Question.3117 - HOW MANY WORDS EACH Journal Entries: The purpose of journal entries is for the instructor to “touch base” with the students. These will be submitted under Assignments on D2L. They should be short and contain the following information. 1. Explain and “relate to the real world” a key concept you learned that week. 2. What difficulties are you experiencing with this class? What is going well? 3. What suggestions do you have for improving the class or the presentation of the material? Given the role of savings and investment in economic growth, how should this impact our behavior? Why do some poorer nations (ie. India or China) have higher savings rates than the U.S.? What public policies do we currently have in place to encourage or discourage saving money?
Answer Below:
Question 1: Explain and “relate to the real world” a key concept you learned that week. Answer: Comparative advantage is simply ability of a firm or individual to produce goods and services at a lower opportunity cost than other firms or individuals. Question 2: What difficulties are you experiencing with this class? What is going well? Answer: The difficulty with the class is the number of students, which is comparatively higher than any other subject. I believe this can be split into two sections. What is going well is the speed at which the syllabus is being completed as this shall give us enough time to understand and read the same concepts though other writers and relate to real world examples. Question 3: What suggestions do you have for improving the class or the presentation of the material? Answer: The presentation can be improved by giving more charts and diagrams in the content. As they can give a direct impact of what a reading of several lines gives. Role of savings and investment: The idea behind savings and investment is that higher savings leads to higher investment. Higher Investment leads to expansion of the production capacity of the country which leads the country to produce more goods and services. This shall also lead to higher employment which in turn shall lead to improvement in the standard of living of the population. As a result, what we should tend to do is focus on the savings part from our income. We should try to spend less and save more which shall eventually lead to higher investment. The issue with us is that we are higher on the expenditure side and sometimes even spend much more than our current income based on the projection of our future income, which shall again lead to fewer saving in the future. So our behaviour should be inclined towards more of savings than on expenditure. The savings rate is much higher in the poorer nations such as India and China as compared to US. The savings rate stood around 30% for India and around 54% in China for 2012. While for US the same stands at around 2.4% for 2013. The reason behind this is the traditional habit of the people of China and India to save more and spend less. Also the country’s trade policies are comparatively strict and focus much more on the current account surplus. Also, many Chinese fear that their country will grow old before it grows rich, as a result, precautionary motives may continue to fuel household savings as a share of disposable income in the years to come. This can also be well related to the behaviour of the people overall in the country. People in US tend to spend more which people in poorer countries tend to spend less and save more for their old age (as their old age provisions form the government are not as strong as in the developed nation such as US). In order to increase the savings rates, US is currently focusing on more on the tax codes, educating young kids to save more right from the initial stages of life, encouraging the workers to save more etc. Source: India Saving rate: http://timesofindia.indiatimes.com/business/india-business/Savings-rate-to- dip-to-30-this-fiscal-India-Ratings/articleshow/18387702.cms China Saving rate: http://www.wantchinatimes.com/news-subclass- cnt.aspx?id=20130115000022&cid=1202 US Saving rate: http://www.csmonitor.com/Business/Stefan-Karlsson/2013/0301/US- savings-rate-falls-to-housing-bubble-lowsMore Articles From Economics
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