DOC PREVIEW
CU-Boulder ECON 3535 - The Resource Paradox

This preview shows page 1 out of 2 pages.

Save
View full document
View full document
Premium Document
Do you want full access? Go Premium and unlock all 2 pages.
Access to all documents
Download any document
Ad free experience
Premium Document
Do you want full access? Go Premium and unlock all 2 pages.
Access to all documents
Download any document
Ad free experience

Unformatted text preview:

ECON 3535 1st Edition Lecture 3 Current LectureCurrent Events:- Obama State of the Union Address  over the course of 10 years = $320 billion in tax increases- 1) capital gain = appreciation of assets (stocks)o long-term capital gains  tax rate = 20%o Obama = 28%2) inherited assets - $400K stocks = $1M  $600K capital gain- Obama: tax capital gain on inherited assets  $120K = tax bill (20%)3) create a $500 tax credit for two-earner households with income cap 4) increase in childcare tax credit from $1,000 to $3,000 a year- 90% of top stocks = owned by 10% of U.S. population- middle class will have more disposable income to spend- interest rates won’t affect wealthy spendersThe Resource Paradox: 1) resource pricing2) currency a. GDP  net exports (NX) = measures current account trade i. $ value of exports - $ value of importsii. countries that export significant amounts of natural resources tend to have a +NX when resource prices are high iii. domestic exports > imports (X = +)  current account surplus3) currency tends to appreciatea. currency appreciation  domestic price of imports decreasesThese notes represent a detailed interpretation of the professor’s lecture. GradeBuddy is best used as a supplement to your own notes, not as a substitute.b. decreasing price imports for domestic consumersc. foreign buyers = prices rise4) exchange rates - assuming that exchange rates have little to no effect on the exports of natural resourceso a + b = domestic currency appreciation makes non-resource firms less competitive both domestically and in foreign markets - import substitution by domestic consumers  only natural resources are left; the economy becomes dependent on the export of natural resources- currency aligns with natural resource fluxuation - decreasing natural resource prices = depreciation of currency- big firms will ride out currency fluctuations, but smaller firms struggles immensely- governments will often open up markets in order to stabilize the economy- if natural resource prices increase, surplus exports occur  then, the currency appreciates  which causes import


View Full Document

CU-Boulder ECON 3535 - The Resource Paradox

Download The Resource Paradox
Our administrator received your request to download this document. We will send you the file to your email shortly.
Loading Unlocking...
Login

Join to view The Resource Paradox and access 3M+ class-specific study document.

or
We will never post anything without your permission.
Don't have an account?
Sign Up

Join to view The Resource Paradox 2 2 and access 3M+ class-specific study document.

or

By creating an account you agree to our Privacy Policy and Terms Of Use

Already a member?