Source : http://www.myfoxatlanta.com/dpp/news/local_news/Bartering-Sees-Comeback-with-Businesses-20110511-am-sd
Summary:"
The article above highlights the revival of the traditional barter system on the market. Many small businesses are using the bartering system to accumulate profits and to combat the economy. One business owner Joe Cox was quoted saying "I get all my landscaping done, painting at my shop, gutters, dental care, I get all my basic necessities - prescription glasses." which he trades in exchange for his services and most experts say the key to bartering is finding the right network, skills, products and services.
Connections:
We covered the barter system in the chapter and it is a method of exchange by which goods or services are directly exchanged for other goods or services without using a medium for exchange such as money. Money was created and used because it was more convenient and is kept afloat because of its perceived value. In the article people have replaced money by exchanging their services and products because it reaps more benefits then using currency.
Reflection:
Although the bartering system is a great alternative, money is more practical in many situations in developed nations because it is divisible, durable, has value, etc. Having a bartering system in a complex economy is difficult and is not useful in many situations. There are people who use bartering system to escape taxes because it is not traceable.
Friday, June 17, 2011
Saturday, June 11, 2011
Great Depression vs Current Depression
Great Depression Vs Current Recession
Questions:
1. How did the Great Depression start?
The Great Depression started in the US when the stock prices fell on September 4th, 1929 and contributed to the crash on October 29th, 1929 also known as Black Tuesday.
2. How did the current recession start?
The recession started because consumer spending slowed down which resulted in a decrease in GDP, this is because our economy is largely driven by consumerism. The reason consumer spending slowed was because banks were lending money to people regardless of their credits and interests rates were very high. Also demand in housing properties increased because of high liquidity and low interest rates on mortgage loans. Prices increased and house owner swanted refinance at lower interest rates.
3. How did the government take part following the event? Were /are they successful attempts?
The Gov't took part in the great depression by introducing employment programs to employ the people who lost their jobs during the depression, they increased interest rates to keep the US dollar up but there was not much they could do. In the current recession the US Gov't gave bail-outs to several large companies like AIG, GM, Chrsysler. The Lehman Brothers weren't given bailouts and became bankrupt
4. What factors are present now that were not present during the Great Depression? (ie. Banking, online resources, etc.)
Some factors that are present now that were not during the depression are debit cards and online banking which has made banking and withdrawing your money a lot easier through ATMs, etc. There are also credit cards which lets you use money with high rates, however this can be dangerous because people may not be able to pay back the money they owe.
5. How did these two affect United States’ GDP?
In the Great Depression and the current recession the US GDP dropped dramatically and in the 1920s the US GDP peaked around 1$ trillion dollars. During the depression the dollar decreased and people lost their jobs. Because of this the US lost over $400 billion and the same situation although less severe happened during the recession.
6. Reflection: In your own words, tell me which one has made more of an impact on the world.
The Great Depression made a greater impact on the world because it had never been seen before and it taught people how to respond to a depression. As time passed the world learned how to deal with it and prepare themselves incase it happened again. I believe that we are more educated and knowledgeable now then ever before.
Questions:
1. How did the Great Depression start?
The Great Depression started in the US when the stock prices fell on September 4th, 1929 and contributed to the crash on October 29th, 1929 also known as Black Tuesday.
2. How did the current recession start?
The recession started because consumer spending slowed down which resulted in a decrease in GDP, this is because our economy is largely driven by consumerism. The reason consumer spending slowed was because banks were lending money to people regardless of their credits and interests rates were very high. Also demand in housing properties increased because of high liquidity and low interest rates on mortgage loans. Prices increased and house owner swanted refinance at lower interest rates.
3. How did the government take part following the event? Were /are they successful attempts?
The Gov't took part in the great depression by introducing employment programs to employ the people who lost their jobs during the depression, they increased interest rates to keep the US dollar up but there was not much they could do. In the current recession the US Gov't gave bail-outs to several large companies like AIG, GM, Chrsysler. The Lehman Brothers weren't given bailouts and became bankrupt
4. What factors are present now that were not present during the Great Depression? (ie. Banking, online resources, etc.)
Some factors that are present now that were not during the depression are debit cards and online banking which has made banking and withdrawing your money a lot easier through ATMs, etc. There are also credit cards which lets you use money with high rates, however this can be dangerous because people may not be able to pay back the money they owe.
5. How did these two affect United States’ GDP?
In the Great Depression and the current recession the US GDP dropped dramatically and in the 1920s the US GDP peaked around 1$ trillion dollars. During the depression the dollar decreased and people lost their jobs. Because of this the US lost over $400 billion and the same situation although less severe happened during the recession.
6. Reflection: In your own words, tell me which one has made more of an impact on the world.
The Great Depression made a greater impact on the world because it had never been seen before and it taught people how to respond to a depression. As time passed the world learned how to deal with it and prepare themselves incase it happened again. I believe that we are more educated and knowledgeable now then ever before.
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