Socstud Notes PDF

TABLE OF CONTENTS Need to add session 2 IM TOO LAZY TO HYPERLINK. - SESSION 1 a. 2 SECTOR MODEL b. 3 SECTOR MODEL (GOVT.) c. FOREIGN SECTOR d. FINANCIAL SECTOR e. BUSINESS CYCLE f. GLOBALIZATIO...

TABLE OF CONTENTS Need to add session 2 IM TOO LAZY TO HYPERLINK. - SESSION 1 a. 2 SECTOR MODEL b. 3 SECTOR MODEL (GOVT.) c. FOREIGN SECTOR d. FINANCIAL SECTOR e. BUSINESS CYCLE f. GLOBALIZATION g. TYPES OF GLOBALIZATION - SESSION 2 Q: what’s the difference between microeconomics and macroeconomics? ★ microecon (market, effect of prices of goods, labor market, consumption ──.✦ resource market : ★ households are sellers (supply) and behavior, supply of good) firms are the buyers (demand) ★ macroecon (gdp, inflation, ○ sellers (supply) offer factors employment/unemployment, of production aggregate demand, capacity of firms labor money) capital ————————————————————————————————— land E 2 SECTOR MODEL ntrepreneurship ○ buyers (demand) wages, ★ both households and firms can be interest, rent, and profit as supply and demand household’s income ★ circular flow ○ demonstrates how money moves through society ○ economy = endless flow of money ──.✦ product market : ★ firms are the sellers (supply) and households are the buyers (demand) ★ firms (supply)take revenue and make them into goods and services ★ households’ spending turns into firms revenue  3 SECTOR MODEL ★ govt. sector cash flows are included ○ govt. injects money thru spending on programs (social security and national park service) ○ govt. extracts money from households and businesses FINANCIAL SECTOR via taxes ★ summarizes behavior of banks and monetary fund given other financial situations to industries ★ balance of flows into and from this welfare sector (not a typo,, it rlly says that) funds from taxes ○ flows into: savings, taxes, and sss foreign capital assistance to the ○ flows from: investment, govt. households spending, and payments ———————————————————————————————— abroad INJECTIONS & LEAKAGES ★ explains the flow of funds in and out of an economy ★ injections ○ funds injected into the FOREIGN SECTOR economy, such as investments, govt. Spending, ★ turns closed economy to open and money from exports economy ★ leakages ★ foreign trade (imports and exports) ○ funds flowing out of the and foreign exchange (inflow and economy through household outflow of capital) savings, taxes paid by ★ formula: nx = x - m (eXport & iMport) households and businesses ↪ import - good/services purchased by to the govt,, and money households, firms, govts in one country BUT produced in another (we receive) spent on imports. ↪ export - goods and services produced in one country, but purchased by households, firms, and govts. of another country  BUSINESS CYCLE 2. peak ★ economy is maximizing its growth, ★ it refers to the economic consumer confidence peaks, wages fluctuations between periods of and spending rise, and increased expansion and contraction profits free up money for business ★ it allows people to understand the investment and expansion direction the economy (gdp) is going ↪ economic indicators: (growing or shrinking) and plan ★ economy stops growing accordingly ★ GDP reaches maximum ○ what is gdp? ★ businesses can’t produce any more ○ who is incharge of or hire more people fluctuation? ★ cycle begins to contract ★ economic growth is a long-term ○ example: philippine economy upward growth trend. but in the exceeds target, grows 7.6% short run, it experiences in 2022 fluctuations that produce wave-like patterns called the phases of the 3. contraction or recession business cycle ★ a significant widespread and prolonged downturn in economic 1. expansion activity ★ firms are on the rise and consumer ★ usually characterized by a decline in confidence grows GDP for 2 consecutive quarters (6 ↪ economic indicators: months) ★ increase in spending ★ associated w economic recession ★ increase in incomes (downward thread ang economic ★ production growth) ★ increase in sales (business ○ economic depression : severe perspective) and prolonged downturn in ★ inflation tends to increase economic activity ★ employment ★ a depression can be defined as a ○ example: traffic jams back in recession that lasts longer than philippine capital as officials three years or that results in a ease pandemic restrictions decline of at least 10% in annual ○ meaning establishments are GDP opening 1 by 1, going back to ↪ economic indicators: normal programming. ★ decrease in spending ★ decrease in production and employee  ★ unemployment increases shaped by events occurring many ★ decrease in sales miles away and vice versa” ★ decrease or stagnant income ★ inflation tends to decrease ──.✦ deterritorialization : ○ example: thousands may lose ★ geographical territory/place jobs due to covid-19 impact becomes less of a constraint on on business social interactions 4. trough ★ emphasizes the idea that social ★ marks the lowest point in the activities and exchanges can occur business cycle in a globalized world w/o geography ★ follows a period of decline after the acting as a constraint economy hits productivity ★ “people, services, and goods are ↪ economic indicators: available to reach other across the ★ bottom point in the contraction globe thru a variety of means and in ★ high unemployment and low increasingly immediate ways” spending ○ example: ph gdp shrinks.✦ time-space compression 4.2% in Q1 2021, marking : longest recession in recent ★ a spatial concept within geography history that talks about the metaphorical shrinking of our world due to ————————————————————————————————— developments in technology, communication, transportation, and capitalist processes making it easier GLOBALIZATION to connect and interact across geographical boundaries ★ the increased interconnectedness and interdependence of people and Q: what’s the difference between countries (via WHO) time-space compression vs ★ understood to include 2 elements: deterritorialization? the opening of international borders A: time-space compression refers to society to increasingly fast flows of goods, overcoming geographical boundaries via services, finance, people and ideas advancements in technology, ★ and the changes in institutions and transportation, and etc., while policies at national and international deterritorialization refers to the sharing of levels that promote such flows people, services, and goods across the ★ “intensification of worldwide social globe thus people losing connection to their relations that distant positions in a culture or social processes way where local happenings are.✦ IMPACTS of GLOBALIZATION: POSITIVE IMPACT NEGATIVE IMPACT TYPES OF GLOBALIZATION economic growth economic inequality.✦ POLITICAL : efficiency ★ refers to the growing importance of international political institutions, cultural exchange cultural agreements, and policies that homogenization influence or govern the relationships between nations technological loss of local jobs ★ involves the development of global advancements governance structures such as international organizations, treaties, and coalitions addressing ————————————————————————————————— transnational issues.✦ ECONOMIC: ★ refers to the increasing interdependence of national economies thru the global exchange of goods, services, capital, and labor ★ involves integration of markets, technology, and production systems across borders that enable business and industries to operate on a global scale.✦ CULTURAL : ★ spread of ideas, values, practices, and products across national boundaries that result in shared cultural experiences ★ leads to greater interaction between different cultures and the blending/influence of cultural practices worldwide, often facilitated by media, internet, and intl. travel SESSION 2.✦ FINAL GOODS AND GROSS DOMESTIC PRODUCT SERVICES: ★ end product of a process ★ a measure of the nation’s output ★ product/service being purchased by the ★ the total market value of the final goods consumer & services produced within the country INTERMEDIATE GOODS - other goods used during a given period for product and are not included in the ★ GDP - an indicator of economic computation for GDP performance in terms of aggregate output and productive capacity SITUATION: ★ a carpenter is building a chair, the market value of the following.✦ TOTAL MARKET VALUE: ★ FORMULA: QTY x PRICE PER UNIT materials used are: ○ wood = 180 php ★ does not only refer to the tangible goods ○ nails = 20 php that an economy produces ○ varnish = 50php ○ rice, mango, banana, pineapple, ★ he sells this chair for 220 php, so and coconut should we add the values in ★ other services that are not sold in the computing the contribution of the market but are still counted in the gdp carpenter’s business to the GDP? ○ public education & transpo ○ health care ANSWER: no, as the price of the final ○ national defense good/chair at 220 php already includes the ○ ‘isang kaibigan’ by inday sara value of all its components and is already duterte the total contribution to the gdp. including ★ ex: the intermediate goods would result to - rice, 5 kilos, 35php/kilo double counting and will mislead us - toothbrush, 5, 10php/unit - mouthwash, 3, 15php/unit SITUATION: - (5 kilos of rice x 35php/kilo) + (5 ★ your family dentist charges 500php for teeth cleaning for the materials toothbrushes x 10php/unit) + (3 and sterilizing. the assistant gets mouthwash x 15php/unit] = 270php paid 75php per patient. what is the dentist’s and assistant’s total but what if we add 20 toothpastes at 12php/unit? contribution for each patient? - (5 kilos of rice x 35php/kilo) + (5 toothbrushes x 10php) + (3 mouthwash x ANSWER: 500php as the 500 already 15php] + (20 toothpaste x 12php/unit) = includes the payment for the assistant 510php ──.✦ PRODUCED WITHIN ──.✦ DURING A GIVEN THE COUNTRY: PERIOD: ★ the world domestic in the concept of GDP ★ GDP is only concerned with new or only measures the final goods & services current production produced by economic activities within ★ old output isn’t counted in the GDP of the the country current calendar year because it was ★ even the final goods/services produced already counted back at the time it was by a foreign company based here in the produced. philippines are computed in the philippine ○ tldr: products or services that gdp (tldr: wherever the ‘foreign company’ were made in past years aren’t is placed, their GDP is computed based on included in the current year’s GDP wherever they are. not where the as it was included in said year’s company was based or where it GDP. originated) ○ even the final goods/services SITUATION: produced by a foreign company ★ noel is trying to sell a 20 year old based here in the philippines are house that’s believed to be haunted. computed in philippine GDP don karlo made a promise with noel that if he could sell the house, he’d SITUATION: give him commission. noel was able ★ acc. to the philippine statistics to sell the house for 5,000,000php office, based on the 2019 census of with a 500,000php commission population and housing (cph), the from don karlo. what’s the number of foreign citizens in the contribution fo this transaction to country is 177,368 as of may 2010. this year’s GDP? say they were able to produce a total of php 1 billion worth of goods & ANSWER: 500,000php as the services. Is this amount included in 5,000,000php was already accounted for in our gdp? that year’s GDP. ANSWER: yes, regardless of the ‘foreign citizens’, it’s included as it is within the country.✦ PARTS OF EXPENDITURE APPROACH EXPENDITURE APPR. : ★ consumption (c) - the spending of ★ GDP is calculated by adding up the total households on goods/services ike value of money spent by the four food, clothes, and entertainment from domestic producers (within economic sectors their country) ★ FORMULA: GDP = C + I + G + NX ★ investment (i) - spending of firms on ○ c - consumer, i - investment, final goods/services, primarily g - govt. spending, nx - net capital goods export ★ govt. spending (g) - the final ○ who buys? goods/services bought by the household national govt. and local govt. units in firms providing different social services to government the people foreign sector ○ transfer payments - ○ for what purpose? payments made by the consumption govt./other entities to investment individuals or groups that are govt. purchases made without any exchange net export of goods/services in return ○ if we combine.. soc. security households consume payments, subsidies, firms invest and benefit payments govt. purchases to ★ net export (nx) - the value of a provide social country’s total exports of services goods/services MINUS its total foreign sector buys imports. represents the balance and consumes a between what a country country’s domestic exports/sells to other countries and product what it buys/imports from other countries EXPENDITURE APPROACH EXPENDI. APP. + TOTAL MARKET VALUE HOW TO APPLY FORMULA: B. HOW TO APPLY FORMULA: 1. add consumers, investment, and govt. 1. discover and label the consumers, purchases investment, govt. spending, and export and 2. subtract export from imports import if there is 3. add that number to the total of c, i, and g. 2. multiply price to units of each sector 3. add them in total