Homeostasis and pain management in patients with multisystem failure Research Paper

Homeostasis and pain management in patients with multisystem failure - Research Paper Example Therefore, as the number of old people suffering from chronic diseases increases; the cases related to chronic pains in hospitals also increase. In addition, several old patients in hospitals experience multi system failures. There are several measures being put in place by health organizations to manage the pain experienced by the old generation as a result of multi system failures. Pain management is the practice by medical practitioners, nurse practitioners, physiotherapists and clinical nurse practitioners to reduce the pain or totally get rid of the pain that patients go through. Pain management is always done through the administration of medicine to the sick or injured patient (Hardy & Paul, 1997). This will help in reduction of pain in the patient. Homeostasis management is the practice of maintaining a stable and constant internal environment of a patient. This may involve maintaining constant body temperatures. Geriatric patients are often old people and they also undergo p ain. This paper discusses expansively the pain management that can be administered to Mrs. Elli Baker, a 73-year-old geriatric patient who was transferred to an emergency room after collapsing. Assessment of Patient. The assessment of Mrs. Baker should include all the problems that she experienced. The assessment talks about her homeostasis, oxygenation and her level of pain. The assessment also includes the physical observations made on her, observations made through technology and in the laboratory. Mrs. Baker was on two medications: lisinopril and hydrochlorothiazide. These two medications often result to the collapsing of geriatric patients. It is these two medications that led to her collapse. Mrs. Baker had problems with her oxygenation. This can be as a result of diabetes that she had experienced previously. Her oxygenation problem can be solved by introducing arterial gases into her body. Her body temperature is also an issue of concern. Mrs. Baker collapsed in her backyard may be because she was up to some difficult tasks such as physical exercises that could have led to an increase in her temperature. Mrs. Baker was also dehydrated. She had past history of diabetes and this always involves having too much sugar in the body. This can later lead to dehydration in an individual. This could be solved by administering water into the circulation system of Mrs. Baker. Mrs. Baker experienced high level of pain. This was evident because, when talking to the nurse, she had problems responding and this may have been caused by the pain she was feeling. When observed, it was evident that Mrs. Baker was undergoing pain. This was because she tended to be uncomfortable in bed, she was grunting and she showed grimace on her face. This was a clear indication of the pain that she was in. She experienced hypertension and had respiratory problems. The cause of these could be seen by introducing her to an X-ray to observe any blockages in the arteries and veins and in the respiratory system. Technological Tools. In treating Mrs. Baker’s condition, various technological tools would be used. One of the tools that would be used in treating her is a stethoscope. A stethoscope is essential and would be utilized to know the rate or speed of her heartbeats. Mrs. Baker had respiratory problems and she collapsed at her backyard. Knowing the speed of her heartbeats will be essential since this will help in knowing the kind of activity she was doing before she collapsed. In case she was doing physical exercise, the stethoscope would read her fast heartbeats and this would help the medical practitioners in solving her problem. The other technological tool that would

M-Commerce Essay Example | Topics and Well Written Essays - 2000 words

M-Commerce - Essay Example The technology of cell phone is rapidly becoming the most well-liked device intended for browsing the Internet. Through this technology most of the people are frequently log-on to Internet and search for the information regarding a business, entertainment, and other Medias (Kitch, 2009).  The term and technology of the mobile commerce is utilized to outline the emerging practice of conducting promotional and financial activities by means of the utilization of a wireless handheld device. The term mobile commerce is recognizing as the transactions can be conducted by means of personal digital assistants (PDAs), cell phones and other hand held devices that can work by means of Internet access. The technology and implementation of the M-Commerce has been the most sophisticated technology that is operational nowadays and going to enhance more and more day by day (Tatum, 2009). Mobile-Commerce can be described as a technique or tool that offers the facility of the selling and buying of g oods, products as well as services through mobile phones or wireless handheld devices (like that cellular telephone, personal digital assistants, etc.) (Wang, Song, Lei, & Sheriff, 2005) and (TechTarget, 2003). Presently the technology of the Mobile-Commerce is recognized as the next-generation e-commerce. Through the Mobile-Commerce technology a user can access the web without requiring and discovering a place to plug in the huge system. The rising technology behind Mobile-Commerce, which is based on the WAP or Wireless Application Protocol, has made far bigger paces in Europe, where mobile devices operational by means of Web-ready micro-browsers are greatly widespread than in the United States (TechTarget, 2003). However (Stafford & Gillenson, 2003) differentiate between E-commerce and M-commerce by saying that, E-commerce is generally deals with the activities of buying and selling, on the other

The three models of exchange rate determination

The three models of exchange rate determination Abstract This paper presents three models of exchange rate determination. Each models are based on the equilibrium of markets in the international economy. The equilibrium of goods market determine exchange rate according to purchasing power parity; the equilibrium of money market determine exchange rate according to monetary model; the equilibrium of asset markets determine exchange rate according to portfolio model. Introduction It is in the interest of a variety of parties to understand the determinants of exchange rates. For economists, it is for their intellectual and academic pursuit to uncover the economic mechanism determining exchange rates. Policymakers would like to understand the impacts and consequences of exchange rates to the policies and vice versa. Finance managers would like analyze the fundamental factors determining exchange rates and incorporate these factors in their financial or investment decision making. Speculators in foreign exchange market would like to know the direction of exchange rate movement aforehand to make profit. In the following, we explain three models of exchange rate determination, namely, the purchasing power parity(PPP), the monetary model and the portfolio balance theory. Purchasing Power Parity The theoretical assumption of Purchasing Power Parity starts from the Law of One Price. The Law of One Price in open economy states that, if the market is competitive, no transaction cost and no barriers of trade, then identical products in different countries should be sold at the same prices, adjusted by exchange rate, i.e. under the same currency denomination. Otherwise, there is arbitrage opportunity. In notation, pi =spi* (1) for pi = price of good i at home country, pi*= price of good i at foreign country, s = exchange rate For example, the price an ounce of gold quoted at London in GBP should be the same as an ounce of gold quoted at New York in USD times exchange rate of GBP/USD. Next, we consider a model with two countries. Both of them have the floating exchange rate-regimes and Law of One Price holds for all goods in the two counties. Then, the general price level of home country is should be the same as the general price level of foreign country, adjusted by exchange rate. In notation, P=sP* (2) for P= general price level at home country, P*= general price level at foreign country P and P*, the general price level is the weighted average of all prices of goods. So if (1) holds for all goods, (2) will holds. (2) is what we called the absolute Purchasing Power Parity (absolute PPP): the general price level of every country should be the same if adjusted to the same currency. In other words, the exchange rate should be determined by the relative price level of two countries. If you can use $1 of home currency to buy a basket of goods at home country, then the $1 converted to foreign currency should be able to buy the same basket of products in foreign country, i.e. they have the same purchasing power. We can interpret that PPP is a long-run equilibrium level of exchange rate that there is fundemental force of demand and supply in goods market to retain it. For example, assume that the domestic price level is higher than the foreign price level under the same currency measure, i.e. P > sP*. If goods are identical and there is transaction cost and barriers of trade, then consumers from domestic country will not buy local products. They will use their domestic currency to exchange to foreign currency to buy foreign products, which is cheaper. The force of supply and demand of currency will drives down exchange rate to depreciate. In turn, depreciation of exchange rate will lower the price of domestic products(under the same currency measure) and then the PPP equilibrium, P = sP* is retained. Yet the absolute PPP to be too strict, economists considers a weaker form, called the relative PPP. It states that percentage changes in price levels of two countries determine the percentage change in exchange rate. In notation, ΆP/P = Άs/s +ΆP*/P* (3) The relative PPP is a weaker form of absolute PPP because if absolute PPP holds true, the relative PPP holds true also but not vice versa. Moreover, change in price level is indeed the inflation rate. The relative PPP implies that exchange rate should be adjustedΆe/e to the difference between two countries inflation rates. For example, a country with hyperinflation should encounter substantial depreciation in its currency. Empirical Support The Purchasing Power Parity states that relative price level is a fundamental determinant of exchange rate. An empirical test would like to see whether there is such a relationship in historical data. The PPP hypothesis has be enormously and extensively tested empirically by economists. The extensive tests by economists found very little empirical support to PPP. Exchange rate and the relative price level are unrelated in short run and medium run. In the long run, results found that exchange rate would converge to the theoretical equilibrium value from PPP, but at a very slow rate. At the first glace, PPP seems to be a too strict hypothesis that its assumption is unlikely to hold. In reality, there is transaction cost and barriers of trade. The general price levels indeed include non-tradable goods and different countries have different components in their general price level. These deviations of the theoretical PPP will cause the domestic price level and foreign price level not converges, but retain at some deviated level. Literature Review Officer (1982) contains a detailed summary on the theoretical and empirical works on PPP at early stage. Rogoff (1996) provides a more update survey on PPP and their empirical tests. Taylor Taylor (2004) uses more complete data and more powerful econometric tests, as they describe, retain similarly result as previous scholars. Monetary model As exchange rate is the relative price of two currencies, it is reasonable to consider the supply and demand of money be an important determinant of exchange rates. Introduction of money supply and money demand, two very fundamental macroeconomic variables, into our models The monetary approach rests on the quantity theory of money in macroeconomics. Firstly, Money supply (Ms) is a quantity determined by the central bank. In the quantity theory, money is for the purpose of medium of exchange. Money demand of an economy is directly proportional to the general price level and also the quantity of real output. For example, if the general price level is doubled, then the economy would need double amount of money for their transactions. The same idea holds for quantity of real output. Then, Md = kPy (4) Where Md is money demand, P is the price level, y is the real output and k is the velocity of money. In equilibrium, Money supply must be equal money demand, and so: Ms = kPy (5) By rearranging, we have P= Ms/ky (6) By this form, we can interpret that given a level of real output of the economy and a given level of money supply determined by the central bank, the price level of the economy will be adjusted to Ms/ky. Let * denotes the foreign currency variables. We assume the quantity theory of money holds true to foreign country also. We have Ms*= k*P*y* (7) The second important assumption of the monetary approach is that PPP holds true. The exchange rate always attains its PPP equilibrium level, as in (2). In the monetary approach, we have three relationships of variables now: the quantity money of home country, quantity money of foreign country, and PPP. Combining there three relationships and rearranging the three equations, we have: Ms/ ky = S Ms*/ k*y* (8) The quantity theory of money and PPP are two building blocks of the monetary approach. The PPP tells us that at the long run equilibrium, the exchange rate should be equal to the ratio of home and foreign price level. The quantity theory of money marcoeconomics describes that price level of a country is related to money supply of central bank and real output of the economy. Combining them, the monetary approach concluded that exchange is determined by domestic and foreign money supply (Ms Ms*), domestic and foreign real output (y y*), and domestic and foreign velocity of money(k k*). An important implication of the monetary approach is that central banks money supply policy would have primary impact to exchange rate. Start with the domestic central bank suddenly increase the money supply by a substantial amount, with all other domestic and foreign variables keep unchanged. The quantity theory of money implies that the rise of money supply without increase in real output will drives up the domestic price level, which means inflation also. The increase in domestic price level will induce domestic people to buy more foreign products and cause the exchange rate to depreciate. This is the same equilibrating mechanism described in PPP. We may consider the magnitude of depreciation of currency by increase of domestic money supply. According to equation (x), exchange rate, s, is directly proportional to Ms. So in the monetary approach, a given percentage increase in money supply will leads to the same percentage of depreciation of currency. A natural consequence of the above analysis is to see if foreign money supply would leads to what kind change of exchange rate. From equation (x), we can see that foreign money supply Ms* comes into determining the exchange rate. If the foreign central bank increase money supply, the foreign currency would depreciate as by our previous analysis. Then, in turn, the domestic currency would appreciate relatively. On the other hand, we may consider the effect of an increase in real output on exchange rate in the monetary approach. Given a fixed level of money supply, real output increase will leads to lowering price level, as described in the quantity theory of money. Then, on the open economy side, the exchange rate must appreciate, making the local products more expensive, to preserve the PPP equilibrium. So we can conclude that a rise in real output(GDP) will leads to appreciation of the domestic currency, given other thing else constant. Empirical Evidence The monetary approach is largely based on PPP. Given the failure of PPP on empirical testing, it is not difficult to imagine that empirical test on the monetary model of exchange rates should found little support. Extensive tests have been carried out to examine the relationship between exchange rate vs. money supply and exchange rate vs. real output. As representative, Frenkel (1976) and Meese Rogoff (1983) shows little empirical support on the Monetary approach. Literature review Johnson (1977) portrays a model treatment of the monetary model of exchange rates. Frenkel (1976) and Meese Rogoff (1983) are representative empirical works on the monetary approach. Portfolio Balance Model In the monetary model, the global economy is simplified as having goods and money only, and money is the medium of exchange to buy domestic and foreign goods. Exchange rates are determined by the relative demand and supply of money, domestic and foreign. The portfolio balance model takes a further step from the monetary model that there are investment assets in the global economy for people to hold. People would consider holding money, domestic assets and foreign assets alternatively on their portfolio balance. Then the relative demand and supply of these investment assets would determine the exchange rate. The portfolio balance model assumes there are three kinds of assets for people to allocate their total wealth: Domestic money (M), domestic bond (B), and foreign bond (FB). Domestic money (M), pays no interest, is a riskless asset. In term of finance, the risk-free rate is zero in this simplified model. Domestic bond and foreign bond are risky assets that payout with, with interest rate rand r* respectively. Then the actual interest rate individual receive from foreign bond is sr*. The portfolio balance model of exchange rate makes further assumption in line with modern portfolio theory. Domestic bond and foreign bond are not perfect substitutes. Holding domestic and foreign bond together in the portfolio would reduce the unsystematic risk. So people would not simply hold the bond with higher yield only, but hold a portfolio of domestic and foreign bonds. Moreover, the individuals, being are risk-averse and so they would hold some portion of riskless asset, the money. The individuals have a total wealth of W would decide how to allocate them into money, domestic bond and foreign bond respectively based on his risk preference and the returns of different assets, as in modern portfolio theory. He would purchase more of one asset if the return of the asset increase, or if the return of the alternative assets decrease. In summary, Demand of money = M(r, sr*) is decreasing in r and sr* Demand of domestic bond = B(r, sr*) is increasing in r and decreasing in sr*. Demand of foreign bond = FB(r, sr*) is increasing in sr* and decreasing in r. Total wealth, the supply of various assets, would equal to the demand of various assets., such that W = M(r, sr*) + B(r, sr*) + BF(r, sr*) (9) It means that, in equilibrium, there would be some equilibrium value of r, r* and s to balance demand and supply. To focus on the role of exchange rate in this model, we may consider r and r* as given to be stable by the bond markets and only the exchange rate varies. The equation above can be simplified as: W = M(s) + B(s) + BF(s) (10) Then, there will be a value of s to equalize the demand of various assets to total wealth. In other words, the exchange rate is determined by the equilibrium across the money, domestic bond and foreign bond markets in this portfolio balance model. Implications and evidence of portfolio balance model One of the most important implications from the portfolio balance model is that current account surplus will be associated with depreciation of currency. Current account surplus must be associated with capital account deficit, which means that the country is a net purchaser of foreign assets. The demand of foreign bond increase and so exchange rate would depreciate for the equilibrium in asset markets to restore. However, as noted by Copeland (2008), the tests of portfolio balance model, is far from satisfactory. Literature review Several articles by Branson propelled the portfolio balance model, and include empirical evidence also. Branson (1983) provides a good account of summary. Conclusions We have reviewed three different models on exchange rates. The PPP, the most fundamental one, claims that price level is the fundamental determinant of exchange rates in the long run. The market force of goods arbitrage would push the exchange rate to the equilibrium level that balance the purchasing power of the different currency to the same level. The monetary model incorporates the classical quantity theory of money in marcoeconomics with purchasing power parity. It predicts that money supply, determined by the central bank, and real output are the determinants of exchange rate. The third theory, the portfolio balance model extends the monetary model from considering the money market to the markets of a number of assets. Individuals demand each type of assets and exchange rate is determined as the equilibrium price of various asset markets. All of the models we discussed are laid on fundamental economic theory and are conceptually sound. Unfortunately, economists found little direct empirical support to these models. We should not consider rejecting these three models because of the lack of empirical support. Firstly, these three models are conceptually fundamental and shape our thinking in exchange rates. They will be extremely useful when we extend our analysis with specifications in further detail and seek more specific implications in exchange rate. Secondly, these models portray the long-run equilibrium behavior of the exchange market. It is difficult to consider the volatile, second-to-second changing exchange rate market behavior would be consistent with these models. There may exists random shocks to the exchange rate market that consistently propel the exchange rate to move in a random style and so the long-run equilibrium of the models cannot be attained.

Essays --

Many diverse cultures exist across the globe, differing in several aspects, such as beliefs, practices, and values. An example of two cultures that demonstrate dissimilar values are Ancient Anglo-Saxon and Ancient Mesopotamian. These two cultures are known to have expressed opposing heroic values. Two texts that can be accurately used in this comparison are Beowulf, an Ancient Anglo-Saxon text, and The Epic of Gilgamesh, an Ancient Mesopotamian text. Beowulf is among the earliest surviving works of literature. It was written in Old English and dates back sometime before the tenth century A.D. The poem is set in Scandinavia, and tells the story of the heroic warrior, Beowulf. Beowulf was the perfect hero. He fought for his people and defeated evil with his ability to bring on justice. Three of Beowulf’s traits that serve as evidence of this were his remarkable physical strength, his ability to put the well-being of others before his own well-being, and his courage. Beowulf was a true hero, in the eyes of many, through said traits. He fought a number of battles and was triumphant in all, except his last battle. Beowulf possessed the skills and power necessary to kill Grendel, the monster who had been terrorizing the Danes for over a decade, with his bare hands. While fighting, Beowulf detached Grendel’s arm from his shoulder, which was later hung up as a trophy. Beowulf eventually put an end to Grendel’s life, and naturally, Grendel’s mother had pursued Beowulf. Although Grendel’s mother was an even deadlier monster than her son, Beowulf once again proved his abilities by slaying her, as well. He slashed her neck with a sword that carried unbearable weight. Afterwards, he carried her head with only his own arms, while it took the a... ...concerns was fame. He only wanted to build his name. Another way in which Gilgamesh did not demonstrate the same heroic values as Beowulf is the fact that he was not fearless. He was afraid of his own death. We witnessed this after Enkidu died, when he set out on his journey to gain immortality. In both Ancient Anglo-Saxon and Ancient Mesopotamian cultures, works of literature portray heroes such Beowulf and Gilgamesh, and the heroic values that they possessed. The heroes, Beowulf and Gilgamesh, had both similar and dissimilar heroic values, however, Beowulf was by far a better hero than Gilgamesh. While Beowulf and Gilgamesh both possessed remarkable strength and courage, Beowulf was fearless and selfless, which makes him a true hero. After comparing the two texts, it is fair to say that Ancient Anglo-Saxons abide by stricter guidelines in terms of heroic values.

BOEING’s Strengths Analysis Essay

Strengths Implications 1. Highly Skilled Managers The operation of the company will run smoothly. The performance of the company will improve and would lead the company to be successful. 2. Provide global customer support It would serve the customers better and it would be very convenient to those customers in other countries to ask for help. This would help the company to gain a better image due to the provided services to help the customers. 3. Outsourcing It can save time for the company to manufacture or assembly its products. 4. Emphasizing the product quality The durability of the company could last long. It gives the company to have a durability image to the customers. Customers would likely be satisfied and the company could gain some customer loyalty. 5. Recognized market leader Customers would likely choose them first as their priority. 6. Strong brand name Customers would easily associate the product. The brand name is instilled in the mind of the customers. Then, customers would think that the product is of good quality and the product would be their major choice when purchasing. The company would be able to generate higher sales for having strong brand name. It also has more advantage than the competitors in many areas. 7. Joint ventures/ Alliances with other aircraft companies It would help the company lessen its burden on producing other parts of aircraft. It aids on making the production of aircraft faster with the service of another companies. It would make the aircraft production for two aircraft companies sharing ideas for the betterment of the aircraft. 8. Many Features This will give higher probability that the customer would buy the product because of the extra features. This is absolutely an advantage for the company. If passengers are satisfied by this aircraft most probably that the airline would buy again from the same company of aircraft gaining customer loyalty. Weaknesses Implications 1. Layoff technical workers It will consume lots of time to hire new workers and will spend lot of money to train them if there is a need to do so. In fact, hiring or choosing the right candidates is a critical operation of the company. This might threaten other workers for being the next candidate to be laid off. And this would lead to lower productivity. Mostly, new workers are to be oriented and supervised so it will take time. 2. Mismanagement of parts or raw materials When the parts are needed, they are mostly not available for the production process. Thus, while in process, a halt might happen. So, it is not efficient at all. 3. Conservative Company The company could not improve well on its system. It could not adapt to the changes in the environment that leads to failures. It believes that its system will work well when in fact there might be other effective ways. It might lose some opportunities that come its way. 4. High Production Cost It might lead to higher cost of product to be able to earn revenue. And it is not consistent to the goal of the customers. It might also lead to lower demand and lesser income. 5. Every 12 years of generating or launching a new aircraft design Competitors might be the first to launch new aircraft that threatens the company. And they might surpass the ability of the company in terms of generating sales. When the time the company launches the new aircraft, most airlines have already purchased the aircraft of its competitors so it would not need to purchase again. Opportunities Implications 1. Transferring technological know how to new products or business The company has lesser difficulties in operating the new acquired business for they are using the same method from their own company. This means that growth occur in the country. 2. Extend reputation to new geographic area The Boeing company not only would want their domestic country know them but also to other geographic areas. As of now, airlines are more familiar with Boeing than its competitors. 3. Acquisition of rival aircraft company It means that there would be fewer competitors. It would also strengthen the system of the company. Because of involvement of more employees. These employees would contribute knowledge and expertise to help the company grow. New way of running the business may supplement in the development of the company. I’m one way or another; it serves its purpose of improvement. 4. Expanding the company’s product line to meet a broader range of customer needs The company may gain advantage on investing in a different product line. Facing new competitors would be a challenge on the part of the company. There might be opportunities waiting for the company. It is also an additional income for the company if it becomes successful. And to meet the needs of the customers by providing new products would lead to an aggressive and healthy competition. It also helps build the economy of the country if there is new development in companies. And it also leads to high employment because there’s a need to hire more employees to implement the new business activities. Threats Implications 1. Competitor The competitor might out beat them and threat is higher for their market share. Lack of planning would have big impact to the company. They should anticipate for the rivalry between them. Timing and being competitive is important. If they are not met, this would incur loss in the  company. 2. Trade Barriers They may encounter difficulties in the regulation regarding aircraft imposed by the country to which they import their products to. They may also need documents before releasing or create an aircraft. 3. Deregulation of Airlines The regulation of the company for its customers would compromise in order to gain favor of the customers. This may affect the standard operation of the company and may also result to disorganized process of company operation. 4. Terrorist Attack The horrible incident of 9/11 may also be a cause of not buying another aircraft. People of that country would not want to travel because they are threat by the terrorist attack. It would results to decrease the people who are traveling and lead the airline customers freeze to buy aircraft, since the people who travel has been reduced. 5. Supply and demand for the aircraft The more people that are not traveling, the more chances that the airline industry won’t buy new airplanes. This may results to low demand.

Monetary policy

However, share of total employment is still low due to the fact that numbers of Australians work in the services sector. The rate of unemployment rate was also misleading due to the assumption of that paid work of one hour a week means the persons is classified as â€Å"employed† (Henry Thornton, 2013 ). Employment in manufacturing has been declining dramatically (Appendix 10) and the total number of manufacturing Job losses under the Rued and Gaillardia Governments to 143,300. (Sophie Memorable, 2012) Besides, the high exchange rate of Australia due to mining boom make the export sees competitive and make it costly for foreign company to purchase.The industry other than mining such as manufacturing, tourism and overseas enrolment in Australia has experienced significantly reduced in export income. There's an analysis from the Australia Institute that state out the country's farmers have lost $43. 5 billion in export income since the mining boom pushed the Australian dollar to historic highs, suffering a 41 per cent drop in export earnings since the boom began (The Australian Institute, 2013). The manufacturing index slumped 6. 9 points 40. 3, the stakes reading since June 2009 and fifth drop in six months (SMS, 2012).A depreciation of ADD is likely to put upward pressure on the rate of inflation. A lower dollar increases the price paid on imports, leading to an increase in imported inflation. The mining boom which is cooling has contributed to the depreciated ADD and caused Australia in a dangerous position and struggling and expecting a recession (Henry Thornton, 2013). Implication for Monetary and Fiscal Policy The Australian Dollar has rising over decades not only because of economic boom, but also thank to the effort of Australian government on monetary policy.During Global Financial Crisis, many countries all around the world has suffered in economic growth. However, Australia has done pretty well and has indirectly contribute to the rising of ADD. This is due to ARAB significantly increased of Aggregate Exchange Settlement (SE) balances to a peak of $1 Billion, which usually runs at $1 billion. As the economy enters a â€Å"Systemic Liquidity Stage,† the central banks become the â€Å"lender of last resort† (LOUR), this provided banks liquidity to support themselves in a period of tough financial condition (Varian Chafer, 2009).Over the course of the cuisines cycle, the ARAB continually tighten and loosen monetary policy in order to prevent inflation spilling over it's 2-3% average target range. (Appendix 11). The inflation target is the main guide for monetary policy decisions, and achieving that goal takes priority over other goals. The reason why Australia government want to keep inflation rate low is to stabilize the real income, drive up the economy and enhance country's competitiveness (RUG Barron, 2013). In terms of fiscal policy, government under Gaillardia has failed to perform it well.Competitiveness of Australia's on-mining sectors has slumping due to high company income tax (30%) as compared to other Asian competitor, for example, Singapore (15%) and government did not spent money wisely on infrastructure which would attract investor. In my own opinion, Australians new government under Tony Abbott should cut down the taxes from income. The action mentioned earlier can boost up the amount of the participation of labor force in Australia. When the worker knows that they are going to have a great earning on their real income, more of them are willing to come out to work in different industry.Appendix 12 shows increased in labor supply (supply rev moves to right) when there's tax cut. This is following by the increase in Real Gross Domestic Product. When more labor is involve in an industry, more output is produced and leads to increase in GAP Appendix 13. Besides, government should spend more on infrastructure, introducing new technology facilitating investment to attract the inv estor from foreign country to invest in Australia to increase Aggregate supply and contributes to higher GAP. Appendix 2 Appendix 3 Appendix 4 Appendix 5 Appendix 6 Appendix 7 Appendix 8 Appendix 9 Appendix 10 Appendix 1 Appendix 12 Appendix 13 Monetary Policy 2. Some economists suspect that one of the reasons that economies in developing countries grow so slowly is that they do not have well-developed financial markets. Does this argument make sense? Yes it does make sense since the financial markets have a big role in a country’s economy and has a greater affect on it if it’s working well or not (channeling the funds to people who will use them efficiently and productively).When a country works its financial markets in an efficient way (having the right investments, having enough money supply to better develop the country with its education, health, and infrastructure, and also enough to give for entrepreneurs to help develop the country, etc. ) it will defiantly affect the country positively and result in having a faster developing country. 4. If you suspect that a company will go bankrupt next year, which would you rather hold, bonds issued by the company or equities issued by the company? Why?I would rather hold bonds th an equities because a company will pay whatever left of their assets to their bondholders before their shareholders since bonds are forms of debt; therefor bondholders have claim on a company’s assets before shareholders (owners). 11. How can the adverse selection problem explain why you are more likely to make a loan to a family member than to a stranger? Adverse selection is the problem created by asymmetric information (when one party doesn’t have enough information about the other party to make an accurate decision) before the transaction of a loan occurs.So making a loan with a family member is better, or most likely to occur, rather than with a stranger because one will have more information available (knowing their honesty, risk tolerance and more, and also easier contact) with a family member than a stranger, which will help him/her (the lender) avoid the adverse selection problem. 16. â€Å"In a world without information costs and transaction costs, financial intermediaries would not exist† Is this statement true, false, or uncertain? Explain your answer. Uncertain.Information costs and transaction costs are two of the main reasons why financial intermediaries exist, so if these two costs fall, people will lend and borrow at zero cost and so they won’t be needing any financial intermediary. Nonetheless, financial intermediaries do have other functions such as enhancing individual and national income through interest or dividend on the lender’s surplus fund. Enhancing the GDP of a country through using the funds in a more productive way. They create capital for the country through the savings flow they receive.They help determine the price of traded financial assets through buyers and sellers, and based on the demand and supply. They also provide a sign for the allocation of funds. And finally they provide selling mechanism on financial asset to offer the benefit of marketability and liquidity of such assets. | 17. Wh y might you be willing to make a loan to your neighbor by putting funds in a savings account earning a 5% interest rate at the bank and having the bank lend her the funds at a 10% interest rate rather than lend her the funds yourself? To avoid asymmetric information (adverse selection and moral hazard) and to decrease transaction cost.Putting funds in a bank has no risk and not let one worry about having enough information about his/her neighbor (asymmetric information). If for example I lend my neighbor $100 and the chances for him/her to pay me back were 50%, then my expected return would be $55 [100* (1+10%)*50% + 0*50%]. But if I deposited my funds in a saving account, my expected return would be $105 [100*(1+5%)]. And that is because banks as intermediaries are more capable on providing better-expected return by diversifying their risk. Banks also have better resources on monitoring their borrowers actions; therefor they can avoid the asymmetric information problems. Monetary policy However, share of total employment is still low due to the fact that numbers of Australians work in the services sector. The rate of unemployment rate was also misleading due to the assumption of that paid work of one hour a week means the persons is classified as â€Å"employed† (Henry Thornton, 2013 ). Employment in manufacturing has been declining dramatically (Appendix 10) and the total number of manufacturing Job losses under the Rued and Gaillardia Governments to 143,300. (Sophie Memorable, 2012) Besides, the high exchange rate of Australia due to mining boom make the export sees competitive and make it costly for foreign company to purchase.The industry other than mining such as manufacturing, tourism and overseas enrolment in Australia has experienced significantly reduced in export income. There's an analysis from the Australia Institute that state out the country's farmers have lost $43. 5 billion in export income since the mining boom pushed the Australian dollar to historic highs, suffering a 41 per cent drop in export earnings since the boom began (The Australian Institute, 2013). The manufacturing index slumped 6. 9 points 40. 3, the stakes reading since June 2009 and fifth drop in six months (SMS, 2012).A depreciation of ADD is likely to put upward pressure on the rate of inflation. A lower dollar increases the price paid on imports, leading to an increase in imported inflation. The mining boom which is cooling has contributed to the depreciated ADD and caused Australia in a dangerous position and struggling and expecting a recession (Henry Thornton, 2013). Implication for Monetary and Fiscal Policy The Australian Dollar has rising over decades not only because of economic boom, but also thank to the effort of Australian government on monetary policy.During Global Financial Crisis, many countries all around the world has suffered in economic growth. However, Australia has done pretty well and has indirectly contribute to the rising of ADD. This is due to ARAB significantly increased of Aggregate Exchange Settlement (SE) balances to a peak of $1 Billion, which usually runs at $1 billion. As the economy enters a â€Å"Systemic Liquidity Stage,† the central banks become the â€Å"lender of last resort† (LOUR), this provided banks liquidity to support themselves in a period of tough financial condition (Varian Chafer, 2009).Over the course of the cuisines cycle, the ARAB continually tighten and loosen monetary policy in order to prevent inflation spilling over it's 2-3% average target range. (Appendix 11). The inflation target is the main guide for monetary policy decisions, and achieving that goal takes priority over other goals. The reason why Australia government want to keep inflation rate low is to stabilize the real income, drive up the economy and enhance country's competitiveness (RUG Barron, 2013). In terms of fiscal policy, government under Gaillardia has failed to perform it well.Competitiveness of Australia's on-mining sectors has slumping due to high company income tax (30%) as compared to other Asian competitor, for example, Singapore (15%) and government did not spent money wisely on infrastructure which would attract investor. In my own opinion, Australians new government under Tony Abbott should cut down the taxes from income. The action mentioned earlier can boost up the amount of the participation of labor force in Australia. When the worker knows that they are going to have a great earning on their real income, more of them are willing to come out to work in different industry.Appendix 12 shows increased in labor supply (supply rev moves to right) when there's tax cut. This is following by the increase in Real Gross Domestic Product. When more labor is involve in an industry, more output is produced and leads to increase in GAP Appendix 13. Besides, government should spend more on infrastructure, introducing new technology facilitating investment to attract the inv estor from foreign country to invest in Australia to increase Aggregate supply and contributes to higher GAP. Appendix 2 Appendix 3 Appendix 4 Appendix 5 Appendix 6 Appendix 7 Appendix 8 Appendix 9 Appendix 10 Appendix 1 Appendix 12 Appendix 13 Monetary Policy 2. Some economists suspect that one of the reasons that economies in developing countries grow so slowly is that they do not have well-developed financial markets. Does this argument make sense? Yes it does make sense since the financial markets have a big role in a country’s economy and has a greater affect on it if it’s working well or not (channeling the funds to people who will use them efficiently and productively).When a country works its financial markets in an efficient way (having the right investments, having enough money supply to better develop the country with its education, health, and infrastructure, and also enough to give for entrepreneurs to help develop the country, etc. ) it will defiantly affect the country positively and result in having a faster developing country. 4. If you suspect that a company will go bankrupt next year, which would you rather hold, bonds issued by the company or equities issued by the company? Why?I would rather hold bonds th an equities because a company will pay whatever left of their assets to their bondholders before their shareholders since bonds are forms of debt; therefor bondholders have claim on a company’s assets before shareholders (owners). 11. How can the adverse selection problem explain why you are more likely to make a loan to a family member than to a stranger? Adverse selection is the problem created by asymmetric information (when one party doesn’t have enough information about the other party to make an accurate decision) before the transaction of a loan occurs.So making a loan with a family member is better, or most likely to occur, rather than with a stranger because one will have more information available (knowing their honesty, risk tolerance and more, and also easier contact) with a family member than a stranger, which will help him/her (the lender) avoid the adverse selection problem. 16. â€Å"In a world without information costs and transaction costs, financial intermediaries would not exist† Is this statement true, false, or uncertain? Explain your answer. Uncertain.Information costs and transaction costs are two of the main reasons why financial intermediaries exist, so if these two costs fall, people will lend and borrow at zero cost and so they won’t be needing any financial intermediary. Nonetheless, financial intermediaries do have other functions such as enhancing individual and national income through interest or dividend on the lender’s surplus fund. Enhancing the GDP of a country through using the funds in a more productive way. They create capital for the country through the savings flow they receive.They help determine the price of traded financial assets through buyers and sellers, and based on the demand and supply. They also provide a sign for the allocation of funds. And finally they provide selling mechanism on financial asset to offer the benefit of marketability and liquidity of such assets. | 17. Wh y might you be willing to make a loan to your neighbor by putting funds in a savings account earning a 5% interest rate at the bank and having the bank lend her the funds at a 10% interest rate rather than lend her the funds yourself? To avoid asymmetric information (adverse selection and moral hazard) and to decrease transaction cost.Putting funds in a bank has no risk and not let one worry about having enough information about his/her neighbor (asymmetric information). If for example I lend my neighbor $100 and the chances for him/her to pay me back were 50%, then my expected return would be $55 [100* (1+10%)*50% + 0*50%]. But if I deposited my funds in a saving account, my expected return would be $105 [100*(1+5%)]. And that is because banks as intermediaries are more capable on providing better-expected return by diversifying their risk. Banks also have better resources on monitoring their borrowers actions; therefor they can avoid the asymmetric information problems.