperceptions- imperfection: firms may confuse changes in P with changes in the relative price of the products they sell, if P rises above Pe- a firm sees its price rise before realizing all prices are rising. The firms may believe its relative price is rising & may increase output & employment, * An increase in P can cause an increase in Y, making the SRAS curve upward-sloping * What 3 theories have in common: Y deviates from Yn, when P deviates from Pe * Y(Output) = Yn + a(P-Pe) * Yn-Natural rate of output (LR) * a>0, measures how much Y responds to unexpected changes in P * P, actually price lvl; Pe, expected price lvl * SRAS & LRAS The imperfections in these theories are temp, over time†¦ * Sticky wages & prices become flexible * Misperceptions are corrected * In LR†¦ * Pe = P, Y=Yn, AS is vertical * Unemployment is at its natural rate * Why the SRAS curve might shift * Everything that shifts LRAS shifts SRAS too * Also, Pe shifts SRAS: * If Pe rises, workers & firms set higher wages * At e/ P production is less profitable, Y falls, SRAS shifts left * * Economic fluctuations * Caused by events that shift the AD/AS curves * 4 steps to analyzing economic fluctuations: * Determine whether the event shifts AD & AS * Determine whether curve shifts left/right Use AD-AS diagram to see how the shift changes Y & P in the short run * Use AD-AS diagram to see how economy moves from new SR eq’m to new LR eq’m * I. e. Stock market crash : C falls, so AD shifts left; SR eq’m at B, P & Y lower, unemp higher; Over time Pe fals, SRAS shifts right, until LR eq’m at C, Y and unemp back at initial lvls * * i. e. oil prices rises: increases costs, shifts SRAS Left, SR eq’m at point B, P higher, Y lower, unemp higher; from A to B, stagflation: a period of falling output & rising prices; if policymakers do nothing: low employment causes wages to fall SRAS shifts right until LR eq’m at A, or policymakers could use fiscal/ monetary policy to increase Ad & accommodate AS shift: Y back to Yn, but P permanently higher

Lenin’s View of Economic Policies in Russia Essay

Lenin’s view of economic polices in Russia between 1917 and 1923 was shaped by the factors of War Communism, and the New Economic Plan (NEP). Lenin realized that to have a successful economy and to keep the idea of equality in Communism there had to be a compromise; there needed to be a balance of state control and individual incentive for the economy to prosper. Through the failure of War Communism and the success of the economy and the drift away from Communism with the NEP; Lenin learned the ‘do’s and don’ts’ of a successful economy. Lenin described what the country needed to do to have a successful economy, he said, † We have found that a degree of private commercial interest, with state supervision and control of that interest, is all we actually need†¦ (doc. 5). This shows how both War Communism and the NEP were factors that shaped Lenin’s compromising idea of what a economy needed to be successful. The War Communism policy was adopted to keep the Red Army supplied. During War Communism the government took control of industry, and told factories what to produce; and the government would take any grain that was produced by the farmers. The Cheka would steel the grain that the farmers produced, this made the farmers angry and they no longer had any incentive to grow crops because the crops would just be taken away from them. Also money became worthless, wages were paid in food or other goods, and many people bartered goods instead of using money. The situation for the farmers and the peasants got worse. By 1921 Russia’s economy was shattered. Industrial production had drastically decreased; and the cities were in chaos. Agriculture had been demolished. War Communism was put in affect to increase the productivity of both industrial goods and food, but the workers and farmers saw no point in putting in the effort if in the end it would be taken away from them. War Communism led to the destruction of the economy of Russia. Lenin finally admitted that War Communism was a mistake, he said, â€Å"The small farmer needs a spur, and incentive that accords with his condition†¦ We are very much to blame for having gone to far; we overdid the nationalization of industry and trade, clamping down on the local exchange of commodities. Was that a mistake? It certainly was. (doc. 4)† This quote is an example of how Lenin realized that he had made a mistake and this quote also shows that Lenin understands that the workers and farmers need an incentive to work; with an incentive the economy will grow. Lenin’s view of economic policies was greatly influenced by the failure of War Communism, and by the failure he was able to figure out another system that would revive Russia’s economy. Lenin realized that to have a successful economy the people have to have the incentive to work. Lenin also knew that if he did not improve the economic state of Russia that the Communists would not survive; War Communism took the ‘safety net’ away from the Communists. Lenin had to act quickly to figure out another policy that would make the people want to work, and to revive the economy. In 1921 the NEP was created to fix the economy. Lenin created this new policy to try to burst the morale of the people and make them want to produce more grain or products. The transition form War Communism to the NEP was drastic, the people had to change there lives to fit this new, more capitalists society. Though the change to a more capitalist economy, the NEP was successful in ‘jump starting’ the farming production, for example. Lenin says, â€Å"Release of [surplus goods] into circulation would stimulate small farming, which is in terrible state†¦Ã¢â‚¬  (doc. 4) This is a great example of how Lenin realizes why he needs to change from the War Communism to the NEP, for a least one reason to increase the amount of grain produced. The creation of the NEP changed many laws that were once holding Russia’s economy back. Grain requisitioning was stopped. Grain was no longer taken from the peasants. Also traders could buy and sell goods, which was illegal during War Communism. Smaller factories were returned to their former owners; and they were allowed to sell the goods they made and make a profit from them. Finally larger industries like coal and steel remained under state control; but some larger factories were able to sell their products. These were some of the main differences between War Communism and NEP. During the NEP the economy prospered, because people were now allowed to keep some of the goods they made and then sell them for their own profit. This made the people want to produce more so they could have more for their family. Lenin described some of the good affects that the NEP had, he said, â€Å"We have achieved much with our requisitioning system. Our food policy has made it possible in the second year to acquire three times as much grain as in the first.† (doc. 2) Lenin was talking about the great increase in the production of grain, this great increase was directly related to the NEP; because the peasants could keep some of the grain they made which gave them an incentive to work hard. Communists were angry because they saw the country returning to capitalism. They did not like the fact that bosses of factories called kulacks could hire men to work for them. Also Communists disliked the ‘Nepmen’, because they made a high profit by buying goods cheaply and then selling them for more. Though the NEP revived the economy, people, especially peasants were unhappy with the new capitalist society. Lenin’s view of economic policies was changed through the NEP, he knew that people need the incentive to work, but he also knew he could not give the people to much economic freedom; the idea of balancing the policy of War Communism and NEP was Lenin’s final view of how to keep the people happy and to sustain a great economy.