Economics Essay Example | Topics and Well Written Essays - 750 words - 2

Economics - Essay Example This way corn serves a two-way purpose and that will definitely increase its demand. Corn and soybean are considered as substitutes and according to economic theory if demand for a product raises then the demand for its substitute will obviously decline. Following this principle the price of the soybean will decline. Again corn and soybean shares the same habitat for production, especially the prime raw material for any agricultural production the land. Now an increased demand for corn will also lead to a higher price for the same, since price and demand are directly correlated. A product that is offering higher price will definitely translate into higher profit for the producer and an immediate shift from production of soybean to that of corn. Higher percentage of land and effort will now be directed towards corn production than that of soybean (Pearce, 2006). The above discussion seems economically sound, however a careful investigation might reveal that this holds for short run. O nce the producer starts to devote more land and other raw materials to the production of corn, corn production will rise and production of soybean will fall. Hence in long run owing to higher supply of corn its price will come down and that of soybean will go up as it is scarce now. These points to the fact that in long run an eventual equilibrium will be reached where both will be produced at an optimum level for the economy. Last but not the least since, energy has an ever increasing demand, hence if corn can project itself as a viable source of alternative energy in long run that have enough potential to replace fossil fuels then the trend for substituting soybean production land and raw material in favor of the corn might show a sustained trend, with soybean production looking for an alternative way as itself is a nutritious and valuable food source along with a rich source for food oil. It is obvious that since there is high need of alternative form of energy and that especiall y of bio fuel; corn oil as an important source of bio fuel will enjoy this boom in demand and price for this product will go up. The magnitude of this rise in price is subject to much debate. First of all if demand for a product is matched by its supply then the rise in price is minimal or zero. However if this is not the scenario that is there is excess demand then the price will go up. Interestingly it is worth noting that in case of excess supply the price might also go down even courting a rise in demand for the concerned product. The excess supply often follows a rise in demand owing to the behavioural pattern of the producer who might over estimate the rise in demand and increase his supply of corn in tune of his expectations. Apart from this demand-supply interaction, many other factors do operate while determining the fate of the corn oil. If people are well aware of the potential that corn oil holds as a fuel and alternative source of energy that will definitely translate i nto higher demand. Again this has to be also undertaken into the realm of analysis that whether any other form of substitutes to corn oil does exist, that might be cheaper, easily available in plenty and better source of energy. As a viable source of alternative energy in the long run corn oil will face quite a competition with Jatropha and Pongamia pinnata (Bridgewater, Halford and Karp, 2010, p. 236) and that outcome will

The Development and Acceptance of Labor Arbitration Essay

The Development and Acceptance of Labor Arbitration - Essay Example The regulations set in this case do not allow for concessions, therefore it sets clear guidelines to ensure that the bargain is done in good faith and to the benefit of both parties. Arbitration process involves the appointment of a third neutral party (an Arbiter) who will be charged with the duty of holding formal and informal hearings concerning the differences. The Arbiter will then from the facts drawn from the hearings make a conclusion that binds the two warring factions. His decision must be respected as it is enforceable by the law (Coleman, 1997, pp.36-38). This research paper will look into the historical context of the development and acceptance of the arbitration process in the labor field, particularly during the period and prior to WW II and through the war. The paper will also look at one significant case (Morse's Leadership) which resulted into a great impact on the management of labor relations in the past. Arbitration is as old as humanity and has been used in the world over to settle disputes between people and even among nations at war. This paper will zero in on industrial labor arbitration between employers and employees prior and during World War Two. The concept of arbitration was used to prevent the differences between the parties from escalating into chaos and turning tragic due to workers' strikes. The concept became a vital requirement in the 20th Century with the rapid industrialization and formation of labor unions (Hinchcliff, 1991, p.231). In the United States, it started in1935 with the passage of NLR (National Labor Relations) Act and proceeded into and during the WWII. President Roosevelt Franklin saw the need to help iron out the differences in industries that produced steel and other war materials so that the ensuing labor differences may not escalate and lead to shortage war paraphernalia (Hinchcliff, 1991, p.251). Far much more than the World War One, the World Wa r Two involved aggressive commitment of all nations in the globe. The whole human resources as well as the economic resources were directed to combat the vice. Both combatants and the non-combatants were affected and the expansion of the battle field to cover the enemies' boarders dealt a big blow to the world economy. The ability of a country to survive the war was therefore determined by its capacity to handle industrial and personnel requirement during the Great War. These two sectors which were already strained the war only aggravated the situation. There was a need to keep the human capital under control and at the same time produce enough to run the demands of the war. At its infancy, the law was never at all friendly with arbitration of any form. It was viewed by many as a means of overshadowing and usurpation of the judiciary. The courts were very hostile with it establishment. Their view was that the system was geared to drive them from the office and be rendered jobless through complete ousting of the jurisdiction process (McKelvey, 1957, p.14). To counter the new development, the courts declined to order specific performances of an executor for arbitration and also refused to allow for anything over the nominal damages for a breach of an

Oral history archive department in modern libraries, Essay Example for Free

Oral history archive department in modern libraries, Essay The main aim of the research is to discuss the uses and the value of an oral history archive department in modern libraries, especially British libraries and American ones which are pioneers in this domain. It has been realized or discovered that the oral history archive can be used to explain the concept or idea of windowing time in physical and digital libraries. Of late digital and oral history archive libraries carry a variety of useful information and documents that include the past and present ones. This paper therefore tries to view the use and the value of this kind of sound archive in which it is divided into main categories and subsections. The first section is the introductory part that tries to give a brief explanation about the oral history archive. There is a problem in question or objective, which touches on what is to be investigated that is the use of this archive. The hypotheses are also constructed to provide answers to the objectives of the research. The other areas include research context/literature review; methodology; work plan; recourses; ethics and conclusion. 1. Working Title The use and the value of an oral history archive department in Modern Libraries and Information Centres. 2. Introduction. Many scholars realized that Oral history archive libraries can be used to obtain information as fast as possible. According to Portelli (1998), the archive holds several hours of gramophone, films, audio, video and Compact Disks. The oral history archive has been of great help in various departments because instant information has been obtained through what is called oral debriefing. This is a situation whereby a comprehensive and condensed verbal testimony is obtained from individuals (Medical Tribune 2007). Other areas where the oral history archive has been applied include areas such as psychology, witness interrogation in criminal investigations, which occur in both oral and visual formats (Sangster 1998).The archive tentatively is currently being used to help in knowledge management especially when it comes to labor market. This is an area in commerce and industry where the changing labor market requires employees to shift from one position to another or from one job to another. As this happens there is loss of organizational memory, the so called the body of data and knowledge which is relevant to an individual organization’s existence (Perk and Thomson 1998 and Gregory 1991). These therefore are of the uses of oral history archive that make it become recognized as a powerful device or tool especially in Britain to capture the already existing institutional knowledge and information. Learning has been enhanced by the use of Oral history archive. The new curriculum requires students to have sound and good communication skills that prepare them to answers questions either during interviews as they look for jobs after schooling or in classroom (Rolph 1998). Criminal investigation department also employ the use of an Oral history archive when they are interrogating criminals. 3. Aims and objectives In this section, the paper discusses the problem in question or the objectives of carrying out the research. Oral history archive has been viewed as a unique and powerful tool by people. In order to clear this perception and make things more clear, this research paper tries to answer the question. The problem to be researched on is therefore the value and the use of an oral history archive in modern libraries and information centres and why people view it as a useful tool in modern libraries. The paper shall also look at the role, if any, of the information specialist of the future in an oral history department and the skills the information specialist must have to operate in such a department. Besides, the paper shall also look at and address the question of how interviewing targets are chosen by the oral history department, how expensive it is to put up an oral history department from scratch at the various libraries, why people view it as a useful tool in the modern libraries and the skills that are required by an information specialist in order for him/her to be able to operate in the department. Today, many educationists are being encouraged to introduce oral history as a powerful tool for serious scholarships in all universities in order to encourage learning. However, there are a number of universities that have introduced and developed extensive collections of oral history while others have not realized the usefulness of the library. For example; Harvard, Princeton and University of California have taken the lead in the development and introduction of oral history archive (Gowers 2006). In addition, the university libraries mentioned above in this domain have operated smoothly from 1955, the British Library has been the pioneer for a lot of researchers of this topic. The reason is simple. The Sound Archive Department of British Library at the present time holds over a million discs, One hundred and eighty five thousand audio tapes, and a lot of video and sound records. These collections which include written literature, dramatized stuff, and music recordings plus sounds of wildlife are collected from across the world. They entail cylindrical equipment created in the nineteenth century to the most recent Compact Disks, Digital Versatile Disk and mini discs. 4. Scope and Definition In order to discover the use and the value of an oral history archive department and to create a sensible project in range and time, the scope of the project will focus mainly on the opinions of curators, librarians and others who are working in this sector. It is important though to be aware that this will emphasize basically on personal viewpoints and changing theories and therefore might not provide a perfect answer. It will also be necessary for the research to stay neutral and determined on the questioners and not go beyond the objectives set as those working in these departments will be more involved with the issues concerning their departments than be drawn to the personal issues. 5. Literature Review The literature review section tries to look at what other scholars have discussed about the same topic to be researched on. This is very important since it avoids or solves cases of duplication of other people’s work. Since other people or scholars at one time had realized the importance of Oral history archive in the modern libraries, it is therefore in order to access their ideas on the topic. The oral history archive has been viewed as a useful tool in a number of areas such as psychotherapy, witness interrogation in crime investigation and learning institutions that are provided in both oral and visual formats (Rolph 1998, Gregory 1991, Parker 1999 and Sarah 2004). According to Ritchie (2003), oral history has useful information or materials that are often ignored by librarians. This is also sometimes overlooked in relation to cost value calculation (Swain 2003). The archive has played a key role in helping in audio collection, attitude and value clarification as well as necessitating multi-media approach to learning (Christel 2006 and Thomson 2000). The most obvious area where oral history archive has been used according to Perks and Thompson (1998) is in learning institutions. This is a case where a tape recorder is used in classrooms to help students understand the concept being taught in class room. However, it has been noticed that a tape recorder has not been effectively and efficiently used as compared to the use of movie, slide or overhead projectors (Lukenbill 2002). One advantage when one uses a tape recorder is that it can be stopped anytime especially when the instructor wants to emphasize important points or to allow urgent questions arising (Thompson 2000). Tapes can also be replayed to enhance re-examining or revisiting and requesting of any order that is desirable. Proper understanding of the lesson is therefore emphasized. Since the new curriculum requires students to have skills in understanding comprehension, analysis and evaluation. Oral history has been of great use to check and examine all these concepts. It is also noted that oral communication skills are very important when it comes to times of interviews where questions are phrased (Swain 2003). The interviewer and the interviewee have to be clear and precise especially in calling for specific information. The questions asked especially during the interviews need also to be answered in the most accurate manner as possible (Ritchie 2003). According to Perks and Thompson (1998), accuracy actually plays a major role in interviews and this can be facilitated by the use of oral history archive. The concept is also emphasized by Seale (2004). As a way of facilitating learning, oral history archive through the use of tapes has facilitated immediate feedback during teaching in schools. This has been done in connection with other secondary sources like books more so in secondary schools. Students’ needs are addressed as soon as possible. This rules out cases of negative delays which is commonly experienced in the traditional scholarly research where numerous collections are required (Thompson 2000). A good teacher who knows how to use tapes only needs to locate appropriate tapes in which he is expected to prepare summarized notes according to students’ understanding. This should be done after testing the entry behavior of the students before opting to use the tapes for instruction (Parker 1999). Oral history archive has also been helpful in clinical libraries (Schacher 2001). Clinicians when giving psychotherapy to patients who are mentally disturbed have used the information contained in the Oral history archive. Such patients may be suffering from Schizophrenia or psychosis (Schacher 2001 and Thompson 2000). As patients talk about their illness the clinician is able to come up with appropriate measures to provide assistance.

Tesco The Customer Relationship Champion Marketing Essay

Tesco The Customer Relationship Champion Marketing Essay The Tesco story dates back to 1919 when Jack Cohen, an ex-army man, setup a grocery business in Londons East End. In 1924 Cohen purchased a shipment of tea from a company named T E Stockwell. He used the first three letters of this companys name, added the Co from his name and branded the tea Tesco. Reportedly, he was so enamoured of that he named his entire business Tesco. The first store under the Tesco name was opened in 1929 in Burnt Oak, Edgware. The company grew rapidly in the years that followed, and evolved into a general food retailing outfit. By 1930, around 100 stores were operating under the Tesco Label  [1]  . Realising that the self-service mode of running supermarkets prevalent in the USA worked out much cheaper than the traditional mode of and enabled companies to offer their merchandise at lower prices, Cohen decided to adopt the same for Tesco stores. In 1948, the first self-service Tesco was opened in St Albans. Over the next few years, Tesco grew to 400 stores many of which were purchased by Cohen from other smaller shopping store chains in the country. In the early 1960s, the company began selling clothing, household goods and fresh food in addition to groceries. Tesco pioneered the large format stores concept in the UK with the launch of a 16,500 sq. Ft. store in Leicester in 1961  [2]  . A Master in CRM: Every three months, millions of people in the UK receive mailers from the countrys number one retailer, Tesco. Nothing exceptional about the concept all most all leading retailers across the world send out mailers/magazines to their customers. These initiatives promote the stores products, introduce promotional schemes and contain discount coupons. However what sets Tesco apart from such run-of-the-mill initiatives is the fact that Tesco mass-customises these mailers. Every mailer has a unique combination of articles, advertisements related to Tescos offerings, and third party advertisements as well. Tesco ensures that all of its customers receive mailers which contain material suited to their lifestyles. The company has worked out a mechanism for determining the advertisements and promotional coupons that would go in each of the over 150,000 variants of the mailers. This has been made possible by Tescos world-renowned CRM strategy framework. The Clubcard scheme (launched in 1995) laid the foundations of this CRM framework that made Tesco post growth figures in an industry that had been stagnating for a long time. The data collected through Clubcards formed the basis for formulating strategies that offered personalised services in a cost-effective manner  [3]  . CRM The Tesco Way: Tescos efforts towards offering better services to its customers and meeting their needs can be traced back to the days when it positioned itself as a company that offered good quality products at extremely competitive prices. Even its decision to offer premium end merchandise and services in the 1970s was prompted by growing customer demand for the same. In 1994, the company launched the One in Front scheme to reduce the time customers had to spend waiting at check-out counters. Under this scheme, Tesco store personnel ensured that if there was more than one person at any counter, another counter would be opened for the person in the line. In this way none of the customers have to wait at the check-out counters. Of course, it is not possible for Tesco to adhere this policy during peak trading hours. Nevertheless, this effort to improve customer was appreciated by customers  [4]  . The biggest customer service initiative (and the first focused CRM drive) came in the form of the Clubcard which was launched in 1995. This initiative was partly inspired by the growing popularity of such schemes in other parts of the world and partly by Tescos belief that it would be able to serve its customers in a much better (and profitable) manner by using such a scheme. Tesco knew that at any of its stores, the top 100 customers were worth as much as the bottom 4,000 (in terms of sales). While the top five percent customers accounted for twenty percent of sales, the bottom twenty five percent only accounted for only two percent. The company realised that by giving extra attention to top customers (measured by the frequency of purchases and the amount spent), it stood to gain a lot  [5]  . In May 1994, Tesco began testing the Clubcard loyalty scheme at two of its stores for a period of six months. The scheme started off like any other loyalty card scheme. Customers became members by paying a joining fee and providing personal details such as name, address, date of birth, e-mail, family composition, dietary requirements and product preferences. Impressed with the programs results over six months, the company introduced the scheme in all of its stores by February 1995. All the transactions were linked to individual customer profiles and generated over 50 Gigabytes of data every week. The analysis of the data enabled Tesco to accurately pin-point the time when purchases were made, the amount customer spent, and the kinds of products purchased. Based on the amount spent and the frequency of shopping, customers were classified into four broad categories: Premium, Standard, Potential and Uncommitted Further, profiles were created for all customers on the basis of the types o f products they purchased. Customers were categorised along dimensions such as, Value, Convenience, Frozen, Healthy Eating, Fresh and Kids  [6]  . Tesco also identified over 5,000 need segments based on the purchasing habits and behaviour patterns of its customers. Each of these segments could be targeted specifically with tailor-made campaigns and advertisements. Tesco also identified eight primary life stage need segments based on the profiles of its customers. These segments included single adults, pensioners and urban professionals among others. Another classification of customers developed from the insights generated through data mining. Using this information regarding the classification of customers, Tescos marketing department devised customised strategies for each category. Pricing information and product related decisions were taken after considering the preferences of customers. Also, customers received communications that were tailored to their buying patterns. The data collected through the Clubcard scheme allowed Tesco to modify its strategies on various fronts such as pricing, inventory management, shopping analysis, customer acquisition, new product launches, store management, online customer behaviour and media effectiveness. The data generated by Clubcard was used innovatively, e.g. special attention give to expectant mothers in the form of personal shopping assistants, priority parking and various other facilities. Tesco also tied up with airline companies and began offering Frequent Flyer Miles to customers in return for the points on their Clubcards. Reaping the benefits: The data collected through Clubcard allowed Tesco to target individual customers (the rifle shot approach), instead of targeting them as a group (the carpet bombing approach). As the customers receive the coupons which matches their buying patterns, over twenty percent of Tescos coupons were redeemed as against the industry average of 0.5 percent. Customers falling in different categories receive mailers which are specifically for them. The mass customisation of these mailers also attracted third-party advertisers, since it assured them that their products/services would be noticed by those very customers they plan to target. Naturally, Tesco recovered a large part of its investment in this exercise through revenues generated by third-party advertisements  [7]  . When Tesco discovered that around 25 percent of its customers, who belonged to the high income bracket were defecting to rival Marks Spencer, it developed a totally new product range, Tesco Finest to lure back those customers. This range was then promoted to affluent customers through personalised promotions. As planned, the deflection of customers from this segment slowed down considerably. From Customer Service To Customer Delight: To sustain the growth achieved through the launch of Clubcard, Tesco decided to adopt a four pronged approach: launch better, bigger stores on a frequent basis; offer competitive prices (e.g. offering everyday low prices in the staples business); increase the number of products offered in the Value range; and the focus on the remote shopping services (this includes the online shopping venture). To make sure that its prices were the lowest among all retailers, Tesco employed a dedicated team of employees, called price checkers. This team checked and compared Tescos prices with those of other companies on a weekly basis. The company even helped its customers to compare prices by providing the information on Tesco.com  [8]  . Recommendations: Even though Tescos CRM efforts have resulted in superior financial performance and market share, the company has to look at its customer service standards. Tesco have spent so much time improving the way their stores look, the range of products they sell and their service processes that they may have temporarily overlooked the impact that their people can make on customers through their behaviour, they need to re-address this issue. Tesco should launch initiatives like Every Customer offered Help (ECOH). As part of ECOH, all employees should be given clear instructions about the way in which they are expected to deal with customers. Employees at the check-out counters, for instance, should be asked to be very particular about greeting the customers, offering the help to the customer and finally, wishing customers a good day. Store managers should be empowered for making the ECOH initiative successful, and they should participate whole-heartedly in the scheme. Tesco should also realise that Clubcard initiatives was just one part of the overall thrust on CRM and customer enhancement is needed to survive and excel in the intensely competitive British retail industry. Tesco therefore have to take host of initiatives in its stores to further the thrust given to customer service. Tesco should also introduce new scheduling system for the store employees to increase customer satisfaction levels. Tesco should also make it mandatory for all employees (including top level executives) to spend some time every year in the stores to help them to get acquainted with the nuances of customer service. This program will help Tesco employees to ingrain customer service as a company philosophy in all employees and it will also result in the development of many innovative ideas. Unlike Asdas customer service program, Tescos program should not require employees to get too personal with customers, as Asda have posted employees at the entrance doors to greet customers. To ensure that its CRM efforts are backed by a strong operational framework, Tesco should pay special attention to controlling costs and streamlining its supply chain. In association with its suppliers, Tesco should try to remove all non-value adding costs. Tesco should also collaborate with its suppliers to develop a Lean Thinking approach, which should focus on smart and efficient working.

Process of Hiking The Appalachian Trail :: Health Nutrition Diet Exercise Essays

Process of Hiking The Appalachian Trail The Appalachian National Scenic Trail, is a footpath in the eastern United States for outdoor enthusiasts, extending about about 2140 miles from Maine to Georgia, along the crest of the Appalachian Mountains. The trail passes through 14 states and is maintained by 34 different trail maintenance organizations. It is the longest marked, continuous footpath in the world, at some points reaching elevations of more than 6000 feet. Wooden signposts and white paint marks on rocks and trees are placed along the trail. Construction of the Appalachian Trail was begun in 1922 near Bear Mountain, New York. By 1937 the footpath, extended from Mount Katahdin, in Maine, to Mount Oglethorpe, in Georgia, and was ready for use. Later, (after 1937) the trail officially ended at Springer Mountain, 10 miles northeast of Mount Oglethorpe. In 1968 the Appalachian Trail became part of the National Park System and was officially renamed the Appalachian National Scenic Trail. To hike the Appalachian Trail, it is suggested to shop around for a good pair of hiking boots, a tent, and a sturdy backpack. Hiking the distance mentioned above obviously requires excellent footwear, and a light pack. Figure in fatigue and you need a comfortable tent to sleep in at night. Good boots are "solid" on the bottom, so that you cant feel rocks or stones through the soles. If you can press in the bottom of the sole with your thumb, the soles are probably too soft to give your foot proper protection. The top of the boot should be stiff to hold the ankle in place and provide it with good support. While it's possible to treat non- waterproof fabric boots with liquid silicone, it generally doesn't waterproof the boot enough to be useful. Stick with leather boots that can be treated with Sno-seal, beeswax solution, or other waterproofing solutions. Feet change over time, as do shoes. Wearing a pair of shoes and/or hiking boots changes the shape of the shoe to fit your foot. Eventually though, the reshaping causes the shoe to rub places on the foot, causing blisters. All boots are made on different "lasts". The last is the "form" the boot is built around at the factory. The size and shape of these lasts, even between identical sizes of boots, can vary greatly. For instance, some boots are built around a European last which is typically narrow in the

21 Balloons :: essays research papers

The 21 Balloons Text to Self: When Professor Sherman was taking off in his hot air balloon people started running down the streets to look. People were also running down the streets to get Ichiro bobble heads at a Mariners game. Text to Text: When Mr. Sherman saw the mines full of diamonds it made me think about the book Treasure Island when Jim Hawkins finds all the treasure. Text to World: As soon as Professor William Waterman Sherman started walking on Krakatoa he experienced earthquakes. The same thing happened to a lot of other countries. Vocabulary word. Definition. A sentence including the vocabulary word. Corinthian: a type of design used in some countries. The building was built in a Corinthian style. Flotsam: goods or belongings lost in a shipwreck. There was not a lot of flotsam in the water at the time. Tribune: the title of a newspaper. The New York Tribune covered every detail of Professor Sherman’s story. Rousing: to be full with happiness or excitement. The whole city gave the firefighters a rousing cheer. Cupola: a round, dome-like shape usually the top of a building. Many of the buildings in the city had a cupola for the top. Convey: to take an item from one place to another. UPS has to convey a lot of letters and packages on a regular bases. Aeronautical: a study of science that has to do with the air. There are some aeronautical scientists in the world. Postillion: a mailman or paperboy. Being a postillion lets you earn some extra cash. Ethics: to behave properly. Martha Stewart is suspected of having poor ethics. Intrepid: not to be discouraged. Even though he lost the race, the boy was intrepid. Chapters 6,7 Schema Text to Self: When William Sherman woke up in the morning he hadn’t really realized how his room looked. That happened to me when I got a new bed and new stuff put in my room. Page 77   Ã‚  Ã‚  Ã‚  Ã‚  When Sherman sees and feels an earthquake happening I can relate because I have also experienced an earthquake. Page 79   Ã‚  Ã‚  Ã‚  Ã‚  Mr. Sherman was told that the I family made Italian food, I have eaten Italian food. Page 90 Text to World: When Mr. M started building houses on Krakatoa that was like when a missionary went to an island to help the inhabitants rebuild their small residential area and convince them to believe in God. Vocabulary word. Definition. Sentence containing the word. Delirious: in a state of delusion. She was delirious after she woke up from the anesthesia.

China’s Renminbi: “Our Currency, Your Problem” Essay

Our Currency, Your Problem is a case involving the issue of exchange rate regimes and the impact currency manipulation has on economies and trade. The United States and Europe argued that the Renminbi (RMB) was undervalued and claimed that the People’s Bank of China (PBoC) deliberately manipulated the exchange rate to lower the prices of exports, which caused the US and Europe to run huge trade deficits with China. The US and Europe felt that the RMB was undervalued for several reasons. One reason is that China’s exports had dramatically increased, growing 30% from 2004 to 2005, making China the third largest exporter in the world and accounting for 6.5% of the world’s export. Another argument was that China’s inflow of FDI had become the second largest in the world by 2004. The Chinese argued that their currency was not undervalued, that the policy of the PBoC benefited the US by helping them finance its huge budget, that even though they ran trade surpluses with the West they ran deficits with Asian countries, and that a low currency rate benefited multinational companies investing in China. Meanwhile, Japan and the newly industrialized economies (NIEs) including Taiwan and South Korea were less vocal than the US and Europe because they had become so economically linked with China. They had invested themselves in China, thus an undervalued RMB would maintain operating cost low. Additionally, Japan and the NIEs ran trade surpluses with China and received essentially most of the benefit of value added process trade with China. When choosing an exchange rate regime, countries can operate between two primary exchange rate systems. The first is a fixed exchange rate where the currency is strongly fixed to another value or â€Å"pegged† within a particular band and the rate is adjusted from time to time to stay within the defined or pegged range. The second is a floating exchange rate where the rate is allowed to depreciate or appreciate based on the market. Both of these systems have advantages and disadvantages. A fixed exchange rate regime will offer an economy greater stability in international prices and therefore encourage trade. Additionally, for developing countries a fixed rate will assist in promoting institutional discipline as the country will adopt restrictive monetary and fiscal policies that foster an anti-inflationary environment. A significant weakness of a fixed rate is that it is subject to destabilizing speculative attacks which could lead to financial meltdowns and devastating economic contractions. A floating exchange rate regime allows central banks to combat macroeconomic factors such as unemployment, inflation, and interest rates without having to worry about the effect on exchange rates. However, developing countries whose economies depend on trade will be reluctant to allow their exchange rates to fluctuate freely. In 1994 the Chinese government made the decision to peg the RMB to the US dollar at a rate of US$1 to RMB8.7, a year later the Renminbi appreciated 5% and was revalued to RMB8.28. This rate would remain unchanged for the next 10 years, even though the Chinese faced heavy scrutiny and pressure to revalue their currency. The Chinese exercised many policies in maintaining their exchange rate. The PBoC controlled the amount of foreign currency by forcing all exporters to immediately sell their foreign currency to designated banks. The RMB could only be traded on the China Foreign Exchange Rate Trade System, which was exclusive to the designated banks. Furthermore, China mandated daily foreign reserves to total reserves ratios forcing the member banks to either buy or sell foreign reserves. After absorbing foreign currencies in circulation, the PBoC reinvested these funds in US treasury bonds and stockpiled US debt in order to maintain the peg to the US dollar against natural market forces. Maintaining an undervalued exchange rate also allowed China’s economy to continue to grow. Foreign Direct Investment in China grew from $4.4B a year to $63B a year from 1991 to 2006. For every one dollar earned China would put 8RMB into circulation. This over supply of RMB also maintained the RMB artificially low. However, over time this policy of excess money could lead to inflation. China combatted inflationary pressures by issuing bonds thus removing excess RMBs and by imposing tighter liquidity ratios on banks. On July 2005 China reluctantly reformed their exchange rate regime. The renminbi was revalued by 2.1% to RMB8.11 to the US dollar. The peg to the US dollar was dropped and replaced by a peg to a basket of currencies. However the basket was predominately represented by the USD, the Euro, and the Yen. Despite this reform the US continued to lead international efforts in pressing for greater acceleration of the renminbi’s revaluation as trade deficits with China continued to increase. The Chinese claimed that if a major revaluation took place, such as 15%, it would level their exports causing a contraction in exports. Such dramatic measures would surely have an impact on international trade. For example, the US would see their trade deficit shrink; while Japan and NIEs would see their exports decrease. Therefore I think that China should address their revaluation in a conservative but yet progressive approach. Forcing a major economy to do a one-time 10%, 15%, or 20% revaluation could have damaging and unwanted consequences to a fragile world economy.