My trip to Brazil - The Olympics, Market Failure and the Exchange Rate
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Last week I was given the opportunity to go to Rio to compare the Brazilian education system to our own. Whilst there I thought it would be interesting to look out for any interesting economic stories for the blog. This is what I found.
I couldn’t help but notice how positive everyone seemed to be about Rio securing the Olympics in 2016, with many expecting growth to skyrocket after the event. It may be interesting for your students to use this article to discuss the economic impact of an Olympics on the host city.
The inequality of income in Rio is a great example of market failure. I was lucky enough to see a school in the middle of the second biggest favela in Brazil. There I saw that many in Brazil have not benefited from economic growth and live in appalling conditions surrounded by drugs and violence. (We drove past a drug dealer carrying an AK 47!) Click read more for some questions on market failure
The Brazilian Secretary of Economic Policy believes the currency has to weaken by 19% to allow for strong economic growth in the country. Students can use the mnemonic, SPICED to remember the effect of a strong currency. Strong Pound Imports Cheap Exports Dear. Click read more for some questions on exchange rates
Market Failure
Explain two types of market failure (6 marks)
Discuss possible strategies for Brazil to reduce inequality of income in their country (6 Marks)
Exchange rates
Explain how exchange rates are determined (4 marks)
Explain why the Brazilian Secretary of Economic Policy would like the Brazilian Real to be weaker (4 marks)
Explain how a government could weaken their currency (4 marks)
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