Economics Individual assignment

Economics Individual assignment

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Economic growth of a nation or the whole world takes a number of stringent measures, which must be followed to the letter if at all anything tangible, are to be realized. In the year 2010, Europe as an economic block realized a 2.4% growth despite the financial crisis, which hit the whole world in the year 2009 and as per the forecasting of the International Monetary fund, it is expected that the years 2011 and the 2012 would have a higher growth, realized (http://www.imf.org/external/index.htm). The above shows of an economic block that has put all measures to make sure that the growth prospectus are met rather than just being idealized in papers. Other economic forums and if all nations in the world were to put measures to attain projected growths, it is possible that the world would be on the trend of realizing a number of goals set in a number of forums; for example, the 2015 goals, the millennium goals. This paper looks at a number of theories and the policies that are applicable in the sense of economics and mostly that applies to the economics of Japan as a country in the Asian block.

Question 1: Country- Japan

Japan comes under the Asian block of countries that has other economically important countries such as Armenia, China, Saudi Arabia, Singapore, Qatar, Russia, Philippines, Pakistan and Iran and Israel among others. In the discussion of Japan in terms of economics, the following would be discussed; the Unemployment rate, the consumer price index, the GDP deflator and the current account balance or what is known as the percentage of GDP; and in the discussion of the above, the information would range from the year 2007 to the year 2010.

cUnemployment rate of Japan

The above is a rough representation of the trend in terms of unemployment in the country and from the representation, it is clear that the rate is lousy as it is seen to have an upward trend. The trend is not good for a country and unless the government puts measures to rectify the issue, it may come to hit a high mark of 6 as per the trend. As it stands currently, the number of persons who were unemployed by March this year stood at 59.28 million, which is not good for such an industrious country.

Consumer price index

According to Oecd Publishing (2009), it is clear that Japan has made it well when it comes to the management to a number of things such as the climate, which in general is beneficial to the consumers and all importantly their consumer price index and especially at keeping it as low as possible. The following is a table that shows the general figures for the years 2007, 2008, 2009, and 2010 as well as the analysis of the figures.

Year

Consumer Price Index

Analysis

2007

- 0.100%

From the data on the left, it can be said that the year that was bad for Japan was the year 2008; the figures talk differently from the expectations, for example, the year 2009 and the year 2010 looked good despite the fact that the two years were badly hit by the global financial crisis. It can be said that Japan has managed its economy well and made the consumer price index as low as possible.

2008

 

2009

-0.297%

2010

-1.092%

GDP deflator for Japan

The growth domestic product for this country has not been stable; however, there are some notable down trend from the year 2007 to the year 2010 culminating to less than 90 in the year 2010. Mankiw (2008) noted that the GDP comes with a number of components and among others, they are the investment denoted as (I), consumption (c), government expenses (G) and the net exports (NX) and the whole GDP denoted as Y, and in this therefore the calculation of GDP is:

                        Y= C + I + G + NX

Current account balance (percentage of GDP) for Japan

Year

Current account balance (percentage of GDP) for Japan

2007

 

2008

 

2009

 

2010

 

Consumer Price Index and GDP Deflator

In general, the difference between the GDP deflator and the Price index for the consumers is that the GDP deflator is a reflection of all the services and the goods that are produced in a country. In this case Japan while the CPI is a reflection of the prices of the representative basket of the products; that is, the goods and the services in the country. As well, the CPI is known to use a kind of fixed basket of the goods and the services while the deflator is like a comparison of the prices of the goods that are produced in a certain year and then compared to the prices of goods in the base of the year. The two are concepts in economics and business of a country and as Baumol (2010) of the fundamental economics concepts; running the economy of a county is like a private enterprise where everything whether outside or inside counts.

Question 2

The monetary policy has to do with the regulation, the cost of credit and the availability while the fiscal policy is the government taxes, the debt and the expenditure, and as pertaining Japan, the ministry of finance is seen to regulate the allocation of the resources into the economy; and mostly to control the inflation rate. The Aggregate Demand- Aggregate Supply Model is a kind of model that shows the macroeconomic and explains the price level as well as the output. The following is an illustration of the AD-AS model and explanation of the case of Japan.

The government is using all means at least to have the rate of inflation go down and it is leaning on the monetary policy because of the public debt, which is virtually the highest in any of the industrialized country.

 

The country is also pursuing a zero interest rate policy that started in the year 2001 and in the year 2007, it had reached at a 0.5% peak and the year 2008 saw the central bank of Japan heighten cutting of the rates as the economy of the country was hard hit by the effects of the famous global financial crisis. However, analysts point that the country has to adopt other measures because cutting of the rates may not work in the end.

Question 3

  1. The minimum wage in Japan is dependant on the industry as well as the region that the person is working, they apply for some industries, and mostly these are set higher than the required regional minimum. Mostly, if their industrial and the regional wage differ, it is noted that the higher of the two would apply, and this means that Japan has one of the best in terms of the minimum wages for the laborers. Baker (2010) notes of the comparative labor laws as they are applicable in Japan and specifically, the main purpose of the comparative laws is to enhance some better understanding of a countries labor law system. In Japan, the wages range from ¥642, which is equivalent to $7.75, to ¥821 ($9.90); and this, is calculated per worker for all of the works. There are also some allowances like the extra pay for commuting and other temporary pays like tips and bonuses.
  1. The laws as set by the country mean that some people would get more than the others would, and this is understandable because in essence, some regions are demanding than the others. People who are living in the cities may require a higher minimum wage than those in the rural areas. This is the same case with the type of industries as some have the environment that is more demanding than the others are. The following is a graphical representation on the impact that minimum wage laws in Japan would have on the people.

Question 4

China- by the year 2010, the Republic of China had an inflation rate that had risen to 5.1 and this was contributed by the soaring food prices. Actually, the food prices were noted to the inflationary factor that contributed to 11.7% and the stop was not in sight as this was determined by the international prices as well of crucial commodities.

Brazil- the standing as per the year 2010 had the country a 6.4% percent and this was greatly contributed by a steadily increasing Gross Domestic Product; for example, the GDP rose from the year 3.70% while the year 2010 had 7.50%

India- just like China, the major contribution of the increasing rate of inflation in India in the year 2010 was contributed by the world prices for the food and other essential commodities like fuel. The inflation rate in the year 2010 touched a record 11% and this meant that the government ought to have taken stringent measure at least to save the situation.

Argentina- the country has a similar situation of increasing inflation rate with the year 2010 having a record high of 5.1% and the major contributors of this being the rising cost of essential commodities in the world. However, other statistics noted that the inflation rate had gone up to 10% instead of 5.1%.

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