UK Economy and Disposable Spending

UK Economy and Disposable Spending 1. Definitions in the United Kingdom economy: a) Real disposable income: Real disposable income is an economic indicator which is the personal income that households remained with after government charges and income taxes were paid, also after it was adjusted for changes in prices or for inflation. This available income can either be spent or saved by households. According to the Keynesian theory of consumption, there is a link between real disposable income and consumption level as well as savings. In the UK economy, real disposable income witnessed ups and downs since the financial crisis of 2008, in 2010 it decreased by 0.8% while in 2011 it decreased by 2.0%. One of the main reasons for this declining real disposable income is due to inflation and the rising prices of commodity goods as well as the VAT increase. b) Unsecured debt: Unsecured debt refers to a loan that is not backed by an asset, in this case if someone is not able to repay the money owned from a financial institution they won’t take any of his property since they do have the right to. Some of the unsecured debts include credit cards, student loans and medical bills. It is considered of high risk for lenders, when the borrower fails to make the full repayment they might have to go through the process of suing them in order to get their money back. Unsecured debt is the opposite of secured debt for instance, a house mortgage is backed and secured by the house and when someone fails to pay the lenders they can close it and take it. In the UK economy, in 2013 the UK witnessed its first increase in unsecured debt since the financial crisis of 2008 by 8.5 billion pounds as a result of the increasing student loans. In the other hand unsecured consumer debt stayed flat at 5,900 pounds per household. c) Real interest rate: The real interest rate is the rate that is expected to be received by investors after removing inflation effects Real interest rate is linked with nominal rate and inflation rate as it is calculated as the following: Real interest rate = Nominal interest rate – Inflation rate In the UK economy, the real interest rate remained low since the financial crisis, after 2008 it decreased from 1.4% to -1.6% in 2009, it continued in decreasing to -2.5% in 2010, while it increased from 2010 to 2012 up to -1.2% as the following graph shows: d) Durable goods: Durable goods are goods that last for a long period of time and have a useful life of at least three years. Goods that are purchased and consumed in short period of time are called non-durable goods such as medicine or food. Durable goods are goods that they don’t need to be bought frequently. Examples of durable goods are: furniture, cars, jewelry, appliances, and also on heavy assets such as airplanes or ships. In the UK economy, according to Chart C UK consumers spending on durable goods increased dramatically from 2004 to 2010. According to the Bank of England consumer spending on durable goods increased by 2.1% from 2012 to the first quarter of 2013 these spending were mostly on motor cars, appliances and clothes. The following chart displays the components of UK consumer spending on durable goods: e) Animal spirits: Animal spirit is a concept developed by John Maynard Keynesthat refers to the level of consumer confidence and its effect on the economy. It is future expectations that drive the consumers to either spend or save and the willingness of businesses to invest in a certain market. In the UK economy, consumer confidence and optimism about the future of the UK economy has been increasing dramatically over the 4 last years, from 2011 at -30% to 0% in 2014 as the following graph shows: This increase was generally due to improvements in purchasing power and increased job security. In the UK, consumer confidence is related to consumption and it is used to predict future consumption. 2. What is the relationship in normal times between real disposable income and the level of household consumption? In normal times when there is economic stability and a higher consumer confidence the relationship expected between real disposable income and the level of household consumption is that when the real disposable income increases the level of household consumption increases, also when consumer’s income gets higher they tend to save less and consume more of goods they want. When the real disposable income decreases the level of household consumption decreases since consumers tend to save more and consume only priority goods. 3. Identify and explain two non-income determinants of the level of consumer spending in the UK economy: One of the non-income determinants of the level of consumption in the UK context is consumer confidence. According to chart B when consumer confidence decreases due to reasons such as that consumers are feeling unsecure about their jobs, the attempts to make major purchases decreases as well the thing that results in high savings since consumers are not optimistic about their current economy. There is a clear impact of consumer confidence on consumption levels in the UK economy, when confidence increases consumers will make more major purchases and will save less. Another non-income determinant of the level of consumption in the UK economy is interest rate, when interest rate decreases people tend to borrow more money from banks to spend which results in higher consumption, when interest rate increases it becomes expensive to borrow money the thing that increases saving, people will leave their money in banks to take advantage of the high interest rate the thing that reduces consumption. 4. Identify and explain two macro-economic consequences of a sharp fall in consumer spending in the UK economy: A sharp fall in consumer spending can have a negative impact over the UK economy since it increases unemployment and decreases output levels. When consumer spending fall, the consumption of goods produced by firms will also fall, this can lower companies benefits and increases their costs, in order to lower costs they companies will reduce the number of their employees the thing that increases unemployment. Another issue caused by a decrease in consumer spending is a decrease in the quantity and quality of output. A decrease in consumer spending decreases demand the thing that lowers the willingness of firms to invest in capital and labor to produce efficiently and effectively. When demand decreases the output decreases resulting in less goods and services produced the thing that harms the economy of the UK by slowing it down. Deflation can also be a consequence of a sharp fall in consumer spending. Less consumer spending means less demand of firms’ products and services, firms will have to sell products to generate money in order to pay their fixed costs, as a result prices go  down and demand also go down even more since consumers are expecting prices to decrease more in the future. A sharp fall in consumer demand creates a vicious circle and less money circulation in the economy which is considered very damaging the economy. 5. Components of aggregate demand in Morocco: Consumer spending on durable goods in Morocco: 6. Extract one: The Moroccan families spending power increased over the last years according to statistics in 2011 there was an increase in spending per capita by 4.1% to $1,760, this increase is due a stable inflation rate and government subsidies on commodity goods. This increase in spending will increase consumption of goods and services and businesses will make more investments which will contribute positively in increasing the GDP which result in an increased economic growth. Extract Two: Moroccan secured debt is low and limited only for trustworthy clients with that are employed and with an income who are able to make the repayment. The number of Moroccan facing negative equity is considered very low. 6. In the Moroccan economy: a) Real disposable income: The real disposable income in morocco witnessed a continuous increase over the last 4 years from 62,096 million dollars in 2010 up to 075,937.1 million dollars in 2014. This increase in real disposable income is due to human development projects and investments on infrastructure. This increase also allowed Moroccan consumers to purchase products that were some years earlier categorized as luxurious. b) Unsecured Debt: According to the World Bank, the rate of unsecured debt in morocco is low; the majority of financial institutions are providing secured loans with a few exceptions of unsecured loans that are only given to trustworthy clients while the secured loans are given employed people with income also to businesses with strong investments. c) Real Interest Rate: According to the available data from year 2000 to 2005 the real interest rate is considered high in Morocco. The real interest rate witnessed a continuous decrease from a value of 14% in 2000 to 9.89% in 2005. In the recent years the real interest rate is increasing as the household income increases to encourage savings in banks. d) Durable Goods: Moroccan consumption of durable goods has increased over the last years due to access to loans such as for cars and houses, also to the increase in disposable income, as well as the increased consumer confidence. The next graph shows the consumer spending in morocco on goods and services including durable goods which shows that the Moroccan consumer spending increased from 472938 million dirham in 2001 up to 494499 million dirham in 2012. d) Animal Spirits: Consumer confidence is considered high in Morocco despite the decrease from 84.5 in 2011 to 74.10 in 2014. Consumer confidence is high since Moroccan consumers are showing optimism about regular income, stock market, employment and the overall state of the economy.However the recent decrease in consumer confidence is due to increased prices in commodity goods by the government such as fuel. Extract one: The Moroccan families spending power increased over the last years according to statistics in 2011 there was an increase in spending per capita by 4.1% to $1,760, this increase is due a stable inflation rate and government subsiding commodity goods This increase in spending will increase consumption of goods and services and businesses will make more investments which will contribute positively in increasing the GDP and the economic growth. Extract Two: Moroccan secured debt is low and limited only for trustworthy clients with that are employed and with an income who are able to make the repayment. The number of Moroccan facing negative equity is considered very low. What is the relationship in normal times between real disposable income and the level of household consumption? In normal times in Morocco, the expected relationship between real disposable income and the level of household consumptions is that when real disposable goes up the level of household consumption goes up as well meaning that when the disposable income increases Moroccan consumers save less and spending more. When real disposable income goes down the level of household consumption goes down as well increasing savings and lowering consumption. Identify and explain two non-income determinants of the level of consumer spending in the Moroccan economy In the Moroccan economy, people’s expectation is a non-income determinant of the level of consumption. People’s expectations about the future have an impact over consumption, when consumers except products prices to increase in the future they consume more in the present. Avoiding a rise in prices or inflation in the future increases the level of consumption in Morocco. Another non-income determinant of the level of consumption is changes in consumer’s preferences and taste which also manipulates the consumption level in the Moroccan economy The level of consumption in morocco can also be affected by demographic reasons. A young population increases the consumption, for example, young families increase consumption by buying durable goods such as furniture, appliances or cars, also the larger the family members the higher the consumption. Interest rate and consumer confidence also have an impact on the Moroccan economy similarly to the UK economy. Identify and explain two macro-economic consequences of a sharp fall in consumer spending in the UK economy Similarly to the UK, morocco can also suffer from high unemployment as a result of a sharp fall in consumer spending; firms will seek to cut down their costs by reducing the number of their employees which increase the unemployment rate in the Moroccan economy. Firms will also produce less goods and services as demand is low, investments will also decrease resulting in a lower GDP and lower economic development. 7. Comparison between the Moroccan and UK economies: From the previous analysis we conclude that, the Moroccan real disposable income increased over the years while the UK disposable income decreased due inflation. The unsecured debt in the UK is higher that unsecured debt in morocco. The real interest rate in morocco is higher than in UK. The consumption of durable goods increased in both countries. Consumer confidence is high in morocco but decreasing over time while in the UK is low but recovering. In both countries, an increase in real disposable income increases consumption level and a decrease in real disposable income decreases consumption level. Interest rate, consumer confidence, expectations, changes in preferences and taste are non-income determinants of consumer spending in both countries. Unemployment, deflation, decrease in level of output are common consequences of a sharp fall in consumer spending in both countries.

American Literature Essay

American literature traces back to the time of the Native Americans and Puritans, and over time developed many literary movements influenced by Transcendentalists and Realists. The beliefs of the Native Americans and Puritans as well as the philosophy of the Transcendentalists and Realists contrast with one another. These four major groups of American writers all differ in the sense that all of them look to a different power head or ideology for truth. For example, Native Americans look outside themselves to nature; while Puritans look to God, and Transcendentalists look within themselves; whereas realists question whether there is truth. The Native Americans have enriched our history of American literature with their stories and songs that depict their nature oriented beliefs. The Native Americans were polytheistic, meaning they believed in multiple gods. The gods they worshiped were all elements of nature such as the sun, the sky, and the earth. Look more:  irony in huckleberry finn essay The Indians had a strong spiritual connection with nature which is shown quintessentially in a Native American piece, Song of the Sky Loom, when the poem reads, â€Å"Oh Mother Earth, oh Father Sky, your children are we† (Tewa 34). The Indians believed without qualms that the truth is found in nature, which differed greatly with another group of American writers that became very popular in this time. The Puritans had a very strict religious ideology, and only looked to one place for truth; God. Unlike the Native Americans, the Puritans were monotheistic, in other words they only believed in one god. The structure of their life and their actions all revolved around the word of the bible. The Puritans believe that God is the creator of everything and therefor legislated by his law making Puritans very strict, moralistic, and conservative. Puritans looked to God for truth and faith which is expressed when a Puritan poet writes, â€Å"And when I could no longer look, I blest His name that gave and took, that laid my goods now in the dust† (Bradstreet 141), showing her devotion and respect towards God. Further down the road in American literature, a new philosophy was developed with a liberating idea of truth. The idea that truth can be found not outside of man, as other groups of writers suggest, but within man, had evolved. This idea is called Transcendentalism and it emphasizes the idea that truth is found in man’s own thoughts and intuition. Transcendentalists stress individualism and self- reliance while straying away from the desire for material things. They are religious; however, do not find it necessary to worship instead just stay in tune with one’s introspective thoughts and nature. Walt Whitman, a famous transcendentalist poet, wrote, â€Å"I celebrate myself, and what I assume you shall assume, for every atom belonging to me as good belongs to you† (Whitman 400), showing that every person is an individual but is also unified with the world and nature. Realists conceptualize their beliefs through questioning whether we can even find truth. Realists tend to try and dig beneath the facades that society so blindly accepts. One of the key strategies realists use to enable readers to question the truth is satire. Mark Twain was a famous Realist writer in early American literature that became very famous for using satire in his novels. Twain used satire to poke fun at social norms, potentially giving readers a new perception of the social normality people succumb to. Mark Twain’s famous novel, the Adventures of Huckleberry Finn consists of several uses of satire, for example, when the main character of the novel responds to a women’s lecture on heaven by saying, â€Å"Well, I couldn’t see no advantage in going where she’s going so I made up my mind I wouldn’t try for it.† (Twain 12). This quote allows readers think of religion less seriously and question whether it is even a place worth striving to get to. Although Native Americans, Puritans, Transcendentalists, and Realists differentiate from each other, they all embellish American literature with a wide range of ideologies and point of views towards where to seek truth. This variety allows readers to develop their own individual thought and conceptualize where they can also find truth.

American Dream or American Nightmare – Essay

American Dream or American Nightmare America and its people have upheld the concept of the â€Å"American Dream. † The meaning of this concept has changed and altered throughout the years. As stated in the Declaration of Independence, every man has the right to life, liberty, and the pursuit of happiness. Multitudes of movies and books have depicted their personal versions of this single ideology. All having a stereo typical, happily ever after ending, but is this so-called dream even possible. I believe the American Dream is slowly dying out. In today’s society, families are struggling to make ends meet, and to ensure a good future for their children. Once upon a time the American Dream was everyone’s reality; however now this fantasy is just that, a far off fairytale, as families fight just to provide basic living needs. â€Å"A family of four earning $22,050 a year is living below the federal poverty line (Huffman). † According to this quote a salary of $22,050 a year can barely manage to keep up with the livelihood of a family of four; whereas an income of that amount ten years ago would have placed families in the middle class bracket. Over the years American household living costs have greatly increased, causing family to sink lower on the economic level. With monthly bills such as utilities, rent/house payment, groceries, and car payments, and average American family can find themselves in debt quickly. The basic American Dream boasts of prosperity and wealth. In actuality, Americans are realizing the difficulties of being financially secure every month. It doesn’t stop there. To make things more difficult, parents must worry about being able to guarantee a decent future for their children. Even though public schooling is free for kids, they have other necessities like clothing and school materials. With parents barely making ends meet with bills for the household, children will suffer by having to wear inexpensive clothing and using hand me down things. â€Å"For struggling parents, keenly aware that adolescents agonize over the social pecking order,†¦, there is a small sense of failure in telling a child she cannot have what her classmates take for granted (Johnson 183. † A parent will want their child to strive towards the highest education possible, but with that comes more expensive costs. The competitive job market today forces people to attend college, just to ensure they will land a job in a secure career field. It’s a deadly Catch 22 with young adults entering the working world. Yet they must go through this battle to be able to support themselves, because parents just can’t afford to put money into a savings. With families lacking the means to give future generations to look forward to, Americans moral is decreasing. Our perfect American family ideal that this is a land of wealth and opportunity has become endangered. ————————————————- America searches frantically for answers from the government and all other sources to fix the declining economic issues. This nation needs to be reminded what the definition of the American Dream originally was. Not being able to provide for your family while working and children who are not taught the correct values when growing up, will as a result diminish the American dream. Some remain optimistic about this concept, but I remain firm in my belief that if something isn’t done about this growing problem then the fate of this country will be in real danger. ————————————————- Works Cited Huffman, Mark. â€Å"Having a Job May Not Be Enough to Make Ends Meet† Common Dreams. 1 Apr 2011. Web. 9 Jan 2012. Johnson, Dirk. â€Å"When Money is Everything, Except Hers. † Introduction to College Reading and Writing. Svetlana Lynch. Boston: Pearson, 2006. 182-186. Print.

Understanding Different Types of Navy Ships

The Navy has a large variety of ships in the fleet. The most well-known types are the aircraft carriers, submarines, and destroyers. The Navy operates worldwide from many bases. The large ships  Ã¢â‚¬â€Ã‚  aircraft carrier groups, submarines, and destroyers  Ã¢â‚¬â€Ã‚  travel around the world. Smaller ships such as the Littoral Combat Ship are based near their place of operations. Learn more about the many types of Navy ships in the water today. Aircraft Carriers Aircraft carriers carry fighter aircraft and have runways allowing the aircraft to take off and land. A carrier has about 80 aircraft onboard  Ã¢â‚¬â€Ã‚  a powerful force when deployed. All current aircraft carriers are nuclear-powered. Americas aircraft carriers are the best in the world, carry the most planes, and operate more efficiently than any other countrys carriers. Submarines Submarines travel underwater and carry an array of weapons. Submarines are stealthy Navy assets for attacking enemy ships and deploying missiles. A submarine may stay underwater on patrol for six months. Guided Missile Cruisers The Navy has 22 guided missile cruisers  that carry Tomahawks, Harpoons, and other missiles. These vessels are designed to provide defense against enemy aircraft. The onboard missiles.are designed to provide defense against enemy aircraft and missiles. Destroyers Destroyers are designed to provide land attack capability as well as air, water surface, and submarine defense capabilities. There are about 57 destroyers currently in use and several more under construction. Destroyers have massive weapons including missiles, large-diameter guns, and small-diameter weapons. One of the newest destroyers is the DDG-1000, which is designed to have a minimal crew while delivering a huge amount of power when deployed. Frigates Frigates are smaller offensive weapons carrying a 76 mm gun, Phalanx close-in weapons, and torpedoes. These are used for counterdrug operations and provide defensive capabilities when escorting other ships. Littoral Combat Ships (LCS) The Littoral Combat Ships are a newer breed of Navy ships providing the multi-mission capability. The LCS can change from mine hunting, unmanned boat and helicopter platforms, and special operations warfare to reconnaissance practically overnight. The Littoral Combat Ships are designed to use a minimum number of crew members to lower the operating costs. Amphibious Assault Ships The amphibious assault ships provide the means for putting Marines onshore using helicopters and landing craft. Their primary purpose is facilitating Marine transport via helicopters, so they have a large landing deck. The amphibious assault ships carry Marines, their equipment, and armored vehicles. Amphibious Transport Dock Ships Amphibious transport dock ships are used to carry Marines and landing craft for land assaults. These ships primary focus is landing craft-based attacks. Dock Landing Ships Dock landing ships are a variation on the amphibious transport dock ships. These ships carry landing craft. They also have maintenance and refueling abilities. Miscellaneous Navy Ships Special purpose ships include command ships, coastal patrol boats, mine countermeasures ships, submarine tenders, joint high-speed vessels, Sea Fighters, submersibles, the  sailing frigate USS Constitution, oceanographic survey ships, and surveillance ships. The USS Constitution is the oldest ship in the U.S. Navy. It is used for display and during flotillas. Small Boats Small boats are used for a variety of tasks, including river operations, special operations craft, patrol boats, rigid hull inflatable boats, survey boats, and landing craft. Support Ships Support ships provide the necessary provisions that keep the Navy operating. There are combat stores onboard with supplies, food, repair parts, mail, and other goods. There are ammunition ships, fast combat support ships, cargo, pre-positioned supply ships, as well as rescue and salvage, tankers, tug boats, and hospital ships. The two Navy hospital ships are truly floating hospitals with emergency rooms, operating rooms, beds for recovering patients, nurses, doctors, and dentists. These ships are used during wartime and major natural disasters. The Navy employs a wide variety of ships, each with its own purpose and responsibilities. The U.S. fleet includes hundreds of ships, from the small ones to huge aircraft carriers.