Economics Assignment for Gross Domestic Product - Free Sample

Question: Discuss about the Economics Assignment for Gross Domestic Product. Answer: Inrtoduction: Gross Domestic Product (GDP) of a country is defined as a sum total of all final goods and services produced in an economy within the territories of the countries. There are three methods of calculating GDP, income method, expenditure method, and production method. In income method, the annual income of all individuals of a country is added together, in expenditure approach, all expenditures made by the individuals in a country is added together and in production method, the market values of all final goods and services are added to obtain GDP (Mankiw 2014). According to the given data set, expenditure method is used to calculate GDP GDP = C + G + I + (X M) GDP = Household consumption + Government purchases + Total Gross fixed capital expenditures+ change in inventories+ (Export Import) (Note: government purchases does not include transfer payments, so transfer payments are not taken in calculation) GDP for Country A = 150 +250 + 50 + 50 + (40-20) = $ 480 billions GDP of Country B = 150 + 250 +150 -50 + (40 -20) = $ 520 billions The GDP of country A is $480 billion which is less than country Bs GDP, i.e. $ 520 billion. It indicate that the market value of all final goods and services produced in country B is greater than the market value of all final goods and services produced in country A. The market value indicates the price level of the country. Hence higher GDP in country B gives an indication of higher price level in country B as the calculation is based on market value (Kubiszewski et al. 2013). There may be several reasons for higher price level, such as higher demand of goods by the consumer. If the demand of goods increases, without any change in supply then it leads to rice in price (Vespignani 2013). The rise in demand also indicates, rise in income in the country which implies rise in employment and production of the country. All it together indicates that the country is going through a boom period. On the other hand, as GDP in country A is lower than in country B, it gives the opposite indications, i.e., the price level in country A is lower than that in country B (Miles et al. 2012). Further, the demand in country A is also lower than in country B. As demand in country A is less, so the income, employment and production in country A are also less than that in country B. Hence, it is implied that country A is experiencing an economic recession ac compared to country B as recession means fall in income, production, employment and hence demand. Recession is a temporary phenomenon in an business cycle that takes place due to fall in production, investment, income and demand in a country. As country A is experiencing a reduction, so it can be said that country A is likely undergoing a period of recession (Hutchinson 2015). Year GDP at constant prices(Billion)AUD Growth rate Growth rate (%) of real GDP 1980 544,944,000,000.00 1981 563,244,000,000.00 0.034 3% 1982 581,951,000,000.00 0.033 3% 1983 568,970,000,000.00 -0.022 -2% 1984 595,297,000,000.00 0.046 5% 1985 626,547,000,000.00 0.052 5% 1986 652,245,000,000.00 0.041 4% 1987 669,037,000,000.00 0.026 3% 1988 707,634,000,000.00 0.058 6% 1989 735,081,000,000.00 0.039 4% 1990 761,023,000,000.00 0.035 4% 1991 758,132,000,000.00 -0.004 0% 1992 761,157,000,000.00 0.004 0% 1993 792,061,000,000.00 0.041 4% 1994 824,044,000,000.00 0.040 4% 1995 856,009,000,000.00 0.039 4% 1996 889,814,000,000.00 0.039 4% 1997 924,938,000,000.00 0.039 4% 1998 965,989,000,000.00 0.044 4% 1999 1,014,357,000,000.00 0.050 5% 2000 1,053,599,000,000.00 0.039 4% 2001 1,073,927,000,000.00 0.019 2% 2002 1,115,345,000,000.00 0.039 4% 2003 1,149,595,000,000.00 0.031 3% 2004 1,197,296,000,000.00 0.041 4% 2005 1,235,689,000,000.00 0.032 3% 2006 1,272,548,000,000.00 0.030 3% 2007 1,320,366,000,000.00 0.038 4% 2008 1,369,308,000,000.00 0.037 4% 2009 1,394,225,000,000.00 0.018 2% 2010 1,422,363,000,000.00 0.020 2% 2011 1,456,209,000,000.00 0.024 2% 2012 1,509,109,000,000.00 0.036 4% 2013 1,545,932,000,000.00 0.024 2% 2014 1,584,578,000,000.00 0.025 2% 2015 $ 1,584,578,000,000.00 0.000 0% Table 1: Growth rate of Real GDP of Australia from 1980-2015 Source: Author Figure 1: Growth rate of Real GDP of Australia from 1980-2015 Source: Author Figure 1 depicts the growth rate of real GDP in Australia from the period 1980 to 2015. The growth rate has varied from -2% to 6% in a span of 35 years. The lowest was in the year 1983 and the highest was in the year 1988. There are steep fall and rise in the growth rate over the years (Tucker 2016). The economy of Australia experienced two major period of fall in the growth rate, one was in 1983, as -2% and other was in 1991, as 0%. The reason behind 1983 negative growth rate was the double-dip severe global recession in the early 1980s was mainly due to contractionary monetary policy of Federal Reserve, USA. The tightening of monetary policy was mainly to recover from the energy crises in 1979 in the world. Australia and USA are good trade partners in the world, so recession in USA had drastically affected Australias growth rate and reduced it to negative return (Kent 2014). The zero growth rates in 1991 in Australia was due to the worst hit recession in the country during early 1990s after the Great Depression. There has been lots of debate behind the actual reason of recession in 1990.One of the belief is the financial excess in the 1980s has caused the recession in 1990s. The international recession in 1990s and the overstretched economy of Australia during the late 80s for achieving faster growth and development may have caused the recession in1992 in Australia (Hasan et al. 2012). One of the highest growth was 6% in 1988 was mainly due to the overstretched economy of Australia and the rising asset prices in the world market which was followed by increasing borrowing. The economy was going through boom period during 1988, however it was a short-lived boom period and soon economy feel and growth rate got zero in 1992. Another dip in the growth rate was seen in 2009 to 2% due to sub-prime loss in USA which caused global recession. However, it should be noted that after every recession the economy has come out with better growth rates in the next coming years and had always recovered steeply from the recession (Garnier et al. 2015) Presently, from 2012 onwards the economy is seeing a fall in the growth rate mainly due to fall in the productivity of labour force, income and demand and increase in population due to increase in immigrants with easier immigrant policies (Gandolfo 2013) Year CPI Growth rate Growth rate of inflation(%) 1980 10.12658 1981 9.691745 -0.043 -4% 1982 11.14551 0.150 15% 1983 10.11356 -0.093 -9% 1984 3.950185 -0.609 -61% 1985 6.739049 0.706 71% 1986 9.084532 0.348 35% 1987 8.488746 -0.066 -7% 1988 7.231772 -0.148 -15% 1989 7.559425 0.045 5% 1990 7.27226 -0.038 -4% 1991 3.22268 -0.557 -56% 1992 0.985915 -0.694 -69% 1993 1.81311 0.839 84% 1994 1.894977 0.045 5% 1995 4.638136 1.448 145% 1996 2.61242 -0.437 -44% 1997 0.250417 -0.904 -90% 1998 0.853455 2.408 241% 1999 1.465428 0.717 72% 2000 4.475183 2.054 205% 2001 4.380841 -0.021 -2% 2002 3.003171 -0.314 -31% 2003 2.770735 -0.077 -8% 2004 2.343612 -0.154 -15% 2005 2.668733 0.139 14% 2006 3.538487 0.326 33% 2007 2.332362 -0.341 -34% 2008 4.352643 0.866 87% 2009 1.820112 -0.582 -58% 2010 2.845226 0.563 56% 2011 3.30385 0.161 16% 2012 1.76278 -0.466 -47% 2013 2.449889 0.390 39% 2014 2.487923 0.016 2% 2015 1.508367 -0.394 -39% Table2: Growth rate of inflation in Australia fro 1980-2015 Source: Author Figure 2: Growth rate of inflation in Australia for 1980-2015 Source: Author Figure 2 shows the growth rate movement of inflation in Australia from 10980-2015. It can be noted that during the boom period when real GDP was high, growth rate of inflation was very high and during recession when growth rate of real GDP was low, growth rate of inflation was very low (Edgar 2014). Figure 3: Growth rate of inflation and real GDP in Australia for 1980-2015 Source: Author The relation between growth rate of inflation and real GDP is shown in figure 3. The variation in real GDP is much lower than the variation in inflation. The relation between real GDP and inflation growth rate is positive to each other, When GDP growth rate is high, inflation is also high and when GDP growth rate is low, inflation is also low. The reason is during high growth rate, production, income, employment and demand increases that cause the prices also to rise due to the time lag between demand and production (Storm and Naastepad 2012). The demand can rise instantly, but to meet that excess demand production cannot be increased instantly. It can only increase in the next period and that period rise in demand is met by inventories which are generally of limited nature. Hence inflation increases with increase in real GDP in Australia (Dornbusch and Bodman 2013) Year Unemployment rate Growth rate of unemployment rate 1980 1981 1982 1983 1984 1985 1986 1987 1988 1989 1990 1991 9.6 1992 10.8 0.12 1993 10.9 0.01 1994 9.7 -0.11 1995 8.5 -0.12 1996 8.5 0.00 1997 8.5 0.00 1998 7.7 -0.09 1999 6.9 -0.10 2000 6.3 -0.09 2001 6.8 0.08 2002 6.4 -0.06 2003 5.9 -0.08 2004 5.4 -0.08 2005 5 -0.07 2006 4.8 -0.04 2007 4.4 -0.08 2008 4.2 -0.05 2009 5.6 0.33 2010 5.2 -0.07 2011 5.1 -0.02 2012 5.2 0.02 2013 5.7 0.10 2014 6 0.05 2015 Table 3: Growth rate of unemployment in Australia from 1980-2015 Source: Author Figure 3: Growth rate of unemployment in Australia from 1980-2015 Source: Author Figure 3 shows growth rate of unemployment in Australia from the period 1980 to 2015. The country has seen highest unemployment rate in 1993 to 10.9% and lowest in 2008 to 4.2%. There have been several variations in the unemployment rate in between the periods. The variation in unemployment rate is linked with the variation in the growth and development of the country. The highest unemployment rate in 1993 was may be due to the global recession of 1990 which has affected almost all the developed economy. The major cause of recession was contractionary monetary policy of Federal Reserve of United States (worldbank.org 2016). Figure 4: Growth rate of unemployment and real GDP in Australia from 1980-2015 Source: Author Figure 4 shows the relation between the growth rate of unemployment rate and real GDP in Australia from 1980 to 2015. The growth rate of real GDP ranges between 2% to 6% in the period of 35 years. The two curves are inversely related to each other. When the growth rate is high, there is more production, investment, employment and income in the economy and so unemployment rate is low. On the contrary, when the growth rate is low, there is less production, investment, employment and income, due to which the growth rate in unemployment is high ( Argy and Nevile 2016). The unemployment rate gets influenced with seasonal changes in jobs and changes in the business cycle of an economy. The higher unemployment rate may be a short term phenomenon and in long run the unemployment rate reduces due to prudence policies of government towards economic growth and development (Wray 2015). Several steps taken by Australian government towards the reduction in unemployment rate are easy access to foreign direct investment for expansion of job opportunities for the labour force. Further, unemployment beneficial allowances are provided by the government for the labour force to support them in time of financial crises. The government of Australia has given several loan advances facilities for small business organization and farmers to expand their business and grow in their field of work. Hence unemployment problem has been controlled by the government through various measures over the period ( Argy 2013). References Argy, V., 2013. International macroeconomics: theory and policy. Routledge. Argy, V.E. and Nevile, J. eds., 2016. Inflation and Unemployment: Theory, Experience and Policy Making. Routledge. Data.worldbank.org. (2016). Indicators | Data. [online] Available at: https://data.worldbank.org/indicator [Accessed 29 May 2016]. Dornbusch, R. and Bodman, P., 2013. Macroeconomics 3e. McGraw-Hill Education Australia. Edgar, B., 2014. An intergenerational model of spatial assimilation in Sydney and Melbourne, Australia. Journal of Ethnic and Migration Studies, 40(3), pp.363-383. Gandolfo, G., 2013. International Economics II: International Monetary Theory and Open-Economy Macroeconomics. Springer Science Business Media. Garnier, C., Mertens, E. and Nelson, E., 2015. Trend inflation in advanced economies. International Journal of Central Banking, 11(4), pp.65-136. Hasan, R., Mitra, D., Ranjan, P. and Ahsan, R.N., 2012. Trade liberalization and unemployment: Theory and evidence from India. Journal of Development Economics, 97(2), pp.269-280. Hutchinson, D., 2015. Australian current GDP, GDP deflator, CPI, population and share price index: data sources and methods. Kent, C., 2014. The Business Cycle in Australia. Address to the Australian Business Economists, Sydney, 13. Kubiszewski, I., Costanza, R., Franco, C., Lawn, P., Talberth, J., Jackson, T. and Aylmer, C., 2013. Beyond GDP: Measuring and achieving global genuine progress. Ecological Economics, 93, pp.57-68. Mankiw, N.G.R.E.G.O.R.Y., 2014. Principles of macroeconomics. Cengage Learning. Miles, D., Scott, A. and Breedon, F., 2012. Macroeconomics: understanding the global economy. John Wiley Sons. Storm, S. and Naastepad, C.W.M., 2012. Macroeconomics beyond the NAIRU. Economics Books. Tucker, I.B., 2016. Macroeconomics for today. Nelson Education. Vespignani, J.L., 2013. The Industrial Impact of Monetary Shocks During the Inflation Targeting Era in Australia. Australian Economic History Review, 53(1), pp.47-71. Wray, L.R., 2015. Modern money theory: A primer on macroeconomics for sovereign monetary systems. Palgrave Macmillan.

Othello RR Essays - Othello, Film, Fiction, William Shakespeare

Othello RR In Othello, jealousy plays a big role throughout the play in many of the character's lives. Beginning with Roderigo, he is jealous of Othello because he's the one that wants to be with Desdemona, and to the end of the play when Othello is angry because he believes Cassio and Desdemona have been engaging in a love affair. Iago has to do with much of this; he is a selfish character that makes up lies and likes to mislead situations. He is filled with envy and anger that he brings out the jealousy of the other characters, especially Othello because that's part of what he feels as well when he wasn't chosen for lieutenant, Cassio was. Iago is very wise in the way he says certain things to make people believe his convincing lies. He is clever at the timing of what he says, he knows when to say it and how. Iago is immediately portrayed as the villain of the play when he gets paid by Roderigo to get her away form Othello. Along with that, Iago comes up with a plan of his own. He accuses Othello as a thief by saying that Othello has stolen Desdemona's heart by using witchcraft. He then convinces Roderigo to confront her father about what is going on. Iago is not concerned all about the love Roderigo has for Desdemona and that he wants to be with her, all he is thinking and focusing about is getting Brabantio to come after Othello and make him suffer. Jealousy destroys Othello. The situation between Othello and Iago can't necessarily be all of Iago's fault. It is not fair to blame him for the tragedy that happened to Othello. Even though Iago did have a lot to do with the disasters that happened in the play, it still all comes down to Othello for falling into the lies. Iago used manipulation to get Othello to be jealous and in my opinion, he did not have to try all that hard to get Othello to believe Desdemona was having an affair. Othello shouldn't have let Iago get in his head the way he did about Desdemona. He started to become convinced and blinded by Iago that led him down a path of anger, resentment, and questioning of his wife and his friend Cassio. He let these thoughts of adultery take over his mind, which made him loose everything. Throughout the play, Othello's actions sink him deeper and deeper into doubt that later led him to kill not only the love of his life but himself as well. Both Iago and Othello have a goal to be superior than the other. Othello simply just wants the truth and answers, while Iago wants to manipulate those who have hurt him. So that being said, Iago turns conversation around to Othello to come up with the conclusions that Iago wants. In order for Iago to increase Othello's jealousy, he waits for what Othello responds. An example of this is when Othello asks Iago about Cassio being with Desdemona when they are seen together in private. "Was that not Cassio parted from my wife?" asked Othello to Iago. Iago responds, "Cassio, my lord?" Othello answers back, I do believe twas he" (Act 3, scene 3, lines 37-38,40). Iago purposely answers his question with a question so that Othello actually answers is own question to which Othello believes.

Free Essays on Steel

Have you ever wondered how skyscrapers came about? Before there were skyscrapers, there were towers. Made of heavy stone, towers had thick, sturdy walls, but the rooms were dark and cramped. The reason the towers were so dark was because having too many windows would weaken the structure. Soon Gothic cathedrals joined the quest for height. Long, stone arms, called flying buttresses, supported the cathedral’s heavy weight, allowing the walls to be filled with colorful glass windows. George A. Fuller was the first person to invent the sky scrapper. Fuller worked on solving the problems of â€Å"load bearing capacities† of tall buildings. Fuller built the Tacoma building in 1889, the first structure ever built where the outside walls did not carry the weight of the building. In order for Fuller’s idea to work he needed a material and enough of that material to make a steel cage that could support the weight. The Flatiron Building was one of New York City’s first skyscrapers, built in 1902 by Fuller’s building company. With an idea as valuable as Fuller’s someone had to step up to the plate and create a way to mass-produce steel inexpensively. That man was Henry Bessemer of England. In 1855, Bessemer developed the idea of â€Å"air blowing the carbon out of the pig iron†, which is still used today to make modern steel.... Free Essays on Steel Free Essays on Steel Have you ever wondered how skyscrapers came about? Before there were skyscrapers, there were towers. Made of heavy stone, towers had thick, sturdy walls, but the rooms were dark and cramped. The reason the towers were so dark was because having too many windows would weaken the structure. Soon Gothic cathedrals joined the quest for height. Long, stone arms, called flying buttresses, supported the cathedral’s heavy weight, allowing the walls to be filled with colorful glass windows. George A. Fuller was the first person to invent the sky scrapper. Fuller worked on solving the problems of â€Å"load bearing capacities† of tall buildings. Fuller built the Tacoma building in 1889, the first structure ever built where the outside walls did not carry the weight of the building. In order for Fuller’s idea to work he needed a material and enough of that material to make a steel cage that could support the weight. The Flatiron Building was one of New York City’s first skyscrapers, built in 1902 by Fuller’s building company. With an idea as valuable as Fuller’s someone had to step up to the plate and create a way to mass-produce steel inexpensively. That man was Henry Bessemer of England. In 1855, Bessemer developed the idea of â€Å"air blowing the carbon out of the pig iron†, which is still used today to make modern steel....

The Challenges African States Faced at Independence

The Challenges African States Faced at Independence One of the most pressing challenges African states faced at Independence was their lack of infrastructure. European imperialists prided themselves on bringing civilization and developing Africa, but they left their former colonies with little in the way of infrastructure. The empires had built roads and railroads - or rather, they had forced their colonial subjects to build them - but these were not intended to build national infrastructures. Imperial roads and railways were almost always intended to facilitate the export of raw materials. Many, like the Ugandan Railroad, ran straight to the coastline. These new countries also lacked the manufacturing infrastructure to add value to their raw materials. Rich as many African countries were in cash crops and minerals, they could not process these goods themselves. Their economies were dependent on trade, and this made them vulnerable. They were also locked into cycles of dependencies on their former European masters. They had gained political, not economic dependencies, and as Kwame Nkrumah - the first prime minister and president of Ghana - knew, political independence without economic independence was meaningless.   Energy Dependence The lack of infrastructure also meant that African countries were dependent on Western economies for much of their energy. Even oil-rich countries did not have the refineries needed to turn their crude oil into gasoline or heating oil. Some leaders, like Kwame Nkrumah, tried to rectify this by taking on massive building projects, like the Volta River hydroelectric dam project. The dam did provide much-needed electricity, but its construction put Ghana heavily into debt. The construction also required the relocation of tens of thousands of Ghanaians and contributed to Nkrumahs plummeting support in Ghana. In 1966, Nkrumah was overthrown.   Inexperienced Leadership At Independence, there were several presidents, like Jomo Kenyatta, had several decades of political experience, but others, like Tanzanias Julius Nyerere, had entered the political fray just years before independence. There was also a distinct lack of trained and experienced civil leadership. The lower echelons of the colonial government had long been staffed by African subjects, but the higher ranks had been reserved for white officials. The transition to national officers at independence meant there were individuals at all levels of the bureaucracy with little prior training.  In some cases, this led to innovation, but the many challenges that African states faced at independence were often compounded by the lack of experienced leadership. Lack of National Identity The borders Africas new countries were left with were the ones drawn in Europe during the Scramble for Africa with no regard to the ethnic or social landscape on the ground. The subjects of these colonies often had many identities that trumped their sense of being, for instance, Ghanaian or Congolese. Colonial policies that privileged one group over another or allocated land and political rights by tribe exacerbated these divisions. The most famous case of this was the Belgian policies that crystallized the divisions between Hutus and Tutsis in Rwanda that led to the tragic genocide in 1994. Immediately after decolonization, the new African states agreed to a policy of inviolable borders, meaning they would not try to redraw Africas political map as that would lead to chaos. The leaders of these countries were, thus, left with the challenge of trying to forge a sense of national identity at a time when those seeking a stake in the new country were often playing to individuals regional or ethnic loyalties.   Cold War Finally, decolonization coincided with the Cold War, which  presented another challenge for African states. The push and pull between the United States and the Union of Soviet Socialist Republics (USSR) made non-alignment a difficult, if not impossible, option, and those leaders who tried to carve third way generally found they had to take sides.   Cold War politics also presented an opportunity for factions that sought to challenge the new governments. In Angola, the international support that the government and rebel factions received in the Cold War led to a civil war that lasted nearly thirty years. These combined challenges made it difficult to establish strong economies or political stability in Africa and contributed to the upheaval that many (but not all!) states faced between the late 60s and late 90s.

Critical Thinking Assignment Essay Example | Topics and Well Written Essays - 500 words

Critical Thinking Assignment - Essay Example Moreover, elements in the identical column share similar traits that distinguish them ((John 45). They are categorized as a family or a group. However, these elements exhibit differences because of variation in the proportion of neutrons, electrons, protons, atomic mass and isotopes. Indeed, the bonds can be covalent, polar or ionic. Ionic compounds are compounds with two or more ions held closely by electrical attraction. They contain cation (+) and the anion (-) charges. Most Ionic compounds dissolve in water. Some ionic compounds fail to disband in water. The ionic compounds that contain highly polarized ions often do not dissolve in water. Moreover, ionic compounds form when non-metals bond to metals. When this happens, the compounds react rather than dissolve in water (John 59). For instance when sodium (an ionic compound) is dissolved in water a chemical reaction is observed: (Na2O(s) + aq → 2Na+(aq) + O2−(aq). A bond is covalent if its atoms share electrons instead of transferring them from one electron to another. Covalent bonds exist where two non-metals bond (John 70). Covalent bonds have lower electro negativity thus they share electrons when bonding. Most covalent bonds fail to dissolve in water. This is because they are mainly non-polar while water is polarized. Compounds dissolve in solutions that harbor similar properties in terms of polarity. Moreover, covalent bonds are held by strong covalent bonds that cannot pull apart in water. However, there are unique cases where covalent bonds dissolve in water ((John 71). The chemical formula of water is H2O. That is one molecule of oxygen for two hydrogen atoms, which are bonded covalently to form water. When chemical compounds are introduced in water, reactions occur because of the differences in polarity and electro negativity of water in relation to other substances (John 60). Compounds such as sulfur, nitrogen and chlorine react with H20 to release gases and metal oxides.

Efficient Market Theory Essay Example | Topics and Well Written Essays - 1750 words

Efficient Market Theory - Essay Example Any information, whether published or insider, will reflect in the prices instantly. This hypothesis presupposes that there is no question of under or overvaluation in the market and it is impossible to outperform the market by making abnormal profits in the stock exchanges. It is also pertinent to note that higher returns are associated with higher risks, and the factors affecting performance of a stock could vary from political risks, acquisitions and mergers, crisis of various sorts to fluctuations in other markets, and it may be difficult for the market forces to adjust to the impact of these factors instantly. Objectives This paper seeks to study and analyze the secondary sources with reference to the following questions relevant to efficient markets theory: 1. Is the Efficient Market theory true? 2. Is there any need for technical or fundamental analysis in efficient markets? Efficient Market Theory If beating the market is impossible, how come Warren Buffet is consistent in ou tperforming the market? There are so many mutual fund and portfolio managers giving consistent performance in the stock markets, which is not possible according to this theory. There is always scope for outperforming the markets thorough experience, expertise, intuition and discipline. The efficient market is an ideal situation which is hardly achieved in the real life. For example, Muhammad, N. M. N. and Rahman, N. M. N. A. (2010, p. 35) writes â€Å"EMH states that security prices fully reflect all available information and will immediately adjust to the arrival of new information (Adam, 2004). However, since market was closed on both Saturday and Sunday, it was argued that investors cannot do anything with the market even though they got some information during the weekend†. The equilibrium in the market is always disturbed by so many factors including psychological factors such as over confidence of the investors or over reaction to the market forces. Sharma, A. (2009, p. 37) states â€Å"Various studies have been conducted worldwide on stock market reaction to public announcements. Market’s reaction to such publicly available information is very swift. Inefficiency in the market exists when investors envisage such information before it is formally announced and earn abnormal returns†. Greed and fear are the motivating forces of the markets many a times, and rational approach to the investment or trading takes the backseat. Sudden crashes in the markets are nothing to do with fair value, and the market sentiments driven by so many factors rudely shakeup the very fundamental concept of this theory. Consequently, the question of under or overvaluation to the stock arises in the markets. Park, A. (2010, p. 365) states that one of the implications of the weak-form EMH is that prices are submartingale, or, more loosely, they are a random walk. Consequently, a so-called technical analysis, which is the extraction of information about the fut ure movement of prices from past prices, should have no merit. In real life situations, perfect efficiency in the market place is unrealistic, and it also depends upon accuracy of the information, cost of the information, the efficiency of the information transmission and the risk-return reward in taking decisions based on the information. Livanas, J. (2006, p. 28) argues how can the market be efficient when investors seem to make decisions that perhaps are rational – but only within bounds? When the investors make decisions in an irrational manner, which is in line with the human behavior, it will be difficult to rely on a

Corruption in sports Essay Example for Free

Corruption in sports Essay Corruption has been a well known problem of sport and it has touched a lot of walks of sport life. Many people say that these days corruption in sports has escalated and although they see same solutions of this problem it stills very difficult to combat. Our society is well informed about corruption in sports. People from teenagers to the elderly, men and women know that corruption in sports exists. A survey of seventeen people conducted at SS. Cyril and Methodius Seminary, Orchard Lake, in September 2001 revealed that knowledge about this issue comes mostly from TV, internet, and newspapers (Survey 2001). According to Eric Christiansen who is a former sports reporter for a local TV station in Nebraska, everybody knows about corruption in todays sports but everybody is afraid to say something against it because it can pose them unnecessary problems (Christiansen, 2001). The problem of corruption in sports is very universal. People are connected with corruption in many ways. For example, two popular sources ESPN and Associated Press say that the presidents of the American Boxing Federation and the French Ski Federation took bribes from sponsors (Graham 1999) (Associated Press [Annecy, France], 28 March 2000). In addition a captain of the South African Cricket National Team admitted to taking a bribe from bookmakers (Associated Press [Cape Town, South Africa], 25 May 2000). The list of countries, sports, and participants involved in athletic corruption is very long, but the list has a common thread which is desire for money and sometimes fame. People dont have too many ideas on how to combat corruption. Almost everyone says that restriction in the law can solve corruption in sports but reality shows that it isnt as easy as it looks (Survey 2001). Almost every day we can read or hear new information about it. The legislative branches of many countries work all the time on new legislations to help combat the problem of corruption. The results are very weak. According to Christiansen, the way to solve this problem is by teaching children that corruption is always bad and giving a good example of an  anti-corrupt life (Christiansen, 2001). This is probably the most reasonable solution for destroying evil at its roots. Finally, protecting the beautiful idea of rivalry through sport from corruption isnt easy. People might know about corruption in sports. They may even have ideas about how to solve the problem. However, the problem of corruption is like a dragon. Cut off one head and seven more grow in its place. You can kill him only before his birth, when he is inside the egg.