Loom Bands - A demand and supply example (and activity)

Friday, September 19, 2014
by Jonny Clark

If, like me, you spent much of the spring and summer of this year being 'gently persuaded' to purchase loom bands and their paraphernalia, you may find this short presentation and task on demand and supply of the product useful.

For many weeks, it seemed almost impossible to undertake a shopping trip with my youngest son without him pointing out the huge selection of available bands and their construction tools.  He built up quite a selection or different colours and styles as my vacuum cleaner can happily testify.  Then I noticed a tailing off of his requests and noted that this week, when I pointed out a shop selling the rubber bands at half price, he declared that he was no longer interested - even at the reduced rate compared to just 4 weeks ago.  

He seemed less than impressed when I pointed out how this was a fine example of how demand and supply impacts upon price.  However, many of you may be at the stage where you are going through demand, supply and equilibrium with your AS students.

This resource is very short.  It starts by setting students the task of drawing the demand and supply of loom bands over 3 stages; the initial rise in their fashion, the change in production techniques to reflect increased supply and then the inevitable fall in loom band attraction.  Give your students 5 minutes to draw all 3 and then use the rest of the presentation to run through the answers. 

Click here to download the resource 'Demand and Supply of Loom Bands

Forex markets respond to NO

by Penny Brooks

Sitting watching Alex Salmond acknowledge the results of the Scottish referendum, there is a great example of the speed with which the foreign exchange markets respond to news. Sterling fell significantly in value over the last two weeks, with polls suggesting that the 'Yes' campaign was much closer to a win than had previously been expected. However, as the vote closed on Thursday evening, exit polls were indicating a win for the 'No' vote, and, as the chart from Bloomberg above shows, the global 24-hour foreign exchange market showed an immediate and dramatic response in demand for the pound, as the uncertainties associated with Scottish independence were removed. 

Against the euro, the pattern is very similar:

Both charts show how swiftly currency traders need to move in order to maximise their profits - leave the desk for a coffee, or hesitate for a while before making their move, and the rate at which they sell can be drastically different. Delaying for six minutes after the high point just after 9.30pm could have meant a loss of over £3,000 on a sale of £1mn.

China invests in India’s infrastructure

Thursday, September 18, 2014
by Bob Hindle

Narendra Modi’s term as India’s Prime Minister is in full swing, with a ‘Modi bounce’ seen in recent figures for FDI and an upturn in the rate of economic growth.  Optimism is high that change for the better is underway in developing an infrastructure that can support India's 1.2 billion people.

Inward investment has begun to rise with optimism over much needed legal and tax reforms that make it easier for foreign companies to do business, though the entry of UK companies remains sluggish.

This week sees China’s President Xi Jinping meet Modi in India for the first time and Thursday’s announcement that China will pump $20bn into India’s infrastructure improvement. Where China can help is in the expertise required to mount the large scale projects that Modi knows are essential to keep India’s population mobile and the labour market more flexible. It will also create jobs. India’s parliament recently approved legislation that means railway investment can be 100% foreign owned and funded. Indian Railways simply hasn’t the funds to rebuild at the scale required. In Mumbai, occasional escalators on Western Railway stations are about the level of progress seen in recent years.

It is fairly true to say Modi plans to model India’s economic development on that of China and Singapore, not the UK and US, describing Gujarat, where he made his name as a politician and economic reformer as “India’s Guandong”. A case in point is the government’s recent decision not to support the loss making factory that produced the Ambassador motor car. Public Private Partnerships are the future, not nationalisation.

There’s a good Datablog in The Guardian that compares the world’s two most populous countries, with India well behind in female participation, adult literacy and in healthcare, though ahead on press freedom [just] and a lower rate of unemployment.

Modi wants every Indian to have access to a bank account, helping to support the poor in their applications for financial services and reducing inequality. This is also a way to avoid making government payments through corrupt officials. He wants India to replace its ‘red tape culture’ with a ‘red carpet mindset’ and has told all government offices to clear corridors of the excess filing cabinets, random furniture and bric a brac that have come to characterise them.

The Rupee has risen slightly against the US Dollar and the Reserve Bank of India has raised its Dollar purchases, ready to intervene in case of the expected impact of the end of QE by the Federal Reserve.

No wonder that the OECD now sees India as one of the fastest growing world economies going forward.

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