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Reply 360
Original post by werkintwerkin
basically the three development models.
lewis says that surplus labour is transferred to manufacturing sector=increased income=increased saving
rostow says that you have to trade agriculture to gain foreign currency to buy capital equipment=move to manufacturing=increased savings.
theyre basically all the same just the first step is different tbh.

or maybe the imf would lend loans, or a country would give aid, debt relief all reduce savings gap. however there are disadvantages of the above which you should know


ah okay i get it; so basically anything to make people's incomes go up.
what are your main development strategies?

i've got industrialisation (lewis model)
development of tourism
Aid


i don't really want to use debt cancellation cos i'd be repeating the same points which i used for aid. could i use inward looking strategies like protectionism? or is that more relevant to developed countries
Original post by Paddyspower
how would you answer a question such as 'evaluate ways to reduce absolute poverty in a developing country of your choice' would we mention the things to promote economic development such as aid, debt relief etc?


Anyone?
Reply 362
Original post by Paddyspower
Anyone?


yeah as long as you relate it back to poverty. e.g aid means the government will be able to spend more on social services such as education; leading to more employment and higher incomes etc.
does anyone have any notes on monetary policy in another country aside from the UK as I've done my notes for only the UK. help please? :smile:
Reply 364
I'm really confused with the foreign currency gap. Could someone explain how primary product dependency and lack savings creates a foreign currency gap?
Original post by odbal
ah okay i get it; so basically anything to make people's incomes go up.
what are your main development strategies?

i've got industrialisation (lewis model)
development of tourism
Aid


i don't really want to use debt cancellation cos i'd be repeating the same points which i used for aid. could i use inward looking strategies like protectionism? or is that more relevant to developed countries


yeah you can use protectionism. mine are the same but i have debt cancellation as well
Original post by 80286
I'm really confused with the foreign currency gap. Could someone explain how primary product dependency and lack savings creates a foreign currency gap?

my answer is on pg 18
Reply 367
Original post by werkintwerkin
Foreign exchange gap in simple flow chart:

Developing country produces primary products = Low export earnings = (These earnings are in the form of foreign currency) = The gap is simply that they do not have enough foreign currency to buy imported goods.


But why do you need the foreign currency from the exports to buy the imports, can you not just convert your domestic currency into foreign currency to purchase imports.

Or do you just mean the foreign currency gap means the developing nation just doesn't have enough money or money to convert into foreign currency to buy the imports?
costs and benefits of joining a monetary union anyone?
I've heard you can make up some statistics and not be checked for them if you keep them at a minimum with your real ones...any truth in that?

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Original post by ThatGirlYasmin
costs and benefits of joining a monetary union anyone?


Benifits:
-Greater price transparency
-Elimination of transaction costs
-attracts FDI
-easier to set up large firms and exploit economies of scale.
costs:
- loss of independent monetary policy
-transition costs
-trade partners might find it more expensive as their currency could be weaker in terms of the euro, therefore the country would lose out on trade.
(edited 9 years ago)
Do we need to know how to reduce a budget defecit?


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Reply 372
Help quick question

When tax avoidance occurs where people send there money to a different country.. Is it correct to say this a leakage from the circular flow? and then can you relate this to a decrease in the multiplier?

Also, When evaluating subsidies provided by the government to reduce inequality is it correct to say... That it may lead to increased borrowing to fund the subsidies and in turn this would increase the national debt. This then creates a opportunity cost for future generations as interest payments on the national debt means less money will be available for public services in the long run therefore increasing inequality in the future.
Original post by cashisking
Benifits:
-Greater price transparency
-Elimination of transaction costs
-attracts FDI
-easier to set up large firms and exploit economies of scale.
costs:
- loss of independent monetary policy
-transition costs
-trade partners might find it more expensive as their currency could be weaker in terms of the euro, therefore the country would lose out on trade.


Thanks ! :smile:
How would you evaluate reasons for inequality in the UK eg. Unemployment, educational opportunities. Could you say for unemployment about the replacement ratio?


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Original post by werkintwerkin
Foreign exchange gap in simple flow chart:

Developing country produces primary products = Low export earnings = (These earnings are in the form of foreign currency) = The gap is simply that they do not have enough foreign currency to buy imported goods.


So then can you link it to the prebisch signer hypothesis and declining terms of trade?
Original post by Farringtonn
Do we need to know how to reduce a budget defecit?


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yeah I think so.

You would talk about demand side policies
-Expenditure reducing policies
-Expenditure switching polices
Original post by ThatGirlYasmin
yeah I think so.

You would talk about demand side policies
-Expenditure reducing policies
-Expenditure switching polices


Would it not just be reduced government expenditure and higher taxes? Seen as it's a budget defecit



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Original post by Livaren
But why do you need the foreign currency from the exports to buy the imports, can you not just convert your domestic currency into foreign currency to purchase imports.

Or do you just mean the foreign currency gap means the developing nation just doesn't have enough money or money to convert into foreign currency to buy the imports?


their main revenues are from exporting to developing countries, not domestic currency, so they need foreign currency to import
Original post by shabba-ranks
I've heard you can make up some statistics and not be checked for them if you keep them at a minimum with your real ones...any truth in that?

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tbh, yeah. as long as you do some unknown country like mongolia or something and it is a realistic figure

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