The American Dream is an idea that suggests that all people can succeed through hard work and that all people have the potential and chance to live a happy and a life full of riches and prosperity. Each and everyone of us have dreams that we would like to fulfill, however unrealistic they may be. When comparing the two texts, The Great Gatsby by F Scott Fitzgerald and Death of a Salesman by Arthur Miller, the two main characters, Willy Loman and James Gatsby are characters that have been abducted by the American Dream and led to their downfall. James Gatsby tried to repeat his past with Daisy while Willy Loman tried to change his past to one that he was satisfied with. Both these dreams, that would give Gatsby and Loman a chance to live happily, led to the protagonists’ downfall. In the two extracts provided, we can compare the texts’ treatment of the American Dream including the differences in language, style of writing and the themes.

As for the reference to American Dream in both texts, Willy Loman and James Gatsby both are haunted by their past. Willy Loman has realized about his missed opportunity with Ben which could have provided the Loman family with welfare and prosperity. Willy’s hallucinations of conversing with Ben are clearly signs of him losing control of his life. This is soon brought into limelight to his family. His reach for a happier life, the American Dream as a salesman, brought his downfall. In the same way, Gatsby’s difficulty to forget about the past and move on shows the protagonist’s lack of control of his life. Gatsby’s past would be a woman, Daisy Buchanan, the love of his life, the woman he would die for. However, the same woman is the cause of his downfall as Daisy lives happily ever after with Tom while Gatsby was left in the dark and then shot dead. Gatsby’s dream is in the past and not in himself. Loman and Gatsby were, somewhat, living the American Dream until it ended with either a quest for a satisfactory past or re-creating past. In both pieces of literature, the protagonists’ thought felt if they were liked, then their dreams would come true.

There are a significant number of differences in the language in the two extracts provided. In The Great Gatsby, the concluding paragraphs are a lot more descriptive and more intellectual. With the use of enriching vocabulary such as ‘transitory enchanted moment’ and ‘something commensurate to his capacity of wonder’ shows the use of educated language. During the Jazz Age, majority of the population were well educated and classy hence the use of this type of language. The choice of words flow together creating a peaceful tone due to the appreciation for Gatsby’s life. The use of metaphors such as, ‘Its vanished trees, the trees that had made way for Gatsby’s house had once pandered in whispers to the last and greatest of all human dreams.’ On the other hand, the language in Death of a Salesman is a lot more cut-and-dry. There was no such thing as class in this book. Sentences such as ‘He don’t put a bolt to a nut, he don’t tell you the law or give you medicine’ shows that the language is basic and even grammatically wrong. The language used in these extracts is to describe the protagonists’ after their respective deaths. Clearly, Charley’s words for Loman sounds a lot more harsh due to emotionless sentences, ‘And when they start not smiling back – that’s an earthquake.’ The use of different types of language depicts the differences between the two texts. Nick, during this passage, praises Gatsby for his persistence on re-creating the past and comments on the futile quest of happiness that Gatsby was engaged in and Charley defends Willy as Biff criticizes his father and praises him for pursuing something he loved, being a salesman.

TERMS OF TRADE

Mathematically the terms of trade is an index that shows the value of a country's average export prices relative to their average import prices.

Equation: TOT = (weighted index of average export prices/weighted index of average import prices) x 100

The indices of export and import prices are weighted to reflect the relative importance of different goods and services to the country's export revenue and import expenditure.

Causes of changes in a country's terms of trade in the short run and the long run

short-run causes

• changes in the conditions of demand and supply - id he demand for exports changes, i.e if the demand curve shifts, then there will be a change in the price of exports. Prices of competitive goods in other countries may change, affecting the competitiveness of the exports, incomes in importing countries may change, affecting the demand for imports and consumer tastes may change for the goods and services that the country exports

changes in supply may also have a noticeable effect upon the price of exports. if a number of countries experience an increased supply of a certain product, perhaps because weather conditions are favorable, then its price will fall.

• changes in relative inflation rates - if the inflation rates in one country are higher than in another then their export prices will begin to rise. Although this results in an improvement in the TOT, the country's exports will start to be less competitive
• changes in exchange rates - a change in the value of a country's currency will lead to a change in the price of exports relative to imports. The change in exchange rate may be through market forces, or as a result of government intervention in the foreign exchange market.

Long run causes

• Income changes - rising incomes, especially in developed countries, lead to an increase in demand for secondary and especially tertiary products whose income elasticity of demand tends to be income elastic. The TOT of developed countries, which produce more secondary and tertiary products, tend to improve relative to the TOT of developing countries, many of whom are much more dependent upon the exporting of primary products, whose income elasticity tends to be income-inelastic. in effect changing world trade patterns
• long-run improvements in productivity within a country will lead to a gradual deterioration of the TOT for that country because their real prices will not rise significantly. However, the country's exports could be more competitive on the international markets and so the result could be positive, if demand for the exports is elastic.

Elasticity of demand for imports and exports

Price elasticity of demand for exports: measure of the responsiveness of the demand for exports when there is a change in the price of exports.

PEDexports = %change in demand for exports/ %change in average price of exports

if demand is elastic - a change in the average price of exports will lead to a greater proportional change in the demand for them.

Price elasticity of demand for imports: measure of the responsiveness of the demand for imports when there is a change in the price of imports.

PEDimports = %change in demand for imp. / %change in avg. price of imports

if demand is inelastic: a change in the price of imports will lead to a smaller proportional change in the demand for them.

Possible reasons for improvement

an increase in demand for a country's exports - Consider the exports from country A. Prices in other countries may have risen, making country A's exports more competitive; incomes in importing countries may have risen, increasing their demand for imports and so increasing demand for country A's exports

higher export prices caused by domestic inflation - relative export prices may increase because a country is experiencing inflation that is higher than in the countries with which it trades. If this is the case then there will be an improvement in TOT. Whether this improvement in TOT leads to an improvement in the current account balance will depend upon the elasticity of demand for the country's exports.

The significance of deteriorating TOT for developing countries

There has been a long run downward trend in commodity prices for many years caused by a number of factors:

• there have been substantial increases in the supply of commodities, mostly caused by improvements in technology.
• The discovery of synthetic replacements for natural commodities, such as synthetic rubber, man-made fabrics and plastics replacing metals, has contributed to the slow increase in demand for the natural commodities concerned.
• as developed countries have become richer and incomes have risen, the demand for commodities has not greatly changed, because their demand is income inelastic. at the same time, as incomes rise, the demand for manufactured goods and services have increased. demand for such goods tends to be more income elastic.

The deterioration in the TOT for developing countries that depend on commodities has several harmful consequences

• developing countries have to sell more and more exports in order to buy the same amount of imports. This is harmful enough, but in order to do this the developing countries then increase supply and this tends to push commodity prices down even more.
• many developing countries have high levels of indebtedness. falling export prices and thus export revenue make it harder to service their debt. Indeed, in extreme cases, this leads to countries having to increase their borrowing and increasing their levels of indebtedness. This vicious circle links to the previous one. In order to pay back their debts, many countries have to increase their output of the commodities in which they have a comparative advantage. This increases the supply and drives the prices down.
• in order to increase the supply of commodities and agin more export revenue, some developing countries have overused their resources, resulting in negative externalities such as land degradation, desertification, soil erosion and massive deforestation, which is clearly not sustainable in the long run
• commodity prices tend to be quite volatile. As a result , commodity exporting countries are quite vulnerable to circumstances beyond their control. The fact that export revenues can fluctuate significantly can make it difficult for governments to plan effectively for the future.

BALANCE OF PAYMENTS

Balance of payments

- Record of value of all transactions between residents of one country with residents of all other countries in world over given period of time

- Two main parts of balance payment accounts

o Current account

§ Measure of the flow of funds from trade in goods and services plus other income flows

§ Usually sub-divided into three parts

· Balance of trade in goods

o Known as visible trade balance

o Measure of revenue received from exports of tangible goods minus expenditure on imports of tangible goods over given period of time

o Exports occur when international transaction relating to goods/services leads to inflow of money into country

o Imports occur when international transaction relating to goods/services leads to outflow of money from country

o When export revenue greater than import expenditure à surplus on balance of trade in goods

o When import expenditure greater than export revenue à deficit on balance of trade in goods

· Balance of trade in services

o Known as invisible trade balance

o Measure of revenue received from exports of services minus expenditure on imports of services over period of time

o Banking, insurance and tourism

· Net income flows

o Net investment incomes – measure of net monetary movement of profit, interest, and dividends moving into and out of country over given period of time. Domestic firms set up branches in other countries and any profits being repatriated will count as positive item in this account. Profits sent out of country by foreign firms set up within country will count as negative item. Residents, institutions in country may have invested in banks and other financial institutions in other countries and any interest received from financial investments will count as positive item.

· Net transfers of money

o Payments made between countries when no goods or services change hands. Includes foreign aid and grants (government level). Includes foreign workers sending money back to their families in home country or private gifts sent from person in one country to person in another (individual level)

§ Current account balance = balance of trade in goods + balance of trade in services + net income flows

§ Current account balance is overall balance and may be in deficit or in surplus

o Capital account

§ Measure of buying and selling of assets between countries

§ Capital account called financial account in many countries

§ Measure net change in foreign ownership fo domestic assets

§ If foreign ownership of domestic assets increases more quickly than domestic ownership of foreign assets, there is more money coming into country than going out leading to capital account surplus

§ If domestic ownership of foreign assets increases more quickly than foreign ownership of domestic assets, there is more money going out of country than coming in leading to capital account deficit

- Assets can classified in different ways

o Assets representing ownership à buying property, purchasing business/shares

§ Asset to have positive return and make profits

o Assets representing lending à treasury bills, government bonds, savings account deposits. Simply borrowing and lending on international market

o Classified in other ways like FDI, portfolio investment

- Accounts will never balance in reality because there are too many individual transactions occurring for measurement to be precise

- Balancing item then put into accounts to ensure they balance

Consequences of current account deficit

- Foreign exchange reserves could be used to increase capital account to regain balance with deficit in current account. No country is able to fund long-term current account deficits from its reserves

- High level of buying of assets for ownership is financing current account deficit. Inflow into capital account is funding current account deficit, but not considered harmful because based upon foreign confidence in domestic economy. If foreign ownership of domestic assets become too much then threat to economic sovereignty. Drop in confidence could lead to foreign investors preferring to shift assets to other countries

- Financed by high levels of lending from abroad. High interest rates will have to be paid – short term drain on economy. Governments/people lending money may withdraw their money and place elsewhere

Consequences of current and capital account surpluses

- Current account surplus allows country to have deficit on capital account by increasing official reserve account. One country’s surplus is another country’s deficit leading to protectionism by other countries

- Current account surplus leads to appreciation of currency on foreign exchange markets increasing demand for currency. Will make imports cheaper reducing inflationary pressures and exports more expensive

Two ways to interpret size of country’s current account deficit or surplus

- Consider value of total

- Understand the magnitude of deficit if placed in context of country’s GDP

Methods of correcting persistent current account deficit

- Expenditure switching policies

o Policies implemented by government attempting to switch expenditure of domestic consumers away from imports towards domestically produced goods and services

o Government policies to depreciate or devalue the value of the currency à exports should become less expensive and imports should become more expensive

o Protectionist measures à government can attempt to restrict imports of products by reducing availability by quotas, embargoes. Leads to domestic consumers switching expenditure from imports to domestic products. HOWEVER, government reluctant to use such measures as they tend to lead to retaliation

- Expenditure reducing policies

o Policies implemented by government attempting to reduce overall expenditure in economy hence shifting AD to left. Expenditure of all goods/services should fall including expenditure on imports, current accounts deficit should improve. HOWEVER, conflict between external and internal objectives. Deflating economy could reduce current account deficit but policy leads to fall in domestic employment and fall in rate of economic growth

o Deflationary fiscal policies – increasing direct tax rates/reducing government expenditure

o Deflationary monetary policies – increasing interest rates/reducing money supply should increase capital flows from abroad because foreigners put money into financial institutions attracted by higher rates. Higher costs of borrowing due to high interest rate could act as disincentive to domestic investment and limit potential growth

Marshall Lerner Condition

- Rules that tells us how successful depreciation of currency’s exchange rate will be as means to improve current account deficit in balance of payments

- States reducing value of exchange rate will only be successful in total value of PED for exports and PED for imports is greater than one

- If demand for exports was price inelastic, price falls due to fall in exchange rate then proportionate increase in quantity of exports demanded would be less than proportionate decrease in price of exports and export revenue would fall

- If demand for imports price inelastic, price following fall in exchange rate, then proportionate fall in demand for imports would be less that proportionate increase in price of imports, import expenditure would increase

The J-curve

- Government facing current account deficit can reduce exchange rate of currency to make exports relatively less expensive and improves more expensive satisfying the Marshall Lerner condition of PED exports + PED imports is greater than 1

- In short run, current account deficit gets worst before getting better (J-Curve effect)

- J curve shows what happens to current account deficit over time when exchange rate depreciates

- Price of exports fall but communication not perfect therefore countries will take time to realize that price in this country has fallen

- Countries that have contract cannot be broken quickly either

- Therefore, PED for exports wil be inelastic and export revenue fall as prices have fallen by proportionately more than demand will have risen in short run leading to movement from X – Y

- Price of imports will rise but purchasers of imports will take time to find new suppliers and contracts cannot be broken so have to wait till expired

- Hence in short run, PED for imports will also be inelastic and import expenditure will increase as prices have risen by proportionately more than demand will have fallen leading to increase current account deficit adding to movement from X – Y

- Value of PED for exports and imports increases with time

- By the time current account deficit reaches Y, values of PED increases to point where the sum is greater than one so Marshall Lerner condition satisfied

- The less expensive exports and more expensive imports should lead to increased export revenue and decreased import expenditure, therefore, improvement in current account balance, Y – Z

4.5 International Economics Balance Of Payments

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4.5 International Economics Balance Of Payments

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human resources planning and business strategy

f managers do not make the most of their human resources then they will face a number of consequences known as the 5 r's:

· Recruitment: higher recruitment and induction and training costs

· Resources: increasing amount of resources and management time spent on dealing with personnel problems

· Reservations: lower morale and higher levels of uncertainty suffered by existing staff who experience constant change in staffing

· Returns: lower levels of labor productivity, competitiveness and profits

· Reputation: poorer corporate image, since the business cannot retain its staff

Personnel effectiveness refers to the measures that can be used to indicate the level of success of HR planning and management. Four main measures of personnel effectiveness are:

· Labor turnover measures the percentage of the workforce that leace the firm in a given time period usually one year. low labor turnover rate means that managers have recruited the right people for the job and that the existing employees are motivated at work.

· Absenteeism measures the percentage of the workforce not present at work withing a particular time period. low rate of absenteeism means that staff are motivated to work.

· Labor Productivity is a measure of the efficiency of the workforce by assessing the level of output of the staff.

· Waste level refer to the amount of waste products as a proportion of the firm's total output. higher level of wastage = more reworking that has to be done.

EQUATIONS

· Labor Turnover = (Number of staff leavers / total number of staff) * 100

· Absenteeism = (Number of absent staff / total number of staff) * 100

· Productivity = Total output / Number of workers

· Wastage = (Waste / Total output) * 100

changing employment patterns and practices

Changing Employment patterns and practices

Employment sector

- Three employment sectors – primary, secondary, tertiary

- Developed countries would have a larger tertiary sector

Ageing population

- Net birth rate in developed societies been decreasing meaning size of future workforce will fall

- Shortage in labor supply will affect workforce planning, recruitment and training

- Firms tend to retain older employees and be more flexible in keeping staff beyond retirement age

Flexible work structures

- Handy’s theory of shamrock organization suggests businesses will increasingly use fewer core staff in order to improve flexibility

- Reducing number of core staff and employing more part-time workers and peripheral workers will also help business reduce its labor costs

- Greater flexibility can mean that larger number of people work from home

- Many consequences of this include:

- Organizational restructuring – less likely to be traditional organizational structure as firm employs

- Flexi-time – staff are more likely to be allowed to work hours that suit individual needs

- Changing recruitment practices – firms shift to hiring more flexible workers

- Retention of core staff – key employees of an organization will need to be recruited for their outstanding skills and experience

- Training - firms will be less like to invest in training except for their core staff

Teleworking – working away from employers or customers by using electronic forms of communication such as telephone, fax and email. Frees up management time.

Homeworking – category of teleworking referring to people actually working from their home

- Advantages

- Geographical distance minimal

- Businesses do not need to locate call centres in bus city offices

- Absenteeism is not such an issue for teleworkers and homeworkers

- Employees do not need to travel to and from work

- Employees can enjoy autonomy in decision-making as working practices tend to be less formal than in a traditional office setting

- Workers can benefit from additional income tax allowances for using personal property to conduct business activity

- Childcare

- Disadvantages

- More distractions

Part-time employment

- Increasing number of people working part time because greater number of females and students who choose to work part time and the benefits of labor flexibility for employer

- Advantage in hiring more part time staff à cheaper to employ

- Part timers are entitled to lower pay and benefits

- Easier to replace when needed

- Large number of part timers keeps wages relatively low

- Easy to hire and fire

- Gives business more flexibility à hours worked etc

- Two main disadvantages

o Part time employees feel less valued and therefore less loyal

o Time and resources consumed in hiring, induction and training of the new staff

Flextime

- No fixed time for working

- Shift work is an alternative for flexi-time à different groups of people working at different time allocations

- Flexitime à requires employees to work a core period of day when they are expected to be at work

- Workers can decided after their fixed time when they complete their work as long as they meet deadlines

- Can extend normal working hours of a business thereby generating more sales

- Help reduce need for paying staff to work overtime

- Can improve firm’s image as it is seen be providing equal opportunities to staff who are unable to work standard hours due to their other important commitments

- Flexible work structures such as portfolio working and teleworking meant that avg numbers of hours worked is increasing

Portfolio working

· Person employed in a number of different jobs carried out simultaneously

· Usually temporary or part-time

· Increases flexibility and mobility of an organization

· Advantage

o Variety of experiences may contribute to a more fulfilling career

· Disadvantage

o Lack of job security

o May have not contracts at a particular time but have many at others

· Examples:

o Couriers

o Plumbers

o Electricians

o Gardeners

redundancy and dismissal

Dismissal is the termination of a worker’s employment due to unsatisfactory perfornace or breach of contract

- Incompetence – may lack ability, qualifications

- Misconduct – employee may exhibit unacceptable behavior

- Gross misconduct – may commit major bad behavior such as theft and fraud

- Legal requirements – does not have necessary skills or requirements for their job then the employer can legally dismiss the worker

Unfair dismissal occurs when employee is dismissed without valid reason. Court can demand reinstatement if dismissal not justified

Two main causes of unfair dismissal is discrimination and constructive dismissal – worker is forced into resigning from their position because the employer might have, example, changed terms and conditions of worker without any consultation

Redundancy occurs when employer can no longer afford to employ the worker or when the job ceases to exist

When a business has to lay off workers:

1) voluntary redundancy – occurs when employer asks for volunteers to be laid off and they are provided with a redundancy package (several months of pay)

2) compulsory redundancy – takes place when employer has to choose which workers to make redundant.

training

Training (P185) – Process of providing opportunities for workers to acquire employment related skills and knowledge

More or less will be needed depending on the nature of the job. (ICT vs machine operator)

Objectives:

1) Help staff adapt to change

2) Develop multi-skilled and productive workforce

3) Increase in quality o work (include cost service)

4) Increase in efficiency and effectiveness of staff

5) facilitate career and personal development of each staff members

Benefits of Training and Development

1) Better skilled and increase in flexible workforce à increase in targets being met (increase in productivity), increase in quantity also

2) Increase in competence à decrease in wastage and reworking

3) Increase in morale à Decrease in staff absent and less staff turnover, increase in chance of promotion for staff

4) Better recruitment quality à better candidates

5) Increase in levels of cost service

6) Workers adapt better to change

Advantages

· Having a flexible workforce allows to have workers who can multitask à less employment and labor costs as need less workers and can use more part time workers

Disadvantages

· Training and Development is expensive. Cost of courses is high and opportunity is lost while workers undergo training and development

Question 1) Explain the 3 types of Training. What are some advantages and disadvantages of them?

Induction training:

Training aimed at introducing new employees to the organization.

Advantages include:

· Good working habits and expectations are established from the start

· New recruits are helped to understand the corporate culture of organization

· The new recruit settles in quicker and can contribute to the organization sooner

· Morale is boosted as new recruits feel welcome and are confident and competent in what they do at work

Disadvantages include:

· Planning and preparing an induction program can be time-consuming

· Key personnel need to be freed from their other duties because they are involved in the induction program

· Information overload can be counter-productive as the new staff have to absorb so much fresh information

On-the-job training

Training carried out whilst at the workplace (example – training can be delivered by a head of department or other specialists)

Advantages include:

· Relatively cheap

· Fewer disruptions to daily operations

· Help establish relationships at work

· Location is convenient for employees and employers

Disadvantages include

· Trainees may pick up bad working habits

· Trainers will not be able to conduct their own whilst giving training

Off-the-job training

Training carried out off-size, such as at a tertiary college or hotel conference room

Advantages include:

· Experts used to provide training

· There are no distractions from colleagues and other staff as training in ICT, foreign language and first aid

· Networking can take place, whereby employees get to meet other people who can form the basis of business contacts

Disadvantages include:

· Potential loss of output whilst employee attends training course

· Finding time to cascade information from training course can be difficult task