Amelia Vayda, Chapter 13, Question 6

In Chapter 13 of Naked Economics Wheelan discusses the differences between the United States of America's government and policies, compared to other countries around the world. One policy that interested me was the property right policy. The example that Wheelan gave was that in some countries property on the poorer outskirts of the developed cities is controlled by the government. People are not allowed to rent it, sell it, or pass it on to family members. After reading this section I thought about how it would be if my grandfather was not allowed to give my family his house. I realized that when we visited that city my family would have to spend lots of money just to stay in a hotel instead of staying in an already payed for house. Now knowing that some parts of countries don't allow you to own your own land or house I see the benefits that Americans have it. 

Caroline Pellegrin, Chapter 13, Question Seven

In Chapter 13, Wheelen offers eleven primary social, political and economic factors that "rich countries" traditionally display. I was struck by how many African countries do not display the majority of those factors. It seems as if Africa is intrinsically at a disadvantage due to two uncontrollable factos: weather and a history of being oppressed by European colonizers. Those two components seem to have direct negative manifestations on the capabilities of many African countries. For instance, many African countries have a tropical climate. This tropical climate, as Wheelan explains, stiffles agricultural production and promotes the spread of disease. A poor agricultural system in turn limits any growth within an economy and places people in very poor heath. Because of this poor climate, crucial factors to having a healthy economy such as trade are hindered. The poor health conditions caused by tropical weathers lessens human capital, which has a plethora of detrimental effects.  Moving on to oppression from European colonizers, joy, joy, joy! Because Africa was a more "difficult" place to settle, European colonizers basically used their African colonies to rape the region of all its natural resources and human labor.  After these European colonizers left Africa, the affected areas were barren and in disarray. European colonization hindered the future stability of African economies and political capabilities.  We continue to see the effects of colonization today.  These two burdens seem sort of inescapable. I am going to water down what Wheelan to conclude the chapter: foreign aid is bad, but it is bad to not have foreign aid.  How on Earth (pun intended?) can we help African countries in a completely effective manner?

Emma Tyler, Chapter 13, Question #4

Charles Wheelan centers around the idea of development economics in the thirteenth chapter of Naked Economics. Wheelan mentions multiple different policies ideas that could be implemented in developing countries in order to make them wealthier, and points out certain factors that some countries are affected by that they can't really change (ex: geography). One developing area Wheelan mentioned in the chapter was Saudia Arabia. I especially liked his simple yet effective answer to increasing their real per capita income growth: invest in "women power" (311).  Wheelan writes that in order for Saudi Arabia to grow economically, they need to invest more on the education of women and allow them to participate more in their countries' political and economic life (after all it is the lowest in the world). Wheelan then went on to site an experiment done in the Ivory Coast which found that when both women and men planted cash crops and had bountiful years, women were more likely to spend their abundant dough on food for their families while men were more likely to spend their overflow cash on drinking and smoking. This experiment did not say this is how all men would act this type of situation, but the majority did, proving to development officials that "if they give cash to the female head of the household, it will do more good" (312). The answer to making Saudi Arabia more wealthy in general is laid out plain and simple in this chapter, however due to the religious beliefs of many people in Saudi Arabia, this fix may not be implemented anytime soon.

jamie dovolis

After reading chapter 11 I was only more intrested in learning about the mass debt that the U.S. has with china. We both need eachother for our econemys to stay heathy, a "unhealthy relationship". We owe a trillion dollers to china, yet china is also woried about it, we have the power to just print off money and cause inflation, significantly lowering the actual amount its worth. Or what if we dont pay it off at all? These extremely large money exchanging, could cause mass inflation or a crash in the econemy, but were dose it leave the citizens? What happens to the american or chiness people? Do we plumit into econmic depression from inflation, dose are money become nothing? Or should we wait, keep the status quo? There are hundreds of solutions that comes with millions of side effects and out comes.

Kispert Kyle. Chapter 11. Question 6

As I first began to experience economical thoughts at a young teenager, I never really understood the debt we owe to China. I always thought that we simply needed money and they gave us some, like a loan. In this chapter it was interesting the way Wheelan explained the structure of the debt. The farm analogy hinted at a lot more structure to this debt than I had previously thought.

Thomas Shogren, Chapter 11, Question 7

In this chapter I learned that the relative value of a countries currency is very important to imports and exports that a country makes, which can affect the countries defficit (or lack there of). If a currency is strong relative to other currencies then it is cheaper to import while more expensive to export. The opposite is true if a currency is weak. I never knew about the severe inflation in Argentina. Many people complain about the inflation in the United States, but compared to Argentina's inflation it is not even comparable. I was also surprised by the "soft" currency in East Germany. If you went to East Germany and exchanged your money, you had no say on what you could exchange it for and if you don't spend all of your money then you are basically giving money away.

Megan Thurow, chapter 11, question 7

After reading this chapter, the thing that stuck out to me the most was the fact that money is not backed by anything worth value. I remember talking in class about how American money is not actually backed by gold but I thought it was interesting that money from other countries is the exact same. Money from all places is just paper and it seems like it really shouldn't  be worth anything too special. I'm still some what confused by how we know how much the dollar is worth compared to say, the Russian ruble. I'd like to learn more about that if we get the chance :)

Cat Potts, Chapter 11, Question

We have all heard the phrase "mo' money, mo' problems" thrown around at some point or another. I think that as a society, we are more concerned with the amount of money that we have rather than what it is actually worth. In Chapter 11, Wheelan raises the interesting idea of what the value of money really means, and that low value isn't always a bad thing. For example, on page 251, Wheelan describes a scenario in which the American dollar value declines. However, in foreign markets, this can actually be beneficial- the prices of our goods (such as Ford cars) looks better compared to that of markets in which the value of the dollar is stabilizing or going up. Therefore, the sales of Ford cars increases, the company makes money, thus raising the amount of money of the company and, if I'm tying this together correctly, the national GDP. Americans have a tendency to panic when we're not in first place, but if you stop and think about it, sometimes being a little behind can actually be a good thing. 

Sam McDonald Chapter 11 Question 6

While reading this chapter I came across yet another economic fact that I previously thought would be different. Previously I thought that if the American dollar grew weaker, then nothing good could come out of it. After reading the section in Naked Economics about the Ford dealer ship I now know differently. It states that when the dollar is weak,  businesses which export goods to other countries who's currency is stronger than the dollar will benefit. How so? In the countries with a stronger currency the price for a Ford Taurus will be cheaper for the people buying it, yet Ford will still pull in the same amount of money. Therefore, everyone one wins. This has completely contradicted my previous thoughts about the weakening of our dollar being ruinous  to our economy, and now I know that neither a weak or strong currency is "good".

Emma Tyler, Chapter 11, Question #6

In Chapter 11 of Naked Economics, I learned a lot concerning the topic of International Economics. The passage I found most interesting was about America's problem with "dissaving"- the farmer analogy. The analogy used two farmers growing corn; one was Farmer America and the other Farmer China. Farmer America had some troubles organizing and rationing out hid corn and needed up with a need to borrow some corn from somewhere else in order to have corn to plant next year. On the other hand Farmer China ends the analogy with extra corn even after he rationed out the amount he need to plant next year. It was helpful for Farmer America that Farmer China had this extra corn to give because then Farmers America got to do everything he wanted. Then Wheelan stops the analogy to describe the problem with this system. I always knew that the US was very dependent on China's goods, which would be detrimental to our economy at some point, but what I did not know before reading this chapter was that the relationship between China and America could potentially very extremely harmful to a China as well if it continues at this rate. Wheelan then mentioned that the relationship between the two will have to end but there are so many ways that it could end, we just won't know until it happens, which is kind of scary.

Caroline Pellegrin, Chapter 11, Question Six

Prior to reading this chapter my thoughts concerning the US currency in relation to the that of the rest of the world were fairly superficial. In short, I knew that the one US dollar was equivalent to less than one euro. Meaning that when I nannied in France, spending money on ice cream (a personal necessity) felt wrong.  I knew that I was paying way more in relation to the dollar amount, to buy an ice cream cone in euros- the dollar is weaker than the euro. Did this prevent me from buying ice cream? No, but it did ensue some economic guilt. What I didn't really understand were the implications that the value of the dollar has beyound myself. After reading this chapter, I now understand that a weak currency isn't necessarily a completely "bad thing." This is because a weak currency makes American goods less expenive for other countries to buy, i.e. good for commerce. But at what point does a weak currency become an utter hindrance? I was left with an unsettled question- like monetary and fiscal policy, to what degree is it "just" for the government to play around with the value of the dollar? Something that, in such a globalized world, will affect each and everyone of us. The hand becomes less and less invisible. Maybe...?

Amelia Vayda, Chapter 11, Question 6

In chapter 11 of Naked Economics, Wheelan discusses the currency rate and how it fluctuates due to the value of the actual currency and the economy. While reading the chapter I found it very interesting that currency rates between countries can change if the value of the currency is weaker and stronger. I also learned that if the economy is in a recession then the currency rates change as well. I never realized that currency rates change. I always thought that it was a simple equation and that a one dollar bill always equals a number that never changes for each currency. Now that I now that currency rates can change I will pay attention to what the rate is before I go on an international trip.

Andre LaRenzie, Chapter 11, Question 6

In this chapter, I found one specific topic very astonishing. Chapter 11 was all about International economics. The author, Charles Wheelan, speaks on the topic of  "evaluating official exchange rates relative to what PPP would predict".  He uses the term of burgernomics to describe this. In 2010, McDonald's Big Mac costed, on average in the US,  3.57$, and 12.5 renminbi in China. That would put the exchange rate for dollars to renminbi at around 3.5. The PPP prediction actually had the Reminbi at around 1 US dollar to 6.83 Reminbi, which is significantly higher. Later on in the passage, Wheelan states that China endorses a policy on "cheap" currency, and that this causes tension between China and the US.  This is where I find it astonishing and amazing and am left with questions. Can China really set an exchange rate like that? And does someone benefit and lose from this situation? Mcdonalds? The US economy? It doesn't sound right, and I can see why this increases tension between the two countries.

Chapter 10 jamie dovolis

This chapter showed me that we have a market economy that is susceptible to failer. It is week to chang   it is aperent taht we are not a completly free market, probaly for the best. Because pelople are irashional and some times don't act with rational self interest. Im glad that people are there so that we dont have an epicnomic crash. Then agen this board has alot of power. They controle so much of our countries money, they can twist and turn our country. Can we put our trust in them?

Cat Potts, Chapter 10, question 7

The Federal Reserve is far more involved in the economic world than I had previously thought. Going into this chapter, I imagined the Federal Reserve as more of the "master bank" than actually being in charge of managing inflation and other important factors. In a sense, it is a sort of master bank, but not in the way that most commonly would presume. Another part of this chapter that was new to me was the importance of balance, and how there can certainly be too much of a good thing. For example, extreme inflation can be incredibly dangerous for the economy. Generally speaking, inflation is a positive factor, as it represents economic growth. However, in a situation such as the 1970's, as Wheelan mentioned, too much inflation must be balanced out so as to not result in an economic disaster, which is where the Federal Reserve comes in to play. The Federal Reserve keeps our economy from falling apart.

Kyle Kispert. Chapter 10. Question 6

In chapter 10, I found the footnote about low and negative interests rates interesting. Through this chapter I learned about the federal reserve and interest rates, and concluded that regulations of money are also making money. Because of the footnotes about a negative interest rate stood out to me. I would never has guessed that an interest rate has ever been negative. This financial crisis must have been very dramatic. It would be interesting to study past interest rate changes and patterns.

Thomas Shogren, Chapter 10, Question #7

During this chapter I learned the about the roll of the Federal Reserve. As a kid I thought that the government should just print off more money and give it to the poor in order to help those who are in bad situations, but obviously that would be a terrible idea. If the government printed off more money then the value of the dollar would go down causing inflation, which would cause even more economic downpoor. I didn't realize the importance of the Federal Reserve and the difficult decisions they have to make in terms of their economic decisions. If the Federal Reserve makes a bad decision there can me major inflation/deflation which can cause a major disaster in terms of the economy.

Megan Thurow, ch 10, question 2

in this chapter of naked economics Charles Wheelan discuses inflation and its effects. Something that effected me was the comparison of the PT cruisers and Chrysler. I found it interesting that the same thing that happened to the company happens to our economy in general. One point was when there is a high demand for labor the union will demand higher wages. I thought that was interesting how you can compare a company to the economy.

Griffin Malone, Chapter 10, Question 6

      In chapter 10 of Naked Economics Charles Wheelan explains the Federal Reserve's responsibilities monitoring large amounts of money and being the "credit tap" for our economy. The Federal Reserve has a large responsibility to the country and our economy. The Federal Reserve has to keep our economy working to its full potential and the maximum efficiency. They have to feed enough credit to the economy to create jobs. The Reserve must create small recessions to limit inflation in the economy. The Reserve stimulates and controls the economy through the banks and credit. The reserve stimulates the economy by lowering the cost to borrow money from banks. 

Caroline Pellegrin, Chapter Ten, Question 6

It seems as if the invisibe hand has grown much more apparent. Throughout this course I have belived that we are very much governed by a free-market, but after Wheelan describes the power and implications of the Federal Reserve my opinion has been altered (though I do realize that the FR is separated from direct government imposition and that there is an valid need for it). Prior to this chapter my view on the Federal Reserve was hazy a best; I kind of imagined it as a dozen men, around the age of 50, sitting in a vault of money. I was a bit off. Infact, the Federal Reserve is far greater than that. It has the primary goal of handling monetary policy, in simple terms controlling interest and inflation rates. They set the "speed limit"of the economy and budget the prescribed inflation limitation accordingly. In other words, the Federal Reserve literally has our economic prosperity in their own hands. With a faulty lending decision or negligent inflation control the economy can easily be set into a spiral. What if Ben Bernanke has a bad day? He is only human! There are so many things that are utterly unpredictable in our economy. I was a bit relieved and freightened that the position of the Federal Reserve chairman was appointed. For one, that keeps the president from being able to fill the Federal Reserve positions with people that will act according to his or her own will, but on the otherhand it makes the actions of the Federal Reserve far less transparent. These individuals wield an enormous amount of power, yet we have virtually no say in who they are. How can we be sure that they aren't strategically aligning themselves with other banks and industries? This chapter challenges how much economic free will we really have.

Amelia Vayda, Chapter 10, Question 6

In chapter 10 of Naked Economics Wheelan brings up the branch within the Federal Reserve called the Federal Open Market Committee (FOMC). This branch specifically works with interest rates. There are two distinct ways to stimulate the economy by lowering the cost of borrowing. The first tool is the discount rate and an example Wheelan gives is when Citibank's discount rate falls they can borrow from the Feds at a low cost, which then lets them lend at a cheaper price to their customers. Another tool that banks use is borrowing from other banks, for example when Wells Fargo lends money to Citibank. Learning about these two distinct ways to help customers borrow money from banks has showed me that it takes a lot more work to get a loan. It also showed me that there are more people involved than I initially thought. I had always thought when I was younger that you could just walk into a bank and receive money but after reading this passage I have developed a better understanding of what it really takes to receive a loan and that it takes a committee and the bank to develop the loan. It just doesn't come from a bank teller. 

Andre LaRenzie, Chapter 10, Question #6

As a child I always thought, "Why can't we just print off more money to satisfy the needs of the poor population from around the world?". This is a misconception that many children I am sure dealt with. Also, with my parents being uneducated with Economics, I was never given an answer until we read Chapter 10 of "Naked Economics". Chapter 10 deals with the Federal Reserve, and how they regulate the "money supply" and "credit tap". There is a passage early on in the chapter that answers the question above. Charles Wheelan explains that if the Federal Reserve cuts tax rates and create a lot more money, then inflation will occur, and making it impossible to supply the poor population with money. When new money is created, high demands for products arise, and the companies are unable to keep up with the demand, so the only option would be to raise prices. Now this would keep happening if money kept on being created. The economy would be a disaster. So because of chapter 10 in "Naked Economics", I am finally relieved, and illuminated by being educated of how the Federal Reserve regulates money, and how it is impossible to create money for the poor. At least my ambition and selflessness were in the right place, just not my logic.

Emma Tyler, Chapter 10, Question #2

In Chapter 10 of Naked Economics, Wheelan describes the Federal Reserve and their responsibilities. The main job of the Federal Reserve is to control "the money supply and therefore the credit tap for the economy" (219). Preventing inflation or deflation is a very important job the Federal Reserve has, and I learned that inflation/deflation is an important issue that, if present in our economy, could affect my life. Wheelan uses the extreme example of terrible inflation in Germany after the first World War. Wheelan writes that "In 1921, a German newspaper cost roughly a third of a mark; two years later, a newspaper cost 70 million marks" (231). If inflation was happening in the US today I would be directly affected at the age I am right now, and if inflation occured when I was older. Inflation has the power to completely put an economy in shambles and it could lead to a downward spiral of events that would also be harmful (things like unemployment). Reading this chapter made me understand that the Federal Reserve plays a very important role in our daily lives, though we may not notice.