Reading Tests & Summary Writings - Academic English UK · 2018. 8. 15. · _____ C -
Transcript of Reading Tests & Summary Writings - Academic English UK · 2018. 8. 15. · _____ C -
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ReadingTests&SummaryWritingsReadingTests
ReadingSummaries
Student/TeacherNotes
Student/Teachernotes
1.Brexit:ThepathtoBrexit
6.Brexit:ThepathtoBrexit
2.TheFinancialCrash:Thecauseofthe2008FinancialCrisis
7.TheFinancialCrash:Thecauseofthe2008FinancialCrisis
3.GigEconomy:TheGigEconomy
6.GigEconomy:TheGigEconomy
4.CSR:CorporateSocialResponsibility
9.CSR:CorporateSocialResponsibility
5.Globalisation:InternationalTrade
10.Globalisation:InternationalTrade
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ReadingTestsContents:1. Brexit:ThepathtoBrexit
2. TheFinancialCrash:Thecauseofthe2008FinancialCrisis
3. GigEconomy:TheGigEconomy
4. CSR:CorporateSocialResponsibility
5. Globalisation:InternationalTrade
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StudentTime:Approximately1hourTwotypesoflessonLesson#1:[Easy]*****[B2/C1]1.Trytopredictthecontentoftext/writedownkeyterms/ideas2.Readtext–checkwordsandmeaningswithadictionary3.Answerquestions4.Checkanswers(passmarkis70%)Lesson#2:[Hard]*****[C1]1.Readtext–nodictionary2.Answerquestions3.Checkanswers(passmarkis70%)
Teacher
TwotypesoflessonLesson#1:[easy]*****[B2/C1]1.Giveouttextaweekbeforethetest–studentsread,checkvocabularyandmeaning.2.Testday–giveoutanewcopyoftextandthequestions(nodictionaryornotes)3.Set1hourtoreadtextandanswerthequestions4.Takeinandcorrectorgothroughanswersinclass(passmarkis70%)5.Extraactivity–studentswritethesummary*(add30minutestotest)Lesson#2:[hard]*****[C1]1.Testday–giveouttextandquestions2.Set1hourtoreadtextandanswerthequestions3.Takeinandcorrectorgothroughanswersinclass(passmarkis70%)5.Extraactivity–studentswritethesummary*(add30minutestotest)SummarywritingLink:www.academic-englishuk/summary
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Brexit:ThepathtoBrexit
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ThePathtoBrexitC.Wilson(2017)
1)TheEuropeanUnionwasformedinthe1950s,specificallyunderthe1957TreatyofRomethatimplementedthesinglemarketforgoods,labour,servicesandcapitalwithcommonpoliciesontransportandagricultureandtoincorporatethecreationoftheEuropeanSocialfundandcommission.IntheseearlystagesitwastermedtheEuropeanEconomicCommission(EEC)andwasderivedofsixmemberstates;Germany,France,Italy,Belgium,theNetherlandsandLuxembourg.TheUKdeclinedaninvitationtojoin.Nevertheless,twenty-twoyearslatertheUKwasgrantedaccessionin1973andforty-threeyearslatertheUKhasvotedtoleave.2)SincejoiningtheEUbackin1973therehasbeensignificantprogressintermsofregulationandpolicy.Thefirstbeing‘theSchengenTreaty’in1985.Thistreatyratifiedaborderlesszoneacrossmemberstatestoincludecommonvisapoliciesandtheabolishmentofpassportcontrols.TheUKrefusedtosignuptothisagreement.Thesecondwas‘theMaastrichtTreaty’in1992.ThischangedthenamefromEECtotheEUandintroducedthesinglecurrencyoftheEurothroughthecreationoftheEuropeanCentralBank(ECB)tocreateasecondreservecurrencyintheworldandsolelycontrolEUmonetarypolicytomaintainstability.ItalsodevelopedabettercoordinationofeconomicpoliciesandtheimplementationofEuropeanCitizenship.ThefinaldevelopmentwastheLisbonTreatyin2007.ThisimprovedpasttreatiesbutalsoextendedpowersofjudicialmattersandEuropeanParliament.3)Atthemomentin2017,theEUconsistsof28stateswhooperatethroughasinglemarketwithstandardisedlawsandEUpoliciesaimedatensuringthefourfreedomsofthefreemovementofgoods,services,capitalandpeoplewithcommonpoliciesontrade,agriculture,fisheriesandregionaldevelopment.TheEUisthesecondlargesteconomyintheworldwithacombinedGDPof$20.75trillion,20%oftheglobalgrossdomesticproductand30%ofthenetglobalwealthof$223trillion.TheEUisthelargestexporterintheworldandsince2008isthelargestimporterofgoodsandservices.Internaltradeisaidedbytheremovaloftariffsandreducedbordercontrol.AccordingtotheOfficeofNationalStatistics(2016),theUKpaysonaverage£18bnayearformembership,thisequatesto£350millionaweek.In2016,theUKreceivedarebateof£5bnandtheEUspent£4.5bnontheUK,thereforetheUK’snetcontributionisabout£8.5bnayear.Thesecostsseemexuberantandthetruebenefitsaredifficulttocalculateagainstinvestment.Ontheonehand,theUKGovernment(2016)claimsthatEUbenefitsprovide4-5%ofUKGDPor£62-78bnayearwiththesinglemarketincreasingflowsofinvestmentandthefreemovementofpeoplebenefitsrecruitmentandknowledgetransferskills.Ontheotherhand,withoutEUmembershipthefutureisunclearbutnotnecessarilynegativeduetothefactthatthiscouldbeanewhorizonopeningbettertrademarketsoutsideacontrolledsinglemarketandinvestingsolelyintheUK.4)TheUKanditsrelationshipwiththeEUhasbeenaturbulentaffair(Young&Gee,2016)fromthestartandtherehavebeennumerouscallsforreferendums.Thesebeganjustaftertheaccessionin1975whenareferendumtoleavewascalledonthedisagreementwiththeEEC’sagriculturalpoliciesandbudgetfinancing,thenagainin1983whenMargretThatcherfamouslynegotiatedarebatefrombeingthenetcontributortotheEUfunds.Followingthatin1992,theUKsuspendeditsmembershipovertheintroductionoftheEuroandtheexchangeratemechanism.In2011,theUKpreventedtheEUGovernmentplanstolevybanksandrestrictLondon’sfinancialsector.In2013,DavidCamerontriedtorenegotiatetheUK’smembershipandhavegreaterpowerofimmigration,exclusionfromEurozonebailoutsandpreventtheEU’scommitmentof‘anevercloserunion’,whichtheUKseesasacreationofasuper-stateEuropecontrolledbyonetypeofpoliticalunion.However,thenegotiationswerenotfullymetandareferendumwasproposed.Finally,in2016,troubleinthe
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Eurozoneandtheongoingmigrantcrisisledtothereferendumbeingcalledforthe23thJune2016.Thecontrollinggovernment‘theconservatives’weredividedwiththePrimeMinister‘DavidCameron’supportingremainandtwoofhisleadingpoliticianssupportingleave.5)OnThursday23rdJuneBritainvotedtoleavetheEUwith51.9%leaveand48.1%remainoverall.However,ScotlandandNorthernIrelandhadamajorityvoteofremainwith62/38and55/44respectively.AccordingtoOfficialGovernmentfigures(2016),34millionpeoplevotedequatingtoa72%turnout,whichwasthehighesteverturnoutinthehistoryofvoting.ThereferendumresultssuggesttheUKissplitdownthemiddleinitsopinionontheEU.Themainargumentsfortheleavecampaignweretoregainsovereignty,tocutimmigration,toremoverestrictionsofthesinglemarkettoaccessglobalmarketsandtospend£350millionaweekontheUKeconomy.Economistshaveanalysedtheresultsandfoundacorrelationbetweenthepeoplewhovotedtoleavebeingaspecificsocialgrade(manual,casualworkers),non-graduatelevelofeducationandtheover60s(pensioners).Also,themainareasthatvotedleavewereplaceswithhighnumbersofimmigrants,highunemploymentanddeprivationfromlackofGovernmentfunding(mainlytheNorthofEngland).LondonontheotherhandvotedoverwhelminglytoremainintheEU(59.9%),whichsomeEconomistssuggestisbecauseofmulticulturalareas,ayoungerpopulationandhighlyeducatedresidents.6)Thereferendumvotewastoleaveso‘BrexitmeansBrexit’.SincethevotetherehasbeenachangeinPrimeMinisterandacompletepro-Brexitcabinetreshuffletoaccommodatethenewchanges.TheGovernmenthastriggered‘Article50’ofthetreatyofLisboninMarch2017.TriggeringArticle50,istheformalnotificationoftheintentiontowithdrawtheUKfromtheEUandtheUKhastwoyearstoleavefromthatdate.Atthesametime,allthetreatiesthatgovernmembershipnolongerapplytoBritain.ThetermsofexitwillbenegotiatedbetweenBritain’s27counterparts.TheGovernmenthastwomainchoicesa‘hard’or‘soft’Brexit.AhardBrexitmeanstogiveupfullaccesstothesinglemarket,gobacktoWTOrulesfortradeandgainfullcontrolofbordersandlaws.AndasoftBrexitmeanskeepasimilarcloserelationshipwiththeEUsimilartoexistingarrangementswithfreeaccesstotheSinglemarket,bankpassportingrightsbutnoseatonEUcommission,andthisdealmustincludethefourfreedoms.Whateverthechoice,itisnowbecomingincreasinglyevidentthattheshort-termimpactislikelytobenegativewithuncertaintiesovertradearrangementsalreadyaffectingthepoundsterling.TheBankofEnglandhasstatedthatBrexitisthebiggestrisktofinancialstabilityinhistory.However,themainpointisthatnooneactuallyknowsexactlywhatwillhappenconcerningtheimplicationsofBrexitoneconomicprosperityandtheUK’sroleontheinternationalstage.References:TheUKGovernment.(2016).EuropeanUnionReferendum2016:BriefingPaperNo:CBP7639.[online]HouseofCommons.Availableat:http://researchbriefings.files.parliament.uk/documents/CBP-7639/CBP-7639.pdf[Accessed10Jan.2017].ONS,(2016).TheUK'sEUmembershipfee.[online]OfficeofNationalStatistics.Availableat:https://fullfact.org/economy/our-eu-membership-fee-55-million/[Accessed10Jan.2017].Young,AandGee,G,(2016).RegainingSovereignty,Brexit,theUKParliamentandtheCommonLaw.EuropeanPublicLaw,22(1),131-147.
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Comprehensionquestions1.Headings–matchasubtitleforeachparagraph1 B Backgroundhistory A DissatisfactionwithEUpolicy2 B Backgroundhistory3 C Thewayforward4 D Threekeytreaties5 E Ananalysisofthereferendum6 F EUEconomics
____/52.True/false/notgiven(T/F/NG)
i. TheUKrefusedtobeamemberinthe1950’sbecauseofthetreatyofRome ii. TheUKrefusedtosigntwotreaties iii. TheUKreceivesnothingforitsnetinvestmentof£8.5bn iv. TheEurozonecrisiswasthemainreasonforthereferendum v. Themainreasonfortheleavevotewasfrompeoplewhofeltdisadvantaged vi. HardBrexitisthebettersolution
____/63.Openquestionsi.Whatarethefourfreedoms?1____________________2)____________________3)____________________4)____________________
___/4ii.Whatarethekeypointsofeachtreaty?(fillinboxbelow)
____/34.EUfigures-(fillinboxbelowfromparagraph3–whatdothenumbersconnectto?)$20.75trillion i)20% ii)30% iii)£18bn iv)£350m v)£62-78bn vi)
____/65.Dates:UKdisagreementswithEU–(fillinboxbelowfromparagraph4–topicsofconflict)1975 i)1983 ii)1992 iii)2011 iv)2013 v)2016 vi)
____/6
‘theSchengenTreaty’ ii)‘theMaastrichtTreaty’ iii)‘theLisbonTreaty’ iv)
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6.Reasons:Keyreasonswhypeoplevotedleave-(fillinboxbelow–4keyreasons)1 2 3 4
____/47.Typesofpeople:Whowerethemainpeoplewhovotedleave?1 2 3
____/38.Definition:WhatisArticle50?
____/29.Keylanguage–explainthesetermsfromthecontext/synonymswhereappropriateAccession Ex.Acquisition/tobeadded
i. Ratified
ii. Judicialmatters
iii. Regionaldevelopment
iv. Tariffs
v. Arebate
vi. Exuberant
vii. Turbulent
viii. Tolevy
ix. Abailout
x. Migrantcrisis
xi. Sovereignty
xii. Deprivation
xiii. Acabinetreshuffle
xiv. Totrigger
xv. Passporting
____/15OverallScore:___/54
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ComprehensionQuestionsANSWERS
1.Headings–matchasubtitleforeachparagraph1 B Backgroundhistory A DissatisfactionwithEUpolicy2 D Threekeytreaties B Backgroundhistory3 F EUEconomics C Thewayforward4 A DissatisfactionwithEUpolicy D Threekeytreaties5 E Ananalysisofthereferendum E Ananalysisofthereferendum6 C Thewayforward F EUEconomics2.True/false/notgiven
i. TheUKrefusedtobeamemberinthe1950’softhetreatyofRome NGii. TheUKrefusedtosigntwotreaties Tiii. TheUKreceivesnothingforitsnetinvestmentof£8.5bn(hardtocalculate) Fiv. TheEurozonecrisiswasthemainreasonforthereferendum(migrantcrisis) Fv. Themainreasonfortheleavevotewasfrompeoplewhofeltdisadvantaged Tvi. HardBrexitisthebettersolution NG
3.Openquestions
i. Whatarethefourfreedoms?goods,labour,servicesandcapitalii. Whatarethekeypointsofeachtreaty?(fillinboxbelow)
the‘SchengenTreaty’ i.1985borderlesszone/nopassportcontrols.UKrefusedtosignthe‘MaastrichtTreaty’ ii.1992.EECtoEU/singlecurrency/ECB/EuropeanCitizenship.The’LisbonTreaty’ iii)2007.judicialmattersandEuropeanParliament.4.EUfigures-(fillinboxbelowfromparagraph3–whatdothenumbersconnectto?)$20.75trillion i)EUGDP20% ii)OfGlobalGDP30% iii)NetGlobalwealth£18bn iv)AyearUKmembership£350m v)UKmembershipaweek£62-78bn vi)UKGovernmentEUmembershipbenefit5.Dates:UKdisagreementswithEU–(fillinboxbelowfromparagraph4–topicsofconflict)1975 i. Agriculturepolicyandbudgetfinancing1983 ii. RebateforbeingNetcontributor1992 iii. Euroandexchangeratemechanism2011 iv. Levybanks&restrictFinancial2013 v. Eurozonebailouts/super-stateEurope2016 vi. TroubleinEurozone/migrantcrisis
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6.Reasons:Keyreasonswhypeoplevotedleave-(fillinboxbelow–4keyreasons)1 Sovereignty2 Immigrationtoohigh3 Singlemarketpreventsglobaltrade4 SpendEUmembershipjustonUK7.Typesofpeople:Whowerethemainpeoplewhovotedleave?1 Manualcasualworkers2 Non-graduateleveleducated3 pensioners8.Definition:WhatisArticle50?PartoftheTreatyofLisbon:formalnotificationtoleavetheEU.Takes2years.9.Keylanguage–explainthesetermsfromthecontext/usesynonymswhereappropriate)Accession Acquisition/tobeadded
i. Ratified Makingitofficiallyvalid
ii. Judicialmatters Appropriatetoalawofcourt
iii. Regionaldevelopment Aidandhelptopoorerareasinacountry
iv. Tariffs Ataxordutytobepaidonexportsorimports
v. Arebate Arefundofmoney
vi. Exuberant Veryhigh
vii. Turbulent Conflictnotcalm
viii. Tolevy Imposeataxorfine
ix. Abailout Givefinancialassistance
x. Migrantcrisis Toomanymigrants
xi. Deprivation Lackofbasicamenities
xii. Acabinetreshuffle Tochangepolitician’sjobrolesinagovernment
xiii. Passporting Therighttofinanciallytradefreelyinothercountrieswithhavingaheadquarters/acompanyinthatcountry
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TheCausesoftheFinancialCrisis2008
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TheCausesofthe2008FinancialCrisisC.Wilson[2017]
1)In2008theworldexperiencedtheworstfinancialcrisissincetheGreatDepression(1930s).Theseveremagnitudeofthefinancialdisasterbecamefullyevidenttowardstheendof2007.Ithad,however,begunyearsearlierthroughwhatmanyclaimedtobethemainfactorinthecrash;sub-primemortgagelending.Thefinancialcrisisof2007-08andtheaftershocksoftheUSsubprimemortgagecrisisof2007-09isnowconsideredtobe'TheGreatRecession'.TheUSFinancialCrisisInquiryCommission[FCIC](2011)reportedthecrisiswasavoidableandwascausedfromwidespreadfailuresinregulationoffinancialinstitutionsandtherecklessactionsinriskandborrowing.Itconcludedthatkeygovernmentalpolicymakerswereill-preparedandlackedunderstandingandaccountabilityinthefinancialsystemstheyoversaw.ThisarticlewillexaminehowsubprimemortgagelendingledtotheGreatRecession. 2)Towardstheendofthe1990spropertypurchasesbegantorise.Withsuchgrowth,lendingmoneyforhousebuyingbecameaprofitablebusinessinbothmortgagesandremortgaging.Traditionally,thehousebuyersavesupadeposit(downpayment–usuallybetween10%ofthehousecost)andcontactsabankormortgagebroker,whoconnectsthemtoalender,whointurnprovidesamortgagebasedonthegroundsofspecificcriteria(permanentemployment,nopreviousfinancialdefaults(apositivecredit-score),andtherepaymentplanbeingachievable).Thisischaracterizedasa‘Prime-mortgage’andthelevelofriskinlendingisextremelylow.3)Throughout2000ashomeownershipbecamemorepopularandhousepricesrosesignificantly(1997–2006housepricesroseby124%intheUSand186%intheUK(USSpindices,2016)),lendersbegantosecuritisethesemortgagesintomortgage-backedsecurities(MBS)andCollateralizedDebtObligations(CDOs)andthensoldthemtotheinvestmentbankingsector.Thesemortgageswereratedbycreditagenciesintothreeareas,‘safe’,‘ok’and‘risky’,andthensoldontotheShadowBankingSectororinvestors,non-depositorybankers,andhedgefundsrespectively.However,theprimemortgagemarketbegantobecomesaturatedduetothosewhoqualifiedhadone.4)Therefore,sub-primemortgagelendingwasintroducedin2002/3basedonthepresumptionthatashousepricescontinuedtorise,ifaborrowerdefaultedonpayment,thelenderwouldreprocessthehouseasequity.Lendersbegantoaddrisktothesenewmortgagesinthatnodeposit,noproofofincome,ornodocumentswererequiredtoobtainamortgage.Anestimated$3.2trillionloanswereissuedtohomeownerswithbadcreditandundocumentedincomesbetween2002-2007(FCIC,2011),andwithsucharisederegulationofbankingpolicyoccurredtoincludefraudulentautomatedunderwritingprocessesandcreditagencies'standardsfalling.Atthesametime'predatorylending'offeredloansatlowinterestratesorAdjustableRateMortgage(ARM)rates,wheretheconsumerwasunawareofthecontractandassociatedrates(Krugman,2009).Thesub-primemortgageprocessactivelyencouragedariseinhousepricesandaphenomenonknownasthe'housingbubble',wherehousepricesrosemuchfasterthanwagesmakinghousingunaffordableorpeopleborrowingmorethantheycanrepay.5)TheshadowbankingsectorofInvestmentbankers,hedgefundsandinsurancefirmsallboughtintothehighlyprofitableworldofsub-primemortgagebackedsecurities.Thesehighlyprofitablecreditinstruments(CDOs),weretradedinternationallythroughderivativesandforeignexchangetradingandspreadacrosstheglobalfinancialcommunity.By2006,80%ofU.Smortgagesweresubprimeloanswithanestimatedvalueof$1.4trillion(FCIC,2011)Shadowbankingoftenreferredtoasparallelbanking,werenotsubjectedtothesamebankingregulatorycontrols.Theseinstitutionswerevulnerableastheyborrowedshort-terminliquidmarketstopurchaselongterm,
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illiquidandriskyassets.Thismeantdisruptionsincreditmarketscreatingrapiddeleveraging,sellinglongtermassetsatdepressedprices.6)Interestratesbegantorisein2007,andthiswasthebeginningoftheend.ThedefaultratesbegantoincreasewithmanyborrowersunabletomeetthemonthlypaymentsandthisinturnmeantthatMBSandCDOsbegantolosevaluewithhigherdefaultrates.Concurrently,thehousingbubbleburstandhousepricesfell40%(FCIC,2011),leavingmanypeopleinnegativeequity.However,themostseriouseffectwasacrisisofliquidityandtrustthatoccurredacrossbanks.LehmanBrotherswentbankruptandmanymore(MerrillLynch,AIG,FreddieMac,FannieMae,HBOS,RoyalBankofScotland,Bradford&Bingley,Fortis,HypoandAlliance&Leicester)wereonthevergeofbankruptcyandneededtobebailedoutbyGovernments.Infact,21Banksand61hedgefundshadbeenforcedtodeclarebankruptcyintheUSalone(Morris&Song,2008).Theremainingbanksroseinterestratesandstoppedlendingmoneywhichbecameknownasthe'CreditCrunch'andtheledtheworldinto‘TheGreatRecession’.7)Since2008,anumberofmeasureshavebeencreatedinresponsetorectifytheproblems.Theseincludefinancialrescueplans,centralbank’smonetarypoliciesofloweringinterestrates,andGovernmentalpublicstimuluspackages.Therearecallsforimprovedmarketregulationandsupervision,whichhavebeenmetthroughtheDoddFrankAct(Krugman,2009).ThiswasthelargestreformoftheU.SbankingsectorsinceWW2.Inaddition,anewglobalfinancialsystemregulatedbytheIMF,whoshouldhaveabroaderroleintheregulatorysystemoftheworldeconomy,isbeingimplemented.8)Overall,thefinancialcrisisof2008wasnotjustthesub-primemortgagelendingsector.Thereareanumberofothercontributingfactorsthatthisarticlehasnotdiscussed,butprimarilyfraudulentgreedybankingpracticeseemstolieattheheartofit.Toidentifywhoisexactlytoblameisincrediblydifficultbecausetheresultsoftoxicassetsfromfraudulentunderwritingprocesses,easycreditconditions,predatorylending,deregulationandover-leveragingallhadasignificanteffectoncreatingoneofthebiggestcrashesofalltime.Itseemsthateveryonewasresponsible,fromgovernment’sinabilitytoregulateinnovativebankingpractice,Economistsunabletoforecasteconomiccollapse,financialinstitutionsexploitingthecomplexityofMBSandCDOsandevenhomeownerstakingonloanstheywereunabletopayback.Thequestionsthatexist,however,arewhetheritwillhappenagainandarethemeasuresinplacesufficienttocontrolandregulatebankingpractice.
[1003words]ReferenceListKrugman,P.2009).TheReturnofDepressionEconomicsandtheCrisisof2008.W.W.NortonCompanyLimited.Morris,S.andSongH,S.(2009).FinancialRegulationinaSystemContext.BrookingsPapersonEconomicActivity,2008(2),pp.229-274.Availableat:http://www.princeton.edu/~smorris/pdfs/Morris-FinancialRegulationinaSystemContext.pdf[Accessed24Dec.2016].Thefinancialcrisisinquiryreport[FCIR]:finalreportoftheNationalCommissionontheCausesoftheFinancialandEconomicCrisisintheUnitedStates.(2011).ChoiceReviewsOnline,[online]48(12),pp.48-7034.Availableat:http://fcic-static.law.stanford.edu/cdn_media/fcic-reports/fcic_final_report_full.pdf.[Accessed24Dec.2016].Us.spindices.com.(2016).S&PCoreLogicCase-ShillerU.S.NationalHomePriceNSAIndex-S&PDowJonesIndices.[online]Availableat:https://us.spindices.com/indices/real-estate/sp-corelogic-case-shiller-us-national-home-price-nsa-index[Accessed24Dec.2016].
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ComprehensionQuestions
1.Headings–chooseasubtitleforeachparagraph1 B Backgroundhistory A ProfitableTrading
2 B Backgroundhistory
3 C Sub-primemortgage
4 D Conclusion
5 E APrimemortgage
6 F Anewregulatorysystem
7 G Mortgagesecuritisation
8 D Conclusion H Thecollapse
___/6
2.True/False/NotGiven–onequestionperparagraphT/F/NGvii. Thefinancialcrisisbeganin2007 viii. Prime-mortgagesarehigh-risk ix. In2000,mortgageswerepackagedandmadeintomarketableproducts x. CreditAgencieswereunqualifiedinunderwritingprocesses xi. ShadowBankingsectoristhemainreasonforthefinancialcrisis xii. Thegovernmenthadtotakeoverbankstosavethemfrombankruptcy xiii. Therescuepackageshaveworkedinregulatingthebankingsector xiv. Thesubprimemortgagesectorwasthemainreasonforthefinancialcrisis
___/83.Data-fillinboxbelow–whatdothenumbersconnectto?10% i)186% ii)3.2 iii)80% iv)1.4 v)40% vi)
___/6
4.Acronyms:writethewordsfortheseacronymsFCIC MBS CDO ARM
___/4
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Paragraph15.WhatwerethemaincausesofthecrisisaccordingtotheFCIC?(2keyreasons)1 2
___/2Paragraph26.Threekeycriteriaforatraditionalmortgage.1 2 3
___/3Paragraph3/47.Whydidthesub-primemortgagesectorlendingrise?1 2
___/2Paragraph48.Whatis‘predatory’lending?
___/1Paragraph59.Howisshadowbankingdifferentfromtraditionalbanking?
___/1Paragraph610.Whatwasthemostseriouseffectofthefinancialcrisistothebanks?
___/1Paragraph711.Whatarethetwomeasuresbeingputinplaceafter2008?1 2
___/2Conclusion12.Whatwerethekeyproblemsassociatedwithtoxicassets?i ii. iii. iv. v.
___/5
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Conclusion13.Theoverallkeyproblemswiththesegroupswere:Governments
i.inabilitytoregulateinnovativebankingpractice
Economists
ii.
Financialinstitutions
iii.
Homeowners iv.
___/3
14.Keylanguage–explainthesetermsfromthecontext/usesynonyms(whereappropriate)magnitude Agreatsize/immense/vast
xiv. Defaults
xv. Saturated
xvi. Parallel
xvii. Fraudulent
xviii. ‘housingbubble’
xix. Negativeequity
xx. Bailout
xxi. The‘creditcrunch’.
xxii. Torectify
xxiii. stimuluspackages
xxiv. toxicassets
___/11
OverallScore:____/55
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ComprehensionQuestionsANSWERS1.Headings–writeasubtitleforeachparagraph1 B Backgroundhistory2 E APrimemortgage3 G Mortgagesecuritization4 C Sub-primemortgage5 A ProfitableTrading6 H Thecollapse7 F Anewregulatorysystem8 D Conclusion
___/6
2.True/false/notgiven–onequestionperparagraphi. Thefinancialcrisisbeganin2007[P1:begunyearsearlier] Fii. Prime-mortgagesarehigh-risk[P2:lowrisk] Fiii. In2000,mortgageswerepackagedandmadeintomarketableproducts Tiv. CreditAgencieswereunqualifiedinunderwritingprocesses NGv. ShadowBankingsectoristhemainreasonforthefinancialcrisis NGvi. Thegovernmenthadtotakeoverbankstosavethemfrombankruptcy Tvii. Therescuepackageshaveworkedinregulatingthebankingsector NGviii. Thesubprimemortgagesectorwasthemainreasonforthefinancialcrisis
[P8:Thereareanumberofothercontributingfactors]F
___/83.Data-(fillinboxbelow–whatdothenumbersconnectto?)
10% i)deposit186% ii)UKhousepriceriseinUK1997-20063.2 iii)$3.2trillionbadcreditloansissued(2002–2007)80% iv)thetotalofUSsubprimeloans1.4 v)$1.4trillionvalueonsub-primemortgages40% vi)housepricefellin2007
___/6
4.Acronyms:writethewordsfortheseFCIC i)FinancialCrisisInquiryCommissionMBS ii)Mortgage-BackedSecuritiesCDOs iii)CollateralizedDebtObligationsARM iv)AdjustableRateMortgage
___/4
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5.WhatwerethemaincausesofthecrisisaccordingtotheFCIC?(2keyreasons)1 widespreadfailuresinregulationoffinancialinstitutions2 recklessactionsinriskandborrowing
___/2
6.Threekeycriteriaforatraditionalmortgage.1 Permanentemployment2 Apositivecredit-score3 Achievablerepaymentplan
___/3
7.Whydidthesub-primemortgagesectorlendingrise1 Saturatedduetothosewhoqualifiedforamortgagehadone.2 Housepricerisemeanthouseasequity
___/2
8.Whatis‘predatory’lending?lending'offeredloansatlowinterestratesorAdjustableRateMortgage(ARM)rates,wheretheconsumerwasunawareofthecontractandassociatedrates.[keyterms]
___/1
9.Howisshadowbankingdifferentfromtraditionalbanking?Notbankingregulatorycontrols,theseinstitutionswerevulnerableastheyborrowedshort-terminliquidmarketstopurchaselongterm,illiquidandriskyassets[keyterms]
___/1
10.Whatwasthemostseriouseffectofthefinancialcrisistothebanks?Thecrisisofliquidityandtrustthatoccurredacrossbanks.
___/1
11.Whatarethetwomeasuresbeingputinplaceafter2008?1 theDoddFrankAct2 anewglobalfinancialsystemregulatedbytheIMF
___/1
12.Conclusion:Whatwerethekeyproblemsassociatedwithtoxicassets?i fraudulentunderwritingprocessesii. easycreditconditionsiii. predatorylendingiv. deregulationv. over-leveraging___/5
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14.Theoverallkeyproblemswiththesegroupswere:
Governments
i.government’sinabilitytoregulateinnovativebankingpractice,
Economists
ii.unabletoforecasteconomiccollapse
Financialinstitutions
iii.exploitingthecomplexityofMBSandCDOs/homeownerstakingonloanstheywereunabletopayback
Homeowners iV.takingonloanstheywereunabletopayback
___/3
15.Keylanguage–explainthesetermsfromthecontext/usesynonymswhereappropriate)i. magnitude Agreatsize/immense/vast
ii. Defaults Anonpaymentofmoneyowed
iii. Saturated Supplybeyonddemand
iv. Parallel Occurringorexistingatthesametime
v. Fraudulent Dishonest.Corrupt,deceitful
vi. ‘housingbubble’ wherehousepricerisemuchfasterthanwagesmaking
housingunaffordablevii. Negativeequity Propertyvaluefallsbelowthemortgagevalue
viii. Bailout Togivefinancialassistance
ix. The‘creditcrunch’. Banksstoplendingmoney
x. Torectify Putrightorcorrect
xi. stimuluspackages Apackageofeconomicmeasurestostimulateafloundering
economyxii. toxicassets Abadfinancialassetwhosevaluehasfallenandnolongera
functioningmarket___/11
OverallScore:_____/55
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TheGigEconomy
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TheGigEconomyC.Wilson(2017)
1)Theworkingworldischanging.Inourincreasingflexiblelabourmarket,thenotionofa‘jobforlife’andtheconceptof9-5workdayisdiminishing.Initsplaceisthegigeconomy,whicharecollaborativeworkingplatformswherepeopleworkontemporarycontracts(gigs),oftenasfreelancersandself-employed.RecentresearchfromOxfordUniversity(2016)suggeststhatthislabourmarkethasgrown25%,withpredictedgrowthofupto40%by2020,andisoccupiedby30%oftheUK’spopulationworkingonshort-termtemporaryprojects.Thissignificantgrowthisattributedtodigitalization,increasedfinancialpressuresandtheincreasedfrequencyofpeoplechangingjobs(TheRecruitment&EmploymentConfederation(REC),2016).2)DefiningtheGigEconomyisincrediblydifficultbecauseofhowdiversethelabourmarketis.WorldleadingresearchfromtheMckinseyReport(2016)definesitas‘independentworkthatencapsulatesautonomy,paymentforthetaskorassignmentorsalesandashort-termrelationshipbetweentheworker’.Thisincludespeoplewhoprovidelabourservicesaswellasthosewhotradeingoodsorrentassets.TheMcKinseyReportalsodefinesworkersintofourbands:FreeAgents,CasualEarners,ReluctantsandFinanciallyStrapped.VaughanandDaverio(2016)separatethegigeconomyintofivekeysectors:peertopeeraccommodation,peer-to-peertransportation,ondemandhouseholdservices,ondemandprofessionalservicesandcollaborativefinance.Overall,theseeconomiesareindependenttemporaryshort-termpositionsthatincludeaformofcollaborativeconsumptionandareoftenoperatedthroughadigitalplatform.Thisarticlewillusethe‘gigeconomy’asanumbrellatermtoincludealloftheabove.3)Thereare275collaborativeeconomyplatformsintheEUcreatinganestimated€25bnannually(VaughanandDaverio,2016).Keyleadersinpeer-to-peeraccommodationarecompanieslikeAirbnb.Thisplatformallowsindividualstorentoutaspareroomoranentirehousetotravellers.Themaindriveristhecreationofextraincomeforthesupplierbutalsocreatinganauthenticexperienceandcheaperaccommodationforthetraveller.Peer-to-peertransportationisUberwhoprovide‘ataxistyle’servicethroughtheirUberapp.ClientssubmitatriprequestandtheapplinksthemtothenearestUber‘gig’driver.Apopularon-demandhouseholdserviceisthecompanyDeliveroo,whoareanonlinefooddeliveryservicecompanythroughwhichcustomersorderfoodfromlocalrestaurantsadvertisedontheDeliverooplatform.Thefoodisthencollectedanddeliveredbygigemployeeswithin30minutes.Ondemandprofessionalservicesarecompanieslikepeopleperhour.comorfreelancer.com.Theseplatformsadvertiseandorganizetopprofessionals.Workersshowcasetheirportfolios,recentworkandtrustedreviewssothatemployerscanchooseappropriately.Finally,collaborativefinanceiscommonlytermedas‘crowd-funding’theseofferindividualsandbusinessesopportunitiestoinvest,lendandborrowdirectlybetweeneachother.ThegigeconomyisquicklybecomingavitalcomponentoftheUKlabourmarketforarangeofsectorsandindustries(REC,2016).4)Thetransformativeimpactofthegigeconomyishavingveritableeconomicbenefitsbyraisinglabourforceparticipation,stimulatingconsumption,andboostingproductivity
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(McKinseyReport2016).Itismeetingthegrowingdemandforservicesfromconsumersandorganisationsandhasthepotentialforconsiderablegrowthanddevelopmentoverthenext20years(REC,2016).Researchseemstosuggestthatthegigeconomyoffersabetterwork-lifebalancethroughautonomyandflexibility.Inaddition,businessesarebenefittingfromhavingaccesstoaglobaltalentpool,reductioninoperationalcostsandloweringtherisksoflong-termemploymentcontracts.5)Sucharapidgrowthofthegigeconomyisposingprofoundchallengesforpolicymakersandregulators.Therearealreadysignificantdifferencesinregulatoryframeworksintaxpolicies,applicationsandenforcementacrossEurope(VaughanandDaverio,2016:3).REC(2016)claimsthatworkersarenotprotectedbycommonworkers’rightslaws,donotqualifyforsick,holidayorpensionentitlements,andtheycanbeforcedtoworkatlowerrateswithnojobsecurityorcontinuity.Withregardstoemployers,REC(2016)statesthatgigworkersmaynotbeloyaltothecompany’sbrand,thereisalsothepossibilitythatcrowdsourcingprofilesaredeceptiveorexaggerated,andwithlittleregulatorycontrolofgigemployees,companiesmaybecomeembroiledinlegaldisputesoverworker’srights.Overall,itseemsthatthegigeconomyhasanumberofchallengestobeaddressed.6)Thecommodisationofthelabourmarkethascreatedshortfixedworkingcontracts,andlimitedjobsecurity,andlifetimeemploymentwithonecompanyisnowarelicofthepast.Digitaltechnologiesarechangingworkpatternsandofferinggreateropportunities.Itseemsnosurprisethatparticipationinthecollaborativeeconomyishighestamongthewell-educatedunder35agerange(VaughanandDaverio,2016),thussuggestingthisisgoingtobethefutureofemployment.Thebiggestchallengeforthegigeconomyisregulationandcontrol.Researchiskeyinenablingpolicy-makerstomodernizeclassificationsofworkpatterns,taxfilingandcompliancerequireimprovements.Itisimperativethatthisresearchimprovesregulationofferingprotectionforlow-skilled,low-paidgigworkerswithbetterworkingrights,acknowledgingdisabilityanddiscriminationlawsandalsocontrollingminimumwages.Overall,‘regulatingthegigeconomyisaboutallowinginnovationtoflourishbutmakingsuretheadvantagesarewell-distributed’(REC,2016:56).
[Words:860]ReferencesTheMckinseyReport(2016)IndependentWork:choice,necessityandthegigeconomy(October2016).MckinseyGlobalInstitutePublications.TheRecruitment&EmploymentConfederation(2016)GigEconomy:TheUberisationofWork.InstituteofRecruitmentProfessionalspublishing.TheUniversityofOxford(2016)RiseofOnlineWorkCapturedintheFirstOnlineLabourIndex.Availableat:http://www.ox.ac.uk/news/2016-09-21-rise-online-work-captured-first-online-labour-index[Accessed03February2016)Vaughan,R.&Daverio,R.(2016)AssessingtheSizeandPresenceoftheCollaborativeEconomyinEurope.PWC-EuropeanCommissionPaper(DGGROW).
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ComprehensionQuestions
1.Headings–chooseasubtitleforeachparagraph1 B Theriseofthegigeconomy A Principalgigcompanies
2 B Theriseofthegigeconomy
3 C Theimportanceofthegigeconomy
4 D Acomplexdefinition
5 E Futurechallenges
6 F Thelimitationsofthegigeconomy
___/5
2.True/False/NotGiven–onequestionperparagraphT/F/NGxv. PeoplewhoworkfortheGigEconomyareself-employed. xvi. Definingisdifficultbecauseofthedifferenttypesofworkers. xvii. OndemandserviceslikePeopleperhourandfreelancerarethemostpopular. xviii. Themajorityofgigworkersaresatisfiedwiththeflexibility. xix. Somecrowd-sourcingprofilesarelying. xx. Moreresearchisnecessarytoofferbetterprotection.
___/6OpenanswerquestionsParagraph13.WhatisOxfordUniversityforecasting?1
___/1
Paragraph14.Whatarethemainreasonsfortheincreaseofthegigeconomy?1 2 3
___/3
Paragraph25.Whatarethemaindifferencesbetweenthetwodefinitions.1
2
___/2
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Paragraph36.Whatarethefivekeycompaniesgivenasexamples?1 2 3 4 5
___/5
Paragraph47.Whatarethekeybenefits?Economic 1.Labourforceparticipation
2.3.
Individuals 1. 2. 3. Business 1.Globaltalentpool 2. 3.
___/7
Paragraph58.Whatarethekeyproblems?Policymakers Differencesinregulatoryframeworkssuchas…
1.Taxpolicies2.3.
Workers 1.Notprotectedbyworkers’rights
2.3.4.5.
Employers 1.
2.3.
___/9
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Paragraph69.WhatisthemainevidencethattheGigeconomyisheretostay?
___/1
Paragraph610.Whatarethemostimportantissuestobeaddressed?
___/2
Paragraph611.Whatfouraspectsshouldregulationfocuson?1 2 3 4
___/4
12.Author’sstance?IstheauthorfororagainsttheGigeconomy?Why?For Against[chooseone]Why?
___/2
13.Referencewords–explainwhatthesereferencewordsconnectto:(underlinedinthetext)
Paragraph Word Connection
1 This 25%growth
2 those
3 these
4 It
5 they
6 this
___/5
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14.Keylanguage–explainthesetermsfromthecontext/usesynonymswhereappropriate)Paragraph Word Explanation
1 notion
Abelief/conception
2 encapsulates
2 financiallystrapped
2 anumbrellaterm
3 authenticexperience
3 Toshowcase
4 veritable
4 stimulating
4 autonomy
5 deceptive
5 embroiled
6 ‘arelicofthepast’
6 toflourish
___/12
OverallTotal:____/64
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ComprehensionQuestionsANSWERS
1.Headings–chooseasubtitleforeachparagraph1 B Theriseofthegigeconomy A Principalgigcompanies
2 D Acomplexdefinition B Theriseofthegigeconomy
3 A Principalgigcompanies C Theimportanceofthegigeconomy
4 C Theimportanceofthegigeconomy D Acomplexdefinition
5 F Thelimitationsofthegigeconomy E Futurechallenges
6 E Futurechallenges F Thelimitationsofthegigeconomy
___/6
2.True/False/NotGiven–onequestionperparagraphT/F/NGi. PeoplewhoworkfortheGigEconomyareself-employed. Tii. Definingisdifficultbecauseofthedifferenttypesofworkers.[markets] Fiii. OndemandserviceslikePeopleperhourandfreelancerarethemostpopular. NGiv. Themajorityofgigworkersaresatisfiedwiththeflexibility[nonumbergiven] NGv. Somecrowd-sourcingprofilesarelying.[deceptive] Tvi. Moreresearchisnecessarytoofferbetterprotection. T
___/6OpenanswerquestionsParagraph13.WhatisOxfordUniversityforecasting?1 40%growth
___/1
Paragraph14.Whatarethemainreasonsfortheincreaseofthegigeconomy?1 Digitalization2 Financialpressures3 Increasedfrequencypeoplearechangingjobs
___/3
Paragraph25.Whatarethemaindifferencesbetweenthetwodefinitions.1 McKinseyfocusesonindividualworker,paysystemsandtypesofworkers
2 V&Dfocusonthefivekeysectors
___/2
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Paragraph36.Whatarethefivekeycompaniesgivenasexamples?1 Airbnb2 Uber3 Deliveroo4 Peopleperhour.com/freelancer.com5 NOcompany–justtheterm‘crowdfunding’
___/5
Paragraph47.Whatarethekeybenefits?Economic 1.Labourforceparticipation
2.Stimulatingconsumption3.Boastingproductivity
Individuals 1.Satisfied/work-lifebalance 2.Autonomy 3.Flexibility Business 1.Globaltalentpool 2.Reducedoperationalcosts 3.lowerlong-termcontracts
___/6
Paragraph58.Whatarethekeyproblems?Policymakers Differencesinregulatoryframeworkssuchas…
1.Taxpolicies2.Applications3.Enforcement
Workers 1.Notprotectedbyworkers’rights
2.NoentitlementsSick,holiday,Pension3.forcedtoworkatlowerrates4.Nojobsecurity5.Nocontinuity
Employers 1.Notloyaltobrand
2.Crowd-sourcingprofilemaybeinaccurate[deceptive/exaggerated]3.Legaldisputesoverworkers’rights
___/9
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Paragraph69.WhatisthemainevidencethattheGigeconomyisheretostay?Employmentishighestamongtheunder35well-educatedagerange(VaughanandDaverio,2016),thussuggestingthisisgoingtobethefutureofemployment.
___/2
Paragraph610.Whatarethemostimportantissuestobeaddressed?Thebiggestchallengeforthegigeconomyisregulationandcontrol.[mustincludetwopoints]
___/2
Paragraph611.Whatfouraspectsshouldregulationfocuson?1 Protectionforlow-skilled,low-paidgigworkers2 Betterworkingrights3 Disabilityanddiscriminationlaws4 Minimumwageisbeingearnt
___/4
12.Author’sstance?IstheauthorfororagainsttheGigeconomy?Why?For NoWhy?1.Seestheeconomyasthefutureofthelabourmarket2.Butbelievesmoreregulation&researchisnecessarytomakeitfairer.
___/2
13.Referencewords–explainwhatthesereferencewordsconnectto:(underlinedinthetext)
Paragraph Word Connection
1 This 25%growth
2 those Gigworkers
3 these platforms
4 It Thegigeconomy
5 they Gigworkers
6 this Thecollaborativeeconomy
___/5
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14.Keylanguage–explainthesetermsfromthecontext/usesynonymswhereappropriate)Paragraph word Explanation
1 notion
Abelief/conception
2 encapsulates Theessentialfeaturesofsomething
2 financiallystrapped Inneedofmoney
2 anumbrellaterm Abroadtermthatincludesmostideas
3 authenticexperience Real/naturaltoreallife
3 Toshowcase Exhibit/display
4 veritable Real/interesting/exciting
4 stimulating Encouraging/arousinginterest
4 autonomy Self-controlling
5 deceptive Misleading/inaccurate/nottrue
5 embroiled Involvedinargument/conflict/difficultsituation
6 ‘arelicofthepast’ Somethingfromthepastbuthasbeenoutmodelledorimproved
6 toflourish Togrow/develop/prosper
___/11
OverallTotal:____/64
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CSR:CorporateSocialResponsibility
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CorporateSocialResponsibilityC.Wilson(2017)
1)CorporateSocialResponsibility(CSR)hasundergoneprofoundtransformationfromanideologyofuncertaintyintoanindispensablecomponentofbusinesspractice.Hamiduetal,(2015)acknowledgethatithasbecomeamandatorytoolinstrategizing,complyingwithregulationsandmaintainingstandards,buildingcorporatereputationandobtainingcustomerloyaltywhich‘allculminatesinincreasingprofitabilityandoverallattainmentoforganisationalobjectives’(p.83).Infact,over9,270companiesfrom166countriesaresignatoriestothevoluntaryUNGlobalCompactwhichfulfilsacompanies’obligationtoestablishissuesonhumanrights,labourstandards,theenvironmentandanti-corruptioninitiatives(Wang,2016).Overall,CSRisanintegratedstrategicapproachinresponsibilitytoachievesharedvalueforthestakeholderandsocietalobligations.2)CSR’sprogression,sinceitsintroductionin1950’s,hasbeenquiteremarkable.Inthebeginningitwascharacterizedas‘philanthropic’inseekingtopromotethewelfareofothers.Thisfocusedonmainlyreligiousandhumanephilosophies,communitydevelopmentandpovertyalleviation(Carrol,2008).Inthe1970’s,CSRbecameasymbolofcommitment.Itbecamemore‘regulated’focusingonchangingperspectivesinstakeholdertomanagerrelationships,encouragingaconsciousawarenessofcorporatereputationandplacingemphasisonlegalandethicalissues(ibid).The1990’sinstigatedwhatisnowcommonlyseenas‘instrumental/strategic’CSR.Aprominenceonenvironmentalprotection,sustainabilityandtransparencywithaclearguideoninternationalizationofCSRstandards(ibid).Insum,Matten&Moon(2002)summarisethisasaclusterconceptofbusinessethics,corporatephilanthropy,corporatecitizenship,sustainabilityandenvironmentalresponsibility,allembeddedinsocial,political,economicandinstitutionalcontexts.3)ResearchbyWeber(2008)highlightsthattheimplementationofCSRhasbecomeapre-eminentfeatureinbuildingandmaintainingcorporatereputation,whichhasbecomeregardedasanessentialstrategicresourcefactoringintoacompany’scompetitiveadvantage.Park,Lee,&Kim,(2014)claimthatthekeybenefitsbehindbeingsociallyresponsibleinclude:improvedfinancialperformance,contributiontomarketvalue,amoregeneralpositiveimpactonsocietalstakeholders,aconsciousconnectionwithconsumers,andimprovedproductquality.Theauthorsalsonotethatinternalreasonssuchasincreasedemployeecommitmentandreducedemployeeturnoverareimportantbenefits.Inaddition,Carrol(2008)assertsthatCSRactivitiesgenerateresiliencetonegativecompanyinformationandconsumers’awareness,andthiscultivatesappreciationtotheattitudesandattributionsaboutwhycompaniesareengaginginCSRinitiatives.4)TheeffectivenessofCSReffortsisoftendifficulttoobserve.Companiesoftenfailthroughshort-runCSRinvestmentpolicies.Theymaylackcommitmentandsupportatseniormanagementlevel,andfailtotakeintoconsiderationtheissuesthataresalienttostakeholdergroupsinvariousmarkets.Long-terminvestmentisthekeybutalackoftransparencyandgoalclarityoftenmakeitdifficulttounderstandandmanagetherisksandboundariesofcorporatesocialactivities(Wang,2016).HowmanagersprioritizeandbalanceaspectsofCSRisoftenachallengefacingmanycorporations.Moreover,the
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complexityinorganizingandmanagingCSRisexacerbatedformultinationalcorporationswithgloballogisticchainsandoff-shoremanufacturingindustries.ThevaluesofCSRinonecountryarenotnecessarilyinaccordancetoanothercountry’sgovernmentalandenvironmentalpolicies(Hamiduetal,2015).Afinalchallengeistheconceptof‘shopdressing’or‘greenwashing’.ThisiscompanieswhoarepromotingtheperceptionofapplyingCSRprinciplesthroughmarketingandadvertising,butinrealityarenotimplementingthebusinesspracticeandtherebymisleadingconsumers.Anexampleofitwouldbeacompanypromotingrecycledpackagingbutitsfactoriesarepollutinglocalwatercourses.5)Overthepastsixtyyears,theissueforcompanieshasbecomehowtoconductCSRinastrategicallyandeffectivelyplannedmannerthatmeetsstakeholder’sexpectations,maximisesprofitandoffersaclearanddemonstrablenarrativeofitsimpactonthecompanyandforthecommunity(Wangetal.2016).CSRisaconstantlyevolvingintegratedanddisciplinedfieldofbusinessactivity,whichhasmovedonfromthelatestmanagementfadintoasignificantprofessionalbodyofpolicyandpractice.AlthoughCSRisformedonvoluntarybasis,thereareanumberofkeyareasthatneedtobeaddressed.Therecognitionofdiversityisanecessityforauniversalapproach.Thisincludesbettercollaborativeandsupportivemechanismsfromsourcetosupplychaintoselleradvancingthesustainabilityagenda(Gov.uk,2014).Inaddition,GovernmentscouldplayagreaterrolebychangingexistinglegislationtotheCompaniesActandSocialServicesActthroughtheinclusionofenforcingethicalstandards,theadoptionofeffectiveandtransparentsupplychainmanagementpracticeandlegalactionagainstgreenwashing/misleadingmarketingcampaigns.Overall,sustainability,transparencyandethicalstandardsarekeydriversinresponsiblebusinesspracticeandthevaluesofthesociety. References Carroll,A.B.(2008)AHistoryofCorporateSocialResponsibility:conceptsandpractices,inCrane,A.etal(eds),TheOxfordHandbookofCorporateSocialResponsibility,OxfordUniversityPress,pp.19-46Gov.uk.(2014).CorporateResponsibility:Goodforbusiness&society.DepartmentforBusinessInnovation&Skills.Availableat:https://www.gov.uk/government/uploads[Accessed17February2017]Hamidu,A.Haron,H.&Amran,A.(2015).CSR:AReviewofDefinitions,CoreCharacteristicsandTheoreticalPerspectives.JournalofSocialSciences.6(4)83-95Matten,D.,&Moon,J.(2004)ImplicitandExplicitCSR:AconceptualframeworkforunderstandingCSRinEurope.ICCSRResearchPaperSeries(29-2004),UniversityofNottinghamPark,J.,Lee,H.,&Kim,C.(2014).Corporatesocialresponsibilities,consumertrustandcorporatereputation:SouthKoreanconsumers’perspectives.JournalofBusinessResearch,67,295-302.Wangetal.,(2016).CorporateSocialResponsibility:anoverviewandnewresearchdirections.AcademyofManagementJournal.59,(2)534–544.Weber,M.(2008).TheBusinessCaseforCorporateSocialResponsibility:acompanylevelmeasurementapproachforCSR.EuropeanManagementJournal,26,247-61.
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ComprehensionQuestions
1.Headings–chooseasubtitleforeachparagraph1 B CSRpopularity A ThevaluesofCSR
2 B CSRpopularity
3 C Thewayforward
4 D CSRhistoricalevolution
5 E Keychallenges
___/4
2.True/False/NotGiven–onequestionperparagraphT/F/NG1 xxi. TheUNGlobalcompactisanobligation 2 xxii. CSRhasachievedagreatdealsince1950 3 xxiii. CSRhashelpedmanycompaniesbecomemorecompetitive 4 xxiv. Long-terminvestmentinCSRboastsproductivity 5 xxv. CSRisafadandwillevolveintosomethingdifferent
___/5OpenanswerquestionsParagraph13.WhatdoesCSRleadto?i)
___/1
Paragraph24.Keychangesinthethreemainareas:
1950
Philanthropic
Religious&humanephilosophyiii)iv)
1970s
ii)___________v)vi)Legalandethicalissues
i)________Instrumental/strategic
Environmentalprotectionvii)viii)InternationalizationofCSRstandards
___/8
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Paragraph35.WhatarethemainbenefitsofCSR?1 Improvedfinancialperformance2 3 4 5
___/4
Paragraph36.NamethetwokeyfeaturesofinternalCSRbenefits.1 2
___/2
MultipleChoice:Paragraph47.Acompany’sfailureinCSRisdueto…(chooseonlyoneanswer)a onlyinvestingforalimitedamountoftimeb highermanagementarenotsupportivec notbeingattentivetostakeholdermattersd Alltheabove
___/1
Paragraph48.Themainproblemformanagersisa prioritizingandbalancingaspectsofCSRb investinglong-terminCSRc transparencyandgoalclarityd Alltheabove
___/1
Paragraph49.Theproblemswithgloballogisticchainsandoff-shoremanufacturingindustriesisa organizingCSRb managingCSRc internationalgovernmentalandenvironmentalpoliciesd Alltheabove
___/1
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DefinitionsParagraph410.Whatisgreenwashing?
___/2
Openanswers
Paragraph511.Whatarethekeyareasthatneedtobeaddressed?1 2
___/2
Paragraph512.WhatneedstobeaddedtotheCompaniesActandSocialServicesAct?1 2 3
___/3
Linkingwords
13.Referencewords–explainwhatthesereferencewordsconnectto:(underlinedinthetext)
Paragraph Word Connection
1 it Answer:CSR
2 this
3 this
4 it
5 this
___/4
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13.Author’sstance?IstheauthorfororagainstCSR?Why?For Against[chooseone]Why?
___/2
14.Keylanguage–explainthesetermsfromthecontext/usesynonymswhereappropriate)Paragraph Word Explanation
1 indispensable
absolutelynecessary
1
culminates i)
2 prominence ii)
3 pre-eminent iii)
3 resilience iv)
4 salient v)
4 exacerbated vi)
5 fad vii)
5 recognition viii)
5 mechanisms ix)
5 existing x)
___/10
OverallTotal:____/50
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ComprehensionQuestionsANSWERS
1.Headings–chooseasubtitleforeachparagraph1 B CSRpopularity A ThevaluesofCSR
2 D CSRhistoricalevolution B CSRpopularity
3 A ThevalueofCSR C Thewayforward
4 A Keychallenges D CSRhistoricalevolution
5 C Thewayforward E Keychallenges
___/4
2.True/False/NotGiven–onequestionperparagraphT/F/NG1 xxvi. TheUNGlobalcompactisanobligation[voluntary] F2 xxvii. CSRhasachievedagreatdealsince1950[remarkable] T3xxviii. CSRhashelpedmanycompaniesbecomemorecompetitive NG4 xxix. Long-terminvestmentinCSRboastsproductivity NG5 xxx. CSRisafadandwillevolveintosomethingdifferent[professionalpractice] F
___/5OpenanswerquestionsParagraph13.WhatdoesCSRleadto?i) increasingprofitabilityandoverallattainmentoforganisationalobjectives
___/1
Paragraph24.Keychangesinthethreemainareas:
1950
Philanthropic
Religious&humanephilosophyiii)communitydevelopmentiv)povertyalleviation
1970s
ii)Regulatedv)stakeholdertomanagerrelationshipsvi)consciousawarenessofcorporatereputationlegalandethicalissues
i)1990sInstrumental/strategic
Environmentalprotectionvii)sustainabilityviii)transparencyInternationalizationofCSRstandards
___/8
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Paragraph35.WhatarethemainbenefitsofCSR?1 Improvedfinancialperformance2 Contributiontomarketvalue3 Positiveimpactonsocietalstakeholders4 Consciousconnectionwithconsumers5 Improvedproductquality.
___/4
Paragraph36.NamethetwokeyfeaturesofinternalCSRbenefits.1 Increasedemployeecommitment2 Reducedemployeeturnover
___/2
MultipleChoice:Paragraph47.Acompany’sfailureinCSRisdueto…(chooseonlyoneanswer)a onlyinvestingforalimitedamountoftime[short-runCSRinvestmentpolicies]b highermanagementarenotsupportive
[maylackcommitmentandsupportatseniormanagementlevel]
c notbeingattentivetostakeholdermatters[Non-considerationoftheissuesstakeholdergroupsinvariousmarkets]
d Alltheabove___/1
Paragraph48.Themainproblemformanagersis…a prioritizingandbalancingaspectsofCSRb investinglong-terminCSRc transparencyandgoalclarityd Alltheabove
___/1
Paragraph49.Theproblemswithgloballogisticchainsandoff-shoremanufacturingindustriesis…a organizingCSRb managingCSRc governmentalandenvironmentalpoliciesd Alltheabove
___/1
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DefinitionsParagraph410.Whatisgreenwashing?1 PromotingtheperceptionofCSRprinciplesthroughmarketingandadvertising,
butinrealityarenotdoingitandmisleadingconsumers.[keytermsmustbeincluded]
___/2
Openanswers
Paragraph511.Whatarethekeyareasthatneedtobeaddressed?1 Therecognitionofdiversity2 collaborativeandsupportivemechanismsfromsourcetosupplychaintoseller
___/2
Paragraph512.WhatneedstobeaddedtotheCompaniesActandSocialServicesAct?1 Enforcingethicalstandards2 Theadoptionofeffectiveandtransparentsupplychainmanagementpractice3 Legalactionagainstgreenwashing/misleadingmarketingcampaigns
___/3
Linkingwords
13.Referencewords–explainwhatthesereferencewordsconnectto:(underlinedinthetext)
Paragraph Word Connection
1 it CSR
2 this CSRprogression[mustincludeprogression]
3 this Resilienceandawareness
4 it Shopdressingorgreenwashing
5 this Therecognitionofdiversity
___/4
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13.Author’sstance?IstheauthorfororagainstCSR?For Against[chooseone]
Why?Finalsentence:sustainability,transparencyandethicalstandardsarekeydriversinresponsiblebusinesspracticeandthevaluesofthesociety
___/2
14.Keylanguage–explainthesetermsfromthecontext/usesynonymswhereappropriate)Paragraph Word Explanation
1 indispensable
absolutelynecessary
1
culminates reachapointofhighestdevelopment
2 prominence thestateofbeingimportant,famous,ornoticeable
3 pre-eminent surpassingallothers;verydistinguishedinsomeway
3 resilience thecapacitytorecoverquicklyfromdifficulties;toughness
4 salient 1. mostnoticeableorimportant
4 exacerbated make(aproblem,badsituation,ornegativefeeling)worse
5 fad anintenseandwidelysharedenthusiasmforsomething,especiallyonethatisshort-lived;acraze
5 recognition acknowledgementoftheexistence
5 mechanisms establishedprocessbywhichsomethingtakesplaceorisbroughtabout
5 existing inoperationatthecurrenttime:
___/10
OverallTotal:____/50
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Globalisation:InternationalTrade
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Globalisation:InternationalTrade(Wilsonetal.2017)
1.Globalisationisaneconomicprocessthatincreasestheassimilationofeconomiesaroundtheworld,particularlythroughtradeandfinance.Thetermalsoreferstothemovementofpeople(labour)andknowledge(technology)acrossinternationalborders.Itisanextensionofthesamemarketforcesthathaveoperatedforcenturiesatalllevelsofhumaneconomicactivity–villagemarkets,urbanindustries,orfinancialcentresbeyondnationalborders(IMF,2017).Today’sglobalmarketsoffergreateropportunityforpeopletotapintomoreandlargermarketsaroundtheworld,whichmeanstheycanhaveaccesstomorecapital,technology,cheaperimports,andlargerexportmarkets.Globalisation,howeverisnotjustarecentphenomenon.Someanalystshavearguedthattheworldeconomywasjustasglobalised100yearsagoasitistoday(Kobayashi-Hillary,2008).2.Globalisationoffersextensiveopportunitiesfortrulyworldwidedevelopmentbutitisnotprogressingevenly.Thegrowinggapsbetweenrichandpoorcountries,andrichandpoorpeoplewithincountries,areincreasing.Therichestquarteroftheworld’spopulationsawitspercapitaincomeincreasenearlysix-foldduringthelastcentury,whereasthepoorestquarterexperiencedlessthanathree-foldincrease(HarrisonandCavendish,2014).However,insomecountries,especiallyinAsia,percapitaincomeshavebeenmovingrapidlytowardslevelsintheindustrialcountriessince1970.Havingsaidthis,alargernumberofdevelopingcountrieshavemadeonlyslowprogressorhavelostground.Inparticular,percapitaincomesinAfricahavedeclinedrelativetotheindustrialcountriesandinsomecountrieshavedeclinedinabsoluteterms(IMF,2017).3.Itisclearthatsomecountriesareamalgamatingintotheglobaleconomymorequicklythanothers.Countriesthathavebeenabletointegrateareseeingfastergrowthandlowerpoverty.Outward-lookingpolicieslikelowtaxesandlowtradebarriersbroughtgreaterprosperitytomuchofEastAsia,transformingitfromoneofthepoorestareasoftheworld40yearsago(IMF,2017).Duetothesepolicies,livingstandardshaverisen,andithasbeenpossibletomakeprogressondemocracyandissuessuchastheenvironmentandworkstandards.Bycontrast,inthe1970sand1980swhenmanycountriesinLatinAmericaandAfricapursuedinward-lookingpolicies(suchasprotectionismandstate-ownedcompanies),theireconomiesstagnatedordeclined,povertyincreasedandhighinflationbecamethenorm(Kobayashi-Hillary,2008).Inmanycases,especiallyinAfrica,therewereexternaldevelopmentssuchaswarandnaturaldisasters,whichmadetheproblemsworse.Encouragingthistrendtowardsoutward-lookingpolicies,notreversingit,isthebestcourseforpromotinggrowth,developmentandpovertyreduction(IMF,2017).4.Theeffectsofglobalisationcanbeseeninthreemainareas:trade,movementofpeopleandsharedknowledge.Firstofall,trade.Developingcountriesasawholehaveincreasedtheirshareofworldtradefrom19%in1971to29%in1999(IMF,2017).Asmentioned,Asia’snewlyindustrialisedeconomieshavedonewell,whileAfricaasawholehasdonepoorly.Whatcountriesexportisalsoimportant.Themostprofoundrisebyfarhasbeenintheexportofmanufacturedgoods.Theshareofprimarygoodsinworldexportssuchasfoodandrawmaterials,mostofwhichareoftenproducedbythepoorestcountrieshas
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declined(Kobayashi-Hillary,2008).Secondly,movementofpeople.Workerswhomovefromonecountrytoanothertofindbetteremploymentopportunitiesinadvancedeconomiesprovideawayforglobalwageconvergence.Harrison&Cavendish(2014)claimthereisalsothepotentialforskillstobetransferredbacktothedevelopingcountriesandforwagesinthosecountriestorise.Thirdly,informationexchangeisanimportant,oftenoverlooked,aspectofglobalisation.Directforeigninvestment,whichisprivatecapitalfromoutsidethecountry,bringsnotonlyanincreaseintheamountofacountry’scapital,butalsotechnicalinnovation(ibid).Moregenerally,knowledgeaboutproductionmethods,managementtechniques,exportmarketsandeconomicpoliciesisavailableatverylowcost,anditrepresentsahighlyvaluableresourceforthedevelopingcountries(IMF,2017).5.Inconclusion,globalisationisoneofthemosteffectivewaysofhelpingdevelopingnationsweknow.Asglobalisationhasprogressed,livingconditionshaveimprovedsignificantlyinvirtuallyallcountries.However,nocountry,leastofallthepoorest,canaffordtoremainisolatedfromtheworldeconomy.Theinternationalcommunityshouldtrybyreinforcingtheinternationalfinancialsystem,throughtrade,andthroughaidtohelpthemintegrateintotheworldeconomy,growmorerapidly,andreducepoverty.Thatisthewaytosafeguardallpeopleinallcountrieshaveaccesstothebenefitsofglobalisation.736wordsReferenceListHarrison,T.andCavendish,R,E.2014.WhyInternationalTradeistheKeytoDevelopment.TheJournalofModernEconomics.3(10),pp.178-183IMF,2017.Globalisation:Threatoropportunity[online].Availableat:https://www.imf.org/external/np/exr/ib/2000/041200to.htm[Accessed10March2017]Kobayashi-Hillary,M.2008.BuildingafuturewithBRICs.1stEd.Berlin:Springer
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ComprehensionQuestions
1.Headings–chooseasubtitleforeachparagraph1 A Keyresults
2 B Definition
3 C Integration
4 D Conclusion
5 D Conclusion E Progression
___/4
2.True/False/NotGiven–onequestionperparagraphT/F/NG
P1 Globalisationisbuiltaroundhistoricalmarketforces
P2 Globalisation’sprogressionisnotfairlybalanced
P3 Outwardlookingpoliciescanbenegativefordevelopingcountries
P4 Tradeisthemostimportanteffectofglobalisation
P5 Theglobalcommunityhasnoresponsibilitytoassistpoorercountries
___/5OpenanswerquestionsParagraph13.Whatarethefourkeytermsassociatedwithglobalization?i) Tradeii) iii) iv)
___/3
Paragraph14.Whatdoesglobalizationofferpeople?i) Largermarketsii) iii) iv) v)
___/4
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Paragraph25.Percapita–whatisthemonetarydifferencebetweenthesetwo?Richestquarter i)
Poorestquarter ii)
___/2
Paragraph26.Whatisthedifferencepercapitabetweenthesetwocontinents?Asia i)
Africa ii)
___/2
MultipleChoiceParagraph37.Outwardlookingpoliciesare…(chooseonlyoneanswer)a democraticprogressionb improvedstandardsoflivingandprosperityc loweredtariffsandtradingd Alltheabove
___/1
Paragraph38.Inwardlookingpolicies…(chooseonlyoneanswer)a aregovernmentruncompaniesb restraintradebetweencountriesc stalleconomicgrowthd Alltheabove
___/1
Paragraph39.What’sthesolutionfordevelopingcountries?(chooseonlyoneanswer)a Stopthewarsb Developoutwardlookingpoliciesc Givefinancialaidtoalleviated Alltheabove
___/1
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KeyeffectsParagraph410.TradeThestrongestriseisin… i)
Themaingoodsare… ii) iii)
Theseareproducedin… iv)
___/4
Paragraph411.PeopleWorkersbenefitsare… i)
Globalwages… ii)converge
Skilltransfertodevelopingcountriescreate…
iii)
___/2
Paragraph412.InformationexchangePrivatecapitaliscalled… i)
Increases… ii)acountry’scapital
iii)
iv)
v)
vi)
vii)
viii)
___/7
Paragraph511.Whatneedstobedone?Theinternationalcommunityshouldstrengthen…1 2
___/2
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Linkingwords
13.Referencewords–explainwhattheseconnectto:(underlinedinthetext)
Paragraph Word Connection
1 it Answer:Globalisation
2 this
3 which
4 which
5 them
___/4
14.Author’sstance?IstheauthorfororagainstGlobalisation?Why?For Against[chooseone]Why?
___/2
15.Keylanguage–explainthesetermsfromthecontext/usesynonymswhereappropriate)Paragraph Word Explanation
1 assimilation Integrate/tobecomepartofsomething
1 Totapinto i)
2 extensive ii)
2 tohavelostground iii)
3 amalgamating iv)
3 protectionism v)
4 profound vi)
4 convergence vii)
5 reinforcing viii)
5 tosafeguard ix)
___/9OverallTotal:____/55
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ComprehensionQuestions
1.Headings–chooseasubtitleforeachparagraph1 B Definition A Keyresults
2 Progression B Definition
3 Integration C Integration
4 Keyresults D Conclusion
5 Conclusion E Progression
___/4
2.True/False/NotGiven–onequestionperparagraphT/F/NG
P1 Globalisationisbuiltaroundhistoricalmarketforces[samemarketforcesthathaveoperatedforcenturies]
T
P2 Globalisation’sprogressionisnotfairlybalanced[notprogressingevenly]
T
P3 Outwardlookingpoliciescanbenegativefordevelopingcountries[Encouragingthistrendtowardsoutward-lookingpolicies]
F
P4 Tradeisthemostimportanteffectofglobalisation
NG
P5 Theglobalcommunityhasnoresponsibilitytoassistpoorercountries[‘shouldtryto’butdoesnotstateithasto/ordoesn’thaveto]
NG
___/5OpenanswerquestionsParagraph13.Whatarethefourkeytermsassociatedwithglobalization?i) Tradeii) Financeiii) Labouriv) Technology
___/3
Paragraph14.Whatdoesglobalizationofferpeople?i) Largermarketsii) Morecapitaliii) Technologyiv) Cheaperimportsv) Largerexports
___/4
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Paragraph25.Percapita–whatisthemonetarydifferencebetweenthesetwo?Richestquarter i)Six-fold
Poorestquarter ii)Three-fold
___/2
Paragraph26.Whatisthedifferencepercapitabetweenthesetwocontinents?Asia i)Movingquickly–towardslevelsofindustrialisedcountriessince
1970Africa ii)Slowprogress/lostground.Declinedinabsoluteterms
___/2
MultipleChoiceParagraph37.Outwardlookingpoliciesare…(chooseonlyoneanswer)a democraticprogressionb improvedstandardsoflivingandprosperityc loweredtariffsandtradingd Alltheabove
___/1
Paragraph38.Inwardlookingpolicies…a aregovernmentruncompaniesb restraintradebetweencountriesc stalleconomicgrowthd Alltheabove
___/1
Paragraph39.What’sthesolutionfordevelopingcountries?a Stopthewarsb Developoutwardlookingpoliciesc Givefinancialaidtoalleviated Alltheabove
___/1
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KeyeffectsParagraph410.TradeThestrongestriseis i)export
Keygoods ii)food iii)rawmaterials
Produced iv)Poorcountries
___/4
Paragraph411.PeopleWorkersbenefits i)Findbetteremploymentopportunities
Globalwages ii)converge/convergence
Skilltransfertodevelopingcountries
iii)wagesrise
___/2
Paragraph412.InformationexchangePrivatecapitalis i)DirectForeignInvestment
Increases… ii)country’scapital
iii)technicalinnovation
iv)productionmethodknowledge
v)managementtechniques
vi)exportmarkets
vii)economicpolicies
viii)valuableresourcesfordevelopingcountries
___/7
Paragraph511.Whatneedstobedone?Theinternationalcommunityshouldstrengthen…1 trade2 aid
___/2
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Linkingwords
13.Referencewords–explainwhattheseconnectto:(underlinedinthetext)
Paragraph Word Connection
1 it Answer:Globalisation
2 this Asia’srise
3 which Externaldevelopments
4 which Directforeigninvestment
5 them Poorestcountries
___/4
14.Author’sstance?IstheauthorfororagainstGlobalisation?Why?For Against[chooseone]Why?Verydescriptivetexthighlightingthekeyareasofglobalization.BUTtheauthorsstressmoreneedstobedonetomakeitfairerfordevelopingcountries.
___/2
15.Keylanguage–explainthesetermsfromthecontext/usesynonymswhereappropriate)Paragraph Word Explanation
1 assimilation Integrate/tobecomepartofsomething
1 Totapinto i)togetbenefitfrom/toaccess
2 extensive ii)coveringoraffectingalargearea
2 tohavelostground iii)tobecomelesspopular/fallbehind
3 amalgamating iv)tocombine/integrate/becomeone
3 protectionism v)toprotectdomesticindustriesfromforeigncompetition
4 profound vi)verygreatorintense
4 convergence vii)tomeetatapoint/tocometogether
5 reinforcing viii)makestronger
5 tosafeguard ix)toprotect
___/10OverallTotal:____/50
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AEUKSummaryWritingsContents:
1. Brexit:ThepathtoBrexit
2. TheFinancialCrash:Thecauseofthe2008FinancialCrisis
3. GigEconomy:TheGigEconomy
4. CSR:CorporateSocialResponsibility
5. Globalisation:InternationalTrade
Levels:*****B2/C1*****C1Copyright:Thesematerialsarephotocopiablebutwewouldappreciateitifalllogosandwebaddresseswereleftonmaterials.Thankyou.
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StudentTwotypesoflessonLesson#1:[Easy]*****[B2/C1]1.Trytopredictthecontentoftext/writedownkeyterms/ideas2.Readtext–checkwordsandmeaningswithadictionary3.Fillintheoutlinetoidentifykeypointsandsupport4.Writethesummary–onlyoneparagraph(200-250words)5.Checkkeypoints&modelanswer(trytoachieve4keypointsand4supportpoints)6.Answercriticalthinkingquestions&checkanswersLesson#2:[Hard]*****[C1]1.Readtext–nodictionary2.Fillinoutlinetoidentifykeypointsandsupport/ortakenotesfromtext4.Writethesummary–onlyoneparagraph(200-250words)5.Checkkeypoints&modelanswer(trytoachieve4keypointsand4supportpoints)6.Answercriticalthinkingquestions&checkanswers
TeacherTwotypesoflessonLesson#1:[easy]*****[B2/C1]1.Giveouttextaweek/daybeforethetest–studentsread,checkvocabularyandmeaning.2.Testday–giveoutanewcopyoftextandsummaryquestion3.Set1hourtoreadtext,takenotesandwritethesummary4.Thesummary–onlyoneparagraph(200-250words)5.Feedback1:takeinandmark[usecorrectioncode*]6.Feedback2:giveoutkeypoints&modelanswer7.SUMMARY:Shouldcontainatleast4mainideaswithsupport–seeSummaryKeyPoints8.Extra:Answercriticalthinkingquestions/groupdiscussion(30minutes)
Lesson#2:[hard]*****[C1]1.Set1hourtoreadtextandwritethesummary2.Thesummary–onlyoneparagraph(200-250words)3.Feedback1:takeinandmark[usecorrectioncode*]4.Feedback2:giveoutkeypoints&modelanswer5.SUMMARY:Shouldcontainatleast4mainideaswithsupport–seeSummaryKeyPoints6.Extra:Answercriticalthinkingquestions/groupdiscussion(30minutes)
Correctioncode*:www.academic-englishuk/error-correction
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Brexit:ThepathtoBrexit
SummaryWritingCopyright:Thesematerialsarephotocopiablebutwewouldappreciateitifalllogosandwebaddresseswereleftonmaterials.Thankyou.
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ThePathtoBrexitC.Wilson(2017)
1)TheEuropeanUnionwasformedinthe1950s,specificallyunderthe1957TreatyofRomethatimplementedthesinglemarketforgoods,labour,servicesandcapitalwithcommonpoliciesontransportandagricultureandtoincorporatethecreationoftheEuropeanSocialfundandcommission.IntheseearlystagesitwastermedtheEuropeanEconomicCommission(EEC)andwasderivedofsixmemberstates;Germany,France,Italy,Belgium,theNetherlandsandLuxembourg.TheUKdeclinedaninvitationtojoin.Nevertheless,twenty-twoyearslatertheUKwasgrantedaccessionin1973andforty-threeyearslatertheUKhasvotedtoleave.2)SincejoiningtheEUbackin1973therehasbeensignificantprogressintermsofregulationandpolicy.Thefirstbeing‘theSchengenTreaty’in1985.Thistreatyratifiedaborderlesszoneacrossmemberstatestoincludecommonvisapoliciesandtheabolishmentofpassportcontrols.TheUKrefusedtosignuptothisagreement.Thesecondwas‘theMaastrichtTreaty’in1992.ThischangedthenamefromEECtotheEUandintroducedthesinglecurrencyoftheEurothroughthecreationoftheEuropeanCentralBank(ECB)tocreateasecondreservecurrencyintheworldandsolelycontrolEUmonetarypolicytomaintainstability.ItalsodevelopedabettercoordinationofeconomicpoliciesandtheimplementationofEuropeanCitizenship.ThefinaldevelopmentwastheLisbonTreatyin2007.ThisimprovedpasttreatiesbutalsoextendedpowersofjudicialmattersandEuropeanParliament.3)Atthemomentin2017,theEUconsistsof28stateswhooperatethroughasinglemarketwithstandardisedlawsandEUpoliciesaimedatensuringthefourfreedomsofthefreemovementofgoods,services,capitalandpeoplewithcommonpoliciesontrade,agriculture,fisheriesandregionaldevelopment.TheEUisthesecondlargesteconomyintheworldwithacombinedGDPof$20.75trillion,20%oftheglobalgrossdomesticproductand30%ofthenetglobalwealthof$223trillion.TheEUisthelargestexporterintheworldandsince2008isthelargestimporterofgoodsandservices.Internaltradeisaidedbytheremovaloftariffsandreducedbordercontrol.AccordingtotheOfficeofNationalStatistics(2016),theUKpaysonaverage£18bnayearformembership,thisequatesto£350millionaweek.In2016,theUKreceivedarebateof£5bnandtheEUspent£4.5bnontheUK,thereforetheUK’snetcontributionisabout£8.5bnayear.Thesecostsseemexuberantandthetruebenefitsaredifficulttocalculateagainstinvestment.Ontheonehand,theUKGovernment(2016)claimsthatEUbenefitsprovide4-5%ofUKGDPor£62-78bnayearwiththesinglemarketincreasingflowsofinvestmentandthefreemovementofpeoplebenefitsrecruitmentandknowledgetransferskills.Ontheotherhand,withoutEUmembershipthefutureisunclearbutnotnecessarilynegativeduetothefactthatthiscouldbeanewhorizonopeningbettertrademarketsoutsideacontrolledsinglemarketandinvestingsolelyintheUK.4)TheUKanditsrelationshipwiththeEUhasbeenaturbulentaffair(Young&Gee,2016)fromthestartandtherehavebeennumerouscallsforreferendums.Thesebeganjustaftertheaccessionin1975whenareferendumtoleavewascalledonthedisagreementwiththeEEC’sagriculturalpoliciesandbudgetfinancing,thenagainin1983whenMargretThatcherfamouslynegotiatedarebatefrombeingthenetcontributortotheEUfunds.Followingthatin1992,theUKsuspendeditsmembershipovertheintroductionoftheEuroandtheexchangeratemechanism.In2011,theUKpreventedtheEUGovernmentplanstolevybanksandrestrictLondon’sfinancialsector.In2013,DavidCamerontriedtorenegotiatetheUK’smembershipandhavegreaterpowerofimmigration,exclusionfromEurozonebailoutsandpreventtheEU’scommitmentof‘anevercloserunion’,whichtheUKseesasacreationofasuper-stateEuropecontrolledbyonetypeofpoliticalunion.However,thenegotiationswerenotfullymetandareferendumwasproposed.Finally,in2016,troubleinthe
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Eurozoneandtheongoingmigrantcrisisledtothereferendumbeingcalledforthe23thJune2016.Thecontrollinggovernment‘theconservatives’weredividedwiththePrimeMinister‘DavidCameron’supportingremainandtwoofhisleadingpoliticianssupportingleave.5)OnThursday23rdJuneBritainvotedtoleavetheEUwith51.9%leaveand48.1%remainoverall.However,ScotlandandNorthernIrelandhadamajorityvoteofremainwith62/38and55/44respectively.AccordingtoOfficialGovernmentfigures(2016),34millionpeoplevotedequatingtoa72%turnout,whichwasthehighesteverturnoutinthehistoryofvoting.ThereferendumresultssuggesttheUKissplitdownthemiddleinitsopinionontheEU.Themainargumentsfortheleavecampaignweretoregainsovereignty,tocutimmigration,toremoverestrictionsofthesinglemarkettoaccessglobalmarketsandtospend£350millionaweekontheUKeconomy.Economistshaveanalysedtheresultsandfoundacorrelationbetweenthepeoplewhovotedtoleavebeingaspecificsocialgrade(manual,casualworkers),non-graduatelevelofeducationandtheover60s(pensioners).Also,themainareasthatvotedleavewereplaceswithhighnumbersofimmigrants,highunemploymentanddeprivationfromlackofGovernmentfunding(mainlytheNorthofEngland).LondonontheotherhandvotedoverwhelminglytoremainintheEU(59.9%),whichsomeEconomistssuggestisbecauseofmulticulturalareas,ayoungerpopulationandhighlyeducatedresidents.6)Thereferendumvotewastoleaveso‘BrexitmeansBrexit’.SincethevotetherehasbeenachangeinPrimeMinisterandacompletepro-Brexitcabinetreshuffletoaccommodatethenewchanges.TheGovernmentwilltrigger‘Article50’ofthetreatyofLisboninMarch/April2017.TriggeringArticle50,istheformalnotificationoftheintentiontowithdrawtheUKfromtheEUandwilltheUKhastwoyearstoleavefromthatdate.Atthesametime,allthetreatiesthatgovernmembershipnolongerapplytoBritain.ThetermsofexitwillbenegotiatedbetweenBritain’s27counterparts.TheGovernmenthastwomainchoicesa‘hard’or‘soft’Brexit.AhardBrexitmeanstogiveupfullaccesstothesinglemarket,gobacktoWTOrulesfortradeandgainfullcontrolofbordersandlaws.AndasoftBrexitmeanskeepasimilarcloserelationshipwiththeEUsimilartoexistingarrangementswithfreeaccesstotheSinglemarket,bankpassportingrightsbutnoseatonEUcommission,andthisdealmustincludethefourfreedoms.Whateverthechoice,itisnowbecomingincreasinglyevidentthattheshort-termimpactislikelytobenegativewithuncertaintiesovertradearrangementsalreadyaffectingthepoundsterling.TheBankofEnglandhasstatedthatBrexitisthebiggestrisktofinancialstabilityinhistory.However,themainpointisthatnooneactuallyknowsexactlywhatwillhappenconcerningtheimplicationsofBrexitoneconomicprosperityandtheUK’sroleontheinternationalstage.References:TheUKGovernment.(2016).EuropeanUnionReferendum2016:BriefingPaperNo:CBP7639.[online]HouseofCommons.Availableat:http://researchbriefings.files.parliament.uk/documents/CBP-7639/CBP-7639.pdf[Accessed10Jan.2017].ONS,(2016).TheUK'sEUmembershipfee.[online]OffceofNationalStatistics.Availableat:https://fullfact.org/economy/our-eu-membership-fee-55-million/[Accessed10Jan.2017].Young,AandGee,G,(2016).RegainingSovereignty,Brexit,theUKParliamentandtheCommonLaw.EuropeanPublicLaw,22(1),131-147.
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Outline:Summarynote-taking–takenotesonthekeypointsofthearticle1)mainidea:
Support:
2)mainidea:
Support:
3)mainidea:
Support:
4)mainidea:
Support:
5)mainidea:
Support:6)mainidea:
Support:
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SummaryKeyPointsANSWERSAgoodsummaryshouldhave4mainideasand2pointsofsupportforeachmainidea
1)mainidea:EUHistory
Support:a) 1950’sformed–1957TreatyofRomeb) 6countries(Ger,Fr,It,Bel,Neth,Lux)c) UK1973
2)mainidea:ThreeKeyTreaties
Support:a) SchengenTreaty1985.borderlesszone/nopassportcontrols.UKrefusedtosignb) MaastrichtTreaty1992.EECtoEU/singlecurrency/ECB/EuropeanCitizenship.c) LisbonTreaty2007.judicialmattersandEuropeanParliament.
3)mainidea:TheeconomicsoftheEU
Support:a) 28MS/singlemarket/4freedoms(movement):goods,services,capital,people)b) standardisedlawsandEUpoliciesc) 2ndlargesteconomy,importer&exporter/20%GlobalGDPd) UKcosts=£18Bn(£350maweek)/rebate£5bn,payment£4.5bn,net£8.5bne) EUmembership=4-5%GDP/approx.£70Bnf) NOEUmembershipunknownhorizon??
4)mainidea:UK&EUhistoricaldisagreements
Support:a) from1975disagreementsonagriculture,budgeting,netcontributions,rebates,
theEuro,immigration,EUbailouts,super-stateEurope,troublesintheEurozoneandon-goingmigrantcrisis.
5)mainidea:Referendumanalysis
Support:a) 23rdJune2017/51.9leave48.1remain/b) leavearguments:sovereignty,immigration,singlemarketrestrictingglobaltrade,
membershipfeestoUKeconomyc) Leavevoters=workingclass,non-graduatelevel,pensioners,d) Leaveareas=highimmigration,unemployment,deprivatione) Remain=London–(multi-cultural,younger,educated)
6)mainidea:Thewayforward
Support:a) Article50–March/April=2years/Membership&treatiesnotapplicableb) HardBrexit=nosinglemarket/WTOrules/controlbordersandcustomsc) SoftBrexit=EUcloserelationship–accesstosinglemarket=include4freedomsd) Futureisunknown??BoEfinancialrisk
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SummaryModelTask:Writea200-250-wordsummaryonthekeyelementsofBrexit.
Wordcount:_____________
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SummaryModelTask:Writea250-wordsummaryonthekeyelementsofBrexit.AccordingtoWilson(2017),therelationshipbetweentheUKandtheEUhasbeena
transitionalprocessofprogressandconflictresultingin‘Britainexiting’theEU(Brexit).The
UKjoinedtheEUin1973and43yearslater,afterdecadesofpragmaticaccomplishments
(Treaties)anddisagreements,isleavingfromtheresultsofapublicreferendum.Thekey
elementstotheEUanditstwenty-eightmembersistheaccesstoonesinglemarket
throughthefourfreedomsofgoods,people,servicesandcapitalwithallmembersfollowing
standardisedlawsandpolicies.TheEUisthe2ndbiggesteconomy,importerandexporter
witha20%ofGlobalGDP.TheUKmembershipcostis£18bnayearwithanetcontribution
of£8.5bnwithanestimatedreturnof£70bnineconomicbenefit(TheUKGovernment,
2016).TheJune2016referendumresultedinamarginalwinof52%leavewiththeUK
votingforgreatersovereignty,reductionsinimmigration,opportunitiestotradeglobally
withoutEUrestrictionsandinvestmentofEUmembershipmoneyintotheUKeconomy
instead.Thefutureisfulloffinancialrisk(BankofEngland,2016)andtheUKgovernment
hastodecidewhichdirectiontotake;ahardBrexit,whichleavestheEUcompletelyora
softBrexitthatkeepsacloserelationshipwithEU,accesstoitsSinglemarketbuthasno
control.Wills(2016)suggeststhatthisisunfamiliarterritoryfortheUKandthereare
uncertaintieshowitwillperformgloballyonitsown.
Wordcount:248
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CriticalthinkingQuestions1)Checkyouunderstandallkeyvocabulary(inboldinthetext)2)What’sthestanceoftheauthor–for/against?Why?3)Isthisacrediblearticle?Yes/no–why?3)Highlightkeyinformationinthetextyouwoulduseforanessayon‘theUKshouldnotleavetheEU?’
4)Highlighttwoareasinthetextthatyouquestion,disagreewithorlackevidence
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CriticalthinkingQuestionsANSWERS1)What’sthestanceoftheauthor–for/against?Why?Possiblyagainst–P3evidencetheUKquadrupleinvestmentinEUof£18bnto£62-78bn.Noevidenceprovidedforcounterargument‘futureisunclear’P6–uncertaintiesandBankofEnglandstatementsoffinancialrisk.2)Isthisacrediblearticle?Yes/no–why?Generally,yeswithtitle,author,dateandcrediblereferencelist.Includesin-textreferencestoevidence.BUTwhoistheauthor?Whoaretheywritingfor?Nopublication,nopublisher,nojournalname,noinstitution.Therefore,itwouldbegoodtouseforbackgroundandanyinformationusedshouldbefollowedupusingthereferencelistandquotingthereferencelistauthorsdirectly.3)Highlightkeyinformationinthetextyouwoulduseforanessayon‘theUKshouldnotleavetheEU?’
• P3–fourfreedomshavedevelopedtrade,reducedtariffsandcustoms• 2ndlargesteconomy/exporter/importer• netcontribution=£8.5bnperyear–returnof£62-78bn• Knowledgetransferskills/Futureisunclear.
• P5–votewastooclose–notover-whelming• SovereigntyishavingavoiceintheEU/Isimmigrationreallybad?/UKwillhave
topaytousethesinglemarketsowon’tsave£350m
• P6–HardBrexit=leavingthesinglemarketwillaffecthundredsofbusiness/financialrisk/nobodyknows?
4)Highlighttwoareasinthetextthatyouquestion,disagreewithorlackevidence
• P3–Governmentclaims£62–78bn=prediction?• P5–arethecampaignargumentsaccurate?Exaggerations?• Economistshaveanalysed(whoarethey?Noreference??)• Thecorrelationseemsuntruelookingatthemapofhoweveryonevoted??• Couldlackofgovernmentfundingbethemainreasonfortheleavevote?• PeopleinLondonarebettereducated?andyounger?• P6IsthefallinpoundbecauseofBrexit?• TheBankofEngland(19thJan2017)nowclaimsEUnotUKwillsufferfinancial
risks?• DotheGovernmentknowwhattheyaredoingandhasthisbeenplannedfor
years??
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TheCausesofthe2008FinancialCrisis
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TheCausesoftheFinancialCrisis2008C.Wilson[2017]
1)In2008theworldexperiencedtheworstfinancialcrisissincetheGreatDepression(1930s).Theseveremagnitudeofthefinancialdisasterbecamefullyevidenttowardstheendof2007,ithad,howeverbegunyearsearlierthroughwhatmanyclaimwasthemainfactorinthecrash;sub-primemortgagelending.Thefinancialcrisisof2007-08andtheaftershocksoftheUSsubprimemortgagecrisisof2007-09isnowconsideredtobe'TheGreatRecession'.TheUSFinancialCrisisInquiryCommission[FCIC](2011)reportedthecrisiswasavoidableandwascausedfromwidespreadfailuresinregulationoffinancialinstitutionsandtherecklessactionsinriskandborrowing.Itconcludedthatkeygovernmentalpolicymakerswereill-prepared,lackedunderstandingandaccountabilityinthefinancialsystemstheyoversaw.ThisarticlewillexaminehowsubprimemortgagelendingledtotheGreatRecession. 2)Towardstheendofthe1990spropertypurchasesbegantorise.Withsuchgrowth,lendingmoneyforhousebuyingbecameaprofitablebusinessinbothmortgagesandremortgaging.Traditionally,thehousebuyersavesupadeposit(downpayment–usuallybetween10%ofthehousecost),andcontactsabankormortgagebroker,whoconnectsthemtoalender,whointurnprovidesamortgagebasedonthegroundsofspecificcriteria(permanentemployment,nopreviousfinancialdefaults(apositivecredit-score),andtherepaymentplanisachievable).Thisischaracterizedasa‘Prime-mortgage’andthelevelofriskinlendingisextremelylow.3)Throughout2000ashomeownershipbecamemorepopularandhousepricesrosesignificantly(1997–2006housepriceroseby124%intheUSand186%intheUK(USSpindices,2016)),lendersbegantosecuritisethesemortgagesintomortgage-backedsecurities(MBS)andCollateralizedDebtObligations(CDOs)andthensoldthemtotheinvestmentbankingsector.Thesemortgageswereratedbycreditagenciesintothreeareas,‘safe’,‘ok’and‘risky’,andthensoldontotheShadowBankingSectororinvestors,non-depositorybankers,andhedgefundsrespectively.However,the‘Primemortgagemarketbegantobecomesaturatedduetothosewhoqualifiedhadone.4)Therefore,sub-primemortgagelendingwasintroducedin2002/3basedonthepresumptionthatashousepricescontinuetorise,ifaborrowerdefaultsonpaymentthelenderreprocessesthehouseasequity.Lendersbegintoaddrisktothesenewmortgagesinthatnodeposit,noproofofincome,ornodocumentswererequiredtoobtainamortgage.Anestimated$3.2trillionloanswereissuedtohomeownerswithbadcreditandundocumentedincomesbetween2002-2007(FCIC,2011),andwithsucharisederegulationofbankingpolicyoccurredtoincludefraudulentautomatedunderwritingprocessesandcreditagencies'standardsfalling.Atthesametime'predatorylending'offeredloansatlowinterestratesorAdjustableRateMortgage(ARM)rates,wheretheconsumerwasunawareofthecontractandassociatedrates(Krugman,2009).Thesub-primemortgageprocessactivelyencouragedariseinhousepriceandaphenomenonknownasthe'housingbubble',wherehousepricerisesmuchfasterthanwagesmakinghousingunaffordableorpeopleborrowingmorethantheycanrepay.5)TheshadowbankingsectorofInvestmentbankers,hedgefundsandinsurancefirmsallboughtintothehighlyprofitableworldofsub-primemortgagebackedsecurities.Thesehighlyprofitablecreditinstruments(CDOs),weretradedinternationallythroughderivativesandforeignexchangetradingandspreadacrosstheglobalfinancialcommunity.By2006,80%ofU.Smortgagesweresubprimeloanswithanestimatedvalueof$1.4trillion(FCIC,2011)Shadowbankingoftenreferredtoasparallelbanking,werenotsubjecttothesamebankingregulatorycontrols,theseinstitutionswerevulnerableastheyborrowedshort-terminliquidmarketstopurchaselongterm,illiquidand
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riskyassets.Thismeantdisruptionsincreditmarketswouldcreaterapiddeleveraging,sellinglongtermassetsatdepressedprices.6)Interestratesbegantorisein2007,andthiswasthebeginningoftheend.Thedefaultratesbegantoincreasewithmanyborrowersunabletomeetthemonthlypayments,thisinturnmeantthatMBSandCDOsbegantolosevaluewithhigherdefaultrates.Concurrently,thehousingbubbleburstandhousepricesfell40%(FCIC,2011),leavingmanypeopleinnegativeequity.However,themostseriouseffectwasacrisisofliquidityandtrustthatoccurredacrossbanks.LehmanBrotherswentbankruptandmanymore(MerrillLynch,AIG,FreddieMac,FannieMae,HBOS,RoyalBankofScotland,Bradford&Bingley,Fortis,HypoandAlliance&Leicester)wereonthevergeofbankruptcyandneededtobebailedoutbyGovernments.Infact,21Banksand61hedgefundshadbeenforcedtodeclarebankruptcyintheUSalone(Morris&Song,2008).Theremainingbanksroseinterestratesandstoppedlendingmoney,thisbecameknownasthe'CreditCrunch'.7)Since2008,anumberofmeasureshavebeencreatedinresponsetorectifytheproblems.Theseincludefinancialrescueplans,centralbank’smonetarypoliciesofloweringinterestrates,andGovernmentalpublicstimuluspackages.Therearecallsforimprovedmarketregulationandsupervision,whichhasbeenmetthroughtheDoddFrankAct(Krugman,2009).ThiswasthelargestreformoftheU.SbankingsectorsinceWW2.Inaddition,anewglobalfinancialsystemregulatedbytheIMFisbeingimplemented,whoshouldhaveabroaderroleintheregulatorysystemoftheworldeconomy.8)Overall,thefinancialcrisisof2008wasnotjustthesub-primemortgagelendingsector.Thereareanumberofothercontributingfactorsthatthisarticlehasnotdiscussed,butprimarilyfraudulentgreedybankingpracticeseemstolieattheheartofit.Toidentifywhoisexactlytoblameisincrediblydifficultbecausetheresultsoftoxicassetsfromfraudulentunderwritingprocesses,easycreditconditions,predatorylending,deregulationandover-leveragingallhadasignificanteffectoncreatingoneofthebiggestcrashesofalltime.Itseemsthateveryonewasresponsible,fromgovernment’sinabilitytoregulateinnovativebankingpractice,Economistsunabletoforecasteconomiccollapse,financialinstitutionsexploitingthecomplexityofMBSandCDOsandevenhomeownerstakingonloanstheywereunabletopayback.Thequestionsthatexist,however,arewhetheritwillhappenagainandarethemeasuresinplacesufficienttocontrolandregulatebankingpractice.
[1003words]ReferenceListKrugman,P.(2009).TheReturnofDepressionEconomicsandtheCrisisof2008.NY.NortonCompanyLimited.Morris,S.andSongH,S.(2009).FinancialRegulationinaSystemContext.BrookingsPapersonEconomicActivity,2008(2),pp.229-274.Availableat:http://www.princeton.edu/~smorris/pdfs/Morris-FinancialRegulationinaSystemContext.pdf[Accessed21Jan.2017].Thefinancialcrisisinquiryreport[FCIR]:finalreportoftheNationalCommissionontheCausesoftheFinancialandEconomicCrisisintheUnitedStates.(2011).ChoiceReviewsOnline,[online]48(12),pp.48-7034.Availableat:http://fcic-static.law.stanford.edu/cdn_media/fcic-reports/fcic_final_report_full.pdf.[Accessed18Jan.2017].USSpindices.com.(2016).S&PCoreLogicCase-ShillerU.S.NationalHomePriceNSAIndex-S&PDowJonesIndices.[online]Availableat:https://us.spindices.com/indices/real-estate/sp-corelogic-case-shiller-us-national-home-price-nsa-index[Accessed22Jan.2017]
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Outline:Summarynote-taking–takenotesonthekeypointsofthearticle1)mainidea:
Support:
2)mainidea:
Support:3)mainidea:
Support:
4)mainidea:
Support:
5)mainidea:
Support:
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6)mainidea:
Support:
7)mainidea:
Support:8)mainidea:
Support:
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SummaryKeyPointsANSWERSAgoodsummaryshouldhave4mainideasand2pointsofsupportforeachmainidea
1)mainidea:FinancialCrisisBackground
Support:• 2008=GreatDepression(1930s).'TheGreatRecession'.• Sub-primemortgagelending.• [FCIC](2011)avoidable/failuresinregulationoffin.institutions/riskborrowing.• Gov.policynounderstandingandaccountabilityinthefinancialsystems.
2)mainidea:ThePrimemortgage
Support:• Lendingmoney=profitablebusiness2000.• Processdeposit&specificcriteria(permanentemployment,apositivecredit-
score,achievablerepayment).• Riskinlendingisextremelylow.
3)mainidea:Mortgagesecuritization
Support:• 1997–2006houseprice>186%UK(USSpindices,2016).• Mortgage-backedsecurities(MBS)&CollateralizedDebtObligations(CDOs).• Soldtoinvestmentbanking/ShadowBanking/investors,non-
depositorybankers,andhedgefunds.• Primemortgagesaturatedmarket
4)mainidea:Sub-primemortgage
Support:• Introducedin2002/3=housepricesrise.• Fraudulentbankingpracticenodeposit,noproofofincome,nodocuments.• Automatedcreditagencyunderwriting/predatorylending.• SPMlending=housingbubble.
5)mainidea:Profitabletrading
Support:• ShadowbankingsectorofInvestmentbankers,hedgefunds,insurancefirms• Tradedinternationally-derivativesandforeignexchangetrading• Shadowbanking(parallelbanking),dif.bankingregulatorycontrols,• Vulnerableshort-termborrowinginliquidmarkets• Rapiddeleveraging,sellinglongtermassetsatdepressedprices.
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6)mainidea:TheCollapse
Support:• Interestrates>2007,=>defaultrates.• MBSandCDOslosevalue.• Housingbubbleburst=housepricesfell<40%(FCIC,2011).• Acrisisofliquidityandtrustthatoccurredacrossbanks.• Bankbankruptcy/Governmentbailouts/creditcrunch.
7)mainidea:Newregulatorysystem
Support:• Financialrescueplans,/<interestrates,/Governmentalstimuluspackages.• DoddFrankAct(Krugman,2009).• AnewglobalfinancialsystemregulatedbytheIMFisbeingimplemented.
8)mainidea:thefutureSupport:
• Othercontributingfactors• Fraudulentunderwritingprocesses,easycreditconditions,predatorylending,
deregulationandover-leveraging.• Government’sinabilitytoregulateinnovativebankingpractice,• Economistsunabletoforecasteconomiccollapse,• FinancialinstitutionsexploitingthecomplexityofMBSandCDOs• Homeownerstakingonloanstheywereunabletopayback.• Willithappenagain?
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SummaryModelTask:Writea200-250wordsummaryonthekeyelementsofthe2008FinancialCrisis
Wordcount:_____________
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FinancialCrisis:ModelSummaryTask:Writea250-wordsummaryonthekeyelementsofthe2008FinancialCrisisAccordingtoFCIC(ascitedinWilson,2017),thefinancialcrisiswasprimarilycausedfrom
fraudulentbankpractice,economistsbeingunabletoforecastglobalemergencies,and
Governmentalpolicylackinginnovationintheregulationoffinancialsystems.Thecrashand
itsconsequencesbecameknownas‘theGreatRecession’,withmanyclaimingthatitwas
thehigh-risksub-primemortgagelendingsectorresponsibleforthecollapse.Wilson(2017)
highlightsthatinthebeginningofthe2000,mortgagelendinghadbecomeprofitable
businesswithmanybankssecuritizinghomeloansintoMortgageBackedSecurities(MBS)
andCollateralizedDebtObligations(CDOs)andtradingtheseontheglobalmarket.Asthe
tradegrewandwithlittleregulation,thesystembegantobeexploitedwithscrupulous
lendersprovidingmortgagestohigh-riskclients.Fraudulentbankingpracticeincluded
creatingmortgageswithoutdeposits,proofofincomeandofficialdocumentation,with
creditagencyunderwritingservicesfailingtomeetglobalstandardprocedures.Inaddition,
theriseofparallelbanking,aformofshadowbankingthatincludedinsurancefirmsand
hedgefundstakingriskysecuritiesandtradingthemontheworldmarkets,meanttracking
andregulatingthebankingpracticewasimpossible.Theriseofinterestratesin2007,
createdsignificantdefaultrates,whichinturnledtoabankingcrisisofliquidity.Manytop
bankswereonthebrinkofbankruptcy,needingGovernmentinterventionandfinancial
assistance.Governmentshavesinceimplementedaseriesofstimuluspackagesthatinclude
loweringinterestratesandregulatingbankingpracticethroughtheDoddFrankActandIMF
GlobalFinancialsystem.
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CriticalthinkingQuestionsi)What’sthestanceoftheauthor?Doeshethinkthatthebankingindustrywasresponsible?Highlightwhere?
[2points]ii)Isthisacrediblearticle?Yes/no–why?
[2points]iii)Highlightfourkeypartsofinformationinthetextyouwoulduseforanessayon‘Sub-primemortgagetradingwasthemaincauseofthefinancialcrash’.
[4points]iv)Highlighttwoareasinthetextthatyouquestion,disagreewithorlackevidence
[2points]
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CriticalthinkingQuestionsi)What’sthestanceoftheauthor?Doeshethinkthatthebankingindustrywasresponsible?Highlightwhere?YES,butprimarilyfraudulentgreedybankingpracticeseemstolieattheheartofit(P8)(Thisisadirectopinionatedstatementmadebytheauthor)YES,fraudulentunderwritingprocesses,easycreditconditions,predatorylending,deregulationandover-leveragingallhadasignificanteffectoncreatingoneofthebiggestcrashesofalltime(P8)(allofthesepointtowardsbanking)[2points]ii)Isthisacrediblearticle?Yes/no–why?Yes,sourcesaregenerallyacademic/includesin-textsourcestokeydata.BUTwhoistheauthor?Notworkingwithapublisherorinstitution.Therefore,besttousethesourcesinthereferencelist.[2points–yes1pointBUT1point]iii)Highlightkeyinformationinthetextyouwoulduseforanessayon‘sub-primemortgagetradingwasthemaincauseofthefinancialcrash?’
• Lendersbegantosecuritisethesemortgagesintomortgage-backedsecurities(MBS)andCollateralizedDebtObligations(CDOs)
• Primemortgagemarketbegantobecomesaturated• Lendersaskedfornodeposit,noproofofincome,ornodocuments• $3.2trillionloanswereissuedtohomeownerswithbadcreditandundocumented
incomesbetween2002-2007(FCIC,2011),• 'Predatory’lendingofferedloansatlowinterestratesorAdjustableRate
Mortgage(ARM)rates,consumerunawareofthecontractandassociatedrates.• Profitablecreditinstruments(CDOs),weretradedinternationallythrough
derivatives&foreignexchangetrading&acrosstheglobalfinancialcommunity• Shadowbankingoftenreferredtoasparallelbanking,werenotsubjecttothe
samebankingregulatorycontrols• FinancialinstitutionsexploitingthecomplexityofMBS/CDOs[4ideas=4points]
iv)Highlighttwoareasinthetextthatyouquestion,disagreewithorlackevidenceP1:whatmanyclaimwasthemainfactorinthecrash;sub-primemortgagelending.Who?P5:Howmuchmoneywerepeoplemakingbuying&sellingCDOs?P5:WhywereparallelbankingnotsubjecttosameregulatorycontrolsP6:Arepeoplestillinnegativeequity?P7:Didpoliciesofloweringinterestrateswork?P7:IstheIMFregulationhappeningnowin2017?P8:Whydidn’tthegovernmentkeepupwithbankingtechnology?P8:Whycouldn’teconomistsseetheF.Ccoming?P8:Haveanyofthefinancialinstitutionsapologisedorbeenfined?P8:Arehomeownerstoblame?[TheseC.Tideasarebasedonneedingmoreinformation][any2ofthese–obviouslysubjective:anycrediblestudentanswertoo][2points]
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TheGigEconomy
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TheGigEconomyC.Wilson(2017)
1)Theworkingworldischanging.Inourincreasingflexiblelabourmarket,thenotionofa‘jobforlife’andtheconceptof9-5workdayisdiminishing.Initsplaceisthegigeconomy,whicharecollaborativeworkingplatformswherepeopleworkontemporarycontracts(gigs),oftenasfreelancersandself-employed.RecentresearchfromOxfordUniversity(2016)suggeststhatthislabourmarkethasgrown25%,withpredictedgrowthofupto40%by2020,andisoccupiedby30%oftheUK’spopulationworkingonshort-termtemporaryprojects.Thissignificantgrowthisattributedtodigitalization,increasedfinancialpressuresandtheincreasedfrequencyofpeoplechangingjobs(TheRecruitment&EmploymentConfederation(REC),2016).2)DefiningtheGigEconomyisincrediblydifficultbecauseofhowdiversethelabourmarketis.WorldleadingresearchfromtheMckinseyReport(2016)definesitas‘independentworkthatencapsulatesautonomy,paymentforthetaskorassignmentorsalesandashort-termrelationshipbetweentheworker’.Thisincludespeoplewhoprovidelabourservicesaswellasthosewhotradeingoodsorrentassets.TheMcKinseyReportalsodefinesworkersintofourbands:FreeAgents,CasualEarners,ReluctantsandFinanciallyStrapped.VaughanandDaverio(2016)separatethegigeconomyintofivekeysectors:peertopeeraccommodation,peer-to-peertransportation,ondemandhouseholdservices,ondemandprofessionalservicesandcollaborativefinance.Overall,theseeconomiesareindependenttemporaryshort-termpositionsthatincludeaformofcollaborativeconsumptionandareoftenoperatedthroughadigitalplatform.Thisarticlewillusethe‘gigeconomy’asanumbrellatermtoincludealloftheabove.3)Thereare275collaborativeeconomyplatformsintheEUcreatinganestimated€25bnannually(VaughanandDaverio,2016).Keyleadersinpeer-to-peeraccommodationarecompanieslikeAirbnb.Thisplatformallowsindividualstorentoutaspareroomoranentirehousetotravellers.Themaindriveristhecreationofextraincomeforthesupplierbutalsocreatinganauthenticexperienceandcheaperaccommodationforthetraveller.Peer-to-peertransportationisUberwhoprovide‘ataxistyle’servicethroughtheirUberapp.ClientssubmitatriprequestandtheapplinksthemtothenearestUber‘gig’driver.Apopularon-demandhouseholdserviceisthecompanyDeliveroo,whoareanonlinefooddeliveryservicecompanythroughwhichcustomersorderfoodfromlocalrestaurantsadvertisedontheDeliverooplatform.Thefoodisthencollectedanddeliveredbygigemployeeswithin30minutes.Ondemandprofessionalservicesarecompanieslikepeopleperhour.comorfreelancer.com.Theseplatformsadvertiseandorganizetopprofessionals.Workersshowcasetheirportfolios,recentworkandtrustedreviewssothatemployerscanchooseappropriately.Finally,collaborativefinanceiscommonlytermedas‘crowd-funding’theseofferindividualsandbusinessesopportunitiestoinvest,lendandborrowdirectlybetweeneachother.ThegigeconomyisquicklybecomingavitalcomponentoftheUKlabourmarketforarangeofsectorsandindustries(REC,2016).4)Thetransformativeimpactofthegigeconomyishavingveritableeconomicbenefitsbyraisinglabourforceparticipation,stimulatingconsumption,andboostingproductivity
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(McKinseyReport2016).Itismeetingthegrowingdemandforservicesfromconsumersandorganisationsandhasthepotentialforconsiderablegrowthanddevelopmentoverthenext20years(REC,2016).Researchseemstosuggestthatthegigeconomyoffersabetterwork-lifebalancethroughautonomyandflexibility.Inaddition,businessesarebenefittingfromhavingaccesstoaglobaltalentpool,reductioninoperationalcostsandloweringtherisksoflong-termemploymentcontracts.5)Sucharapidgrowthofthegigeconomyisposingprofoundchallengesforpolicymakersandregulators.Therearealreadysignificantdifferencesinregulatoryframeworksintaxpolicies,applicationsandenforcementacrossEurope(VaughanandDaverio,2016:3).REC(2016)claimsthatworkersarenotprotectedbycommonworkers’rightslaws,donotqualifyforsick,holidayorpensionentitlements,andtheycanbeforcedtoworkatlowerrateswithnojobsecurityorcontinuity.Withregardstoemployers,REC(2016)statesthatgigworkersmaynotbeloyaltothecompany’sbrand,thereisalsothepossibilitythatcrowdsourcingprofilesaredeceptiveorexaggerated,andwithlittleregulatorycontrolofgigemployees,companiesmaybecomeembroiledinlegaldisputesoverworker’srights.Overall,itseemsthatthegigeconomyhasanumberofchallengestobeaddressed.6)Thecommodisationofthelabourmarkethascreatedshortfixedworkingcontracts,andlimitedjobsecurity,andlifetimeemploymentwithonecompanyisnowarelicofthepast.Digitaltechnologiesarechangingworkpatternsandofferinggreateropportunities.Itseemsnosurprisethatparticipationinthecollaborativeeconomyishighestamongthewell-educatedunder35agerange(VaughanandDaverio,2016),thussuggestingthisisgoingtobethefutureofemployment.Thebiggestchallengeforthegigeconomyisregulationandcontrol.Researchiskeyinenablingpolicy-makerstomodernizeclassificationsofworkpatterns,taxfilingandcompliancerequireimprovements.Itisimperativethatthisresearchimprovesregulationofferingprotectionforlow-skilled,low-paidgigworkerswithbetterworkingrights,acknowledgingdisabilityanddiscriminationlawsandalsocontrollingminimumwages.Overall,‘regulatingthegigeconomyisaboutallowinginnovationtoflourishbutmakingsuretheadvantagesarewell-distributed’(REC,2016:56).
[Words:860]ReferencesTheMckinseyReport(2016)IndependentWork:choice,necessityandthegigeconomy(October2016).MckinseyGlobalInstitutePublications.TheRecruitment&EmploymentConfederation(2016)GigEconomy:TheUberisationofWork.InstituteofRecruitmentProfessionalspublishing.TheUniversityofOxford(2016)RiseofOnlineWorkCapturedintheFirstOnlineLabourIndex.Availableat:http://www.ox.ac.uk/news/2016-09-21-rise-online-work-captured-first-online-labour-index[Accessed03February2016)Vaughan,R.&Daverio,R.(2016)AssessingtheSizeandPresenceoftheCollaborativeEconomyinEurope.PWC-EuropeanCommissionPaper(DGGROW).
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Outline:Summarynote-taking–takenotesonthekeypointsofthearticle1)mainidea:
Support:
2)mainidea:
Support:3)mainidea:
Support:
4)mainidea:
Support:
5)mainidea:
Support:
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6)mainidea:
Support:
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SummaryKeyPointsANSWERSAgoodsummaryshouldhave4mainideasand2pointsofsupportforeachmainidea
1)mainidea:Theriseofthegigeconomy
Support:1)a) Theworkingworldischanging/flexiblelabourmarket.b) ‘Jobforlife’andtheconceptof9-5workday.c) Collaborativeworkingplatforms/temporarycontracts(gigs),freelancersself-employed.d) OxfordUniversity(2016)grown25%/predictedgrowth40%2020.e) 30%UK’spopulationworkingonshort-termtemporaryprojects.f) Digitalization,increasedfinancialpressures/changingjobs(REC,2016).
2)mainidea:Twodefinitions
Support:2)a) Definitiondifficult=diversemarket.b) MckinseyReport(2016)independentworkwithautonomy,paymentforthetaskor
assignmentorsalesandshort-termrelationships.c) Labourservices=tradeingoodsorrentassets.d) MR:FreeAgents,CasualEarners,ReluctantsandFinanciallyStrapped.e) Peertopeeraccommodation,peer-to-peertransportation,ondemandhousehold
services,ondemandprof.services&collaborativefinance(Vaughan&Daverio,2016).3)mainidea:Principalgigcompanies
Support:3)a) 275EUcollaborativeeconomyplatforms[€25bnannually](Vaughan&Daverio,2016).b) Peer-to-peeraccommodation=Airbnb.c) Peer-to-peertransportation=Uber.d) On-demandhousehold=Deliveroo.e) Ondemandprofessionalservices=peopleperhour.comorfreelancer.com.f) Collaborativefinance=as‘crowd-funding’.
4)mainidea:Theimportanceofthegigeconomy
Support:4)a) Economic-labourforceparticipation/stimulatingconsumption/boastingproductivity
(McKinseyReport,2016).b) Excessivegrowthanddevelopmentoverthenext20years(REC,2016).c) Workers-satisfiedbetterwork-lifebalance/autonomy/flexibility.d) Businesses-globaltalentpool,reductioninoperationalcostsandloweringlong-term
employmentcontracts.5)mainidea:Thelimitationsofthegigeconomy
Support:5)a) Profoundchallengesforpolicymakersandregulators.b) DifferencesinEUregulatoryframeworksintaxpolicies/applications/enforcement(V&D).c) Workersnoworkers’rightslaws,Nosick,holidayorpensionentitlements/lowerrates
withnojobsecurityorcontinuity.d) Employeesnotloyaltothebrand/crowdsourcingprofilesaredeceptiveorexaggerated,
andwithlittleregulatorycontrol=embroiledinlegaldisputesoverworker’srights.(REC)
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6)mainidea:Futurechallenges
Support:6)a) Gigeconomyishighestunder35well-educatedagerange(Vaughan&Daverio,2016)b) Thebiggestchallengeisregulationandcontrol.c) Researchmodernizeclassificationsofworkpatterns,taxfilingandcompliance
requirements.d) Regulationoffersprotectionforlow-skilled,low-paidgigworkers/betterworkingrights/
disabilityanddiscriminationlaws/minimumwage.
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SummaryModelTask:Writea200-250wordsummaryonthekeyelementsoftheGigEconomy.
Wordcount:_____________
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GigEconomy:ModelSummaryTask:Writea250-wordsummaryonthekeyelementsoftheGigEconomyAccordingtoWilson(2017),thegigeconomyisincreasinglypopularbutneedsbetter
regulationandcontroltopreventdiscriminationandexploitation.Collaborativedigital
platformsthatemployself-employedworkersarebecomingthenewflexiblelabourmarket,
withapredictedgrowthofnearlydoublein4years(OxforduniversitycitedinWilson,
2017).Thegigeconomycrossesavarietyofsectorsthusmakingitcomplicatedtooffera
cleardefinitionbutgenerallyitconsistsofshort-termworkingrelationshipsusuallybeing
independentandautonomous,withinstantpaymentsystemsforsales,tasks,tradeorrents.
Itcanbedividedintokeysectionsofaccommodation,transportation,householdtask,
professionalservicesandfinancethatallincludepeer-to-peerorcollaborativeelements
(Vaughan&DaveriocitedinWilson,2017).Thebeneficialaspectsofthegigeconomyisthat
itoffersmoreemploymentsproductivityandeconomicgrowth,forworkers,itoffers
opportunitiesforbetterwork-lifebalanceandforbusinesses,itcanimproveoperational
costsbyemployingkeystaffatbusytimes.However,thereareanumberoflimitationsthat
needtobediscussedsuchasthechallengesofhowdifferentcountriesviewgigcompanies
withdifferenttaxpoliciesandenforcements(ibid).Thereareworkerrightsissuesandno
traditionalworkingentitlements.Foremployersthereisthecontroversyofhiringstafffrom
platformsthathavenotbeencompletelyvettedandmaynotbeloyal.Overall,Wilson
(2017)claimsthatthegigeconomyneedsregulationandcontrolwhichcanonlybe
achievedthroughbetterresearch.
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CriticalthinkingQuestionsi)What’sthestanceoftheauthor?Doeshethinkthatthegigeconomyisgoodforthefutureofthelabourmarket?Highlightwhere?[2points]ii)Isthisacrediblearticle?Yes/no–why?
[2points]iii)Highlightfourkeypartsofinformationinthetextyouwoulduseforanessayon‘thegigeconomywillhaveanegativeimpactonthefuturelabourmarket’.
[4points]iv)Highlighttwoareasinthetextthatyouquestion,disagreewithorlackevidence
[2points]
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CriticalthinkingQuestionsi)What’sthestanceoftheauthor?Doeshethinkthatthegigeconomyisgoodforthefutureofthelabourmarket?Highlightwhere?Yes,goodforthefuture/economicbenefits1.Seestheeconomyasthefutureofthelabourmarket2.Butbelievesmoreregulation&researchisnecessarytomakeitfairer.[2points]ii)Isthisacrediblearticle?Yes/no–why?Yes,goodsourcechoice.Butwhoistheauthor?Notpublishedorsupportedbyajournalpublication.Probablyagoodideatousetheprimarysources[2points]iii)Highlightfourkeypartsofinformationinthetextyouwoulduseforanessayon‘thegigeconomywillhaveapositiveimpactonthefuturelabourmarket’.P1:OxfordUniversity(2016)suggeststhatthislabourmarkethasgrown25%,withpredictedgrowthofupto40%by2020.P3:275EUcollaborativeeconomyplatformsEUcreatinganestimated€25bnannually(VaughanandDaverio(2016).P3:ThegigeconomyisquicklybecomingavitalcomponentoftheUKlabourmarketforarangeofsectorsandindustries(REC,2016).P4:Thegigeconomyishavingveritableeconomicbenefitsbyraisinglabourforceparticipation,stimulatingconsumption,andboastingproductivity(McKinseyReport2016).P4:Hasthepotentialforexcessivegrowthanddevelopmentoverthenext20years(REC).P4:Workersaremoresatisfiedwithabetterwork-lifebalanceautonomyandflexibility.P4:Businessesarebenefittingfromhavingaccesstoaglobaltalentpool,reductioninoperationalcostsandloweringtherisksoflong-termemploymentcontracts(ibid).P6:Digitaltechnologiesarechangingworkpatternsandadvocatinggreateropportunities.highestamongtheunder35well-educatedagerange(VaughanandDaverio,2016),thussuggestingthisisgoingtobethefutureofemployment.[4points]iv)Highlighttwoareasinthetextthatyouquestion,disagreewithorlackevidenceP1:Digitalization,increasedfinancialpressuresandtheincreasedfrequencypeoplearechangingjobs–surelythere’smorereasonsthanthis–employersarecuttingcosts.P3:ThegigeconomyisquicklybecomingavitalcomponentoftheUKlabourmarketforarangeofsectorsandindustries(REC,2016)–couldbetruebutthesecompaniesarehavinglegalityproblemswithtraditionalcompanies.Forexample;Uberhasbeenbannedinsomecities.P4:Researchseemstosuggestthatworkersaremoresatisfiedwithabetterwork-lifebalancethroughtheautonomyandflexibility–nodataorsourceforthisstatementP4:Reductioninoperationalcostsandloweringtherisksoflong-termemploymentcontracts–Isitwhatemployersarereallytryingtoachieveanyway?P5:Therearealreadysignificantdifferencesinregulatoryframeworksintaxpolicies,applicationsandenforcementacrossEurope–likewhat?P5:Donotqualifyforsick,holidayorpensionentitlements(it’sself-employment?)P5:Gigworkersmaynotbeloyaltothebrand(aretraditionalworkers?)P6:Thebiggestchallengeforthegigeconomyisregulationandcontrol.(what’sbeingdone?)P6‘Regulatingthegigeconomyisaboutallowinginnovationtoflourishbutmakingsuretheadvantagesarewell-distributed’(isthisachievable?)[TheseC.Tideasarebasedonneedingmoreinformation][any2ofthese–obviouslysubjective:anycrediblestudentanswertoo][2points]
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CSR:CorporateSocialResponsibility
SummaryWriting
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CorporateSocialResponsibilityC.Wilson(2017)
1)CorporateSocialResponsibility(CSR)hasundergoneprofoundtransformationfromanideologyofuncertaintyintoanindispensablecomponentofbusinesspractice.Hamiduetal,(2015)acknowledgethatithasbecomeamandatorytoolinstrategizing,complyingwithregulationsandmaintainingstandards,buildingcorporatereputationandobtainingcustomerloyaltywhich‘allculminatesinincreasingprofitabilityandoverallattainmentoforganisationalobjectives’(p.83).Infact,over9,270companiesfrom166countriesaresignatoriestothevoluntaryUNGlobalCompactwhichfulfilsacompanies’obligationtoestablishissuesonhumanrights,labourstandards,theenvironmentandanti-corruptioninitiatives(Wang,2016).Overall,CSRisanintegratedstrategicapproachinresponsibilitytoachievesharedvalueforthestakeholderandsocietalobligations.2)CSR’sprogression,sinceitsintroductionin1950’s,hasbeenquiteremarkable.Inthebeginningitwascharacterizedas‘philanthropic’inseekingtopromotethewelfareofothers.Thisfocusedonmainlyreligiousandhumanephilosophies,communitydevelopmentandpovertyalleviation(Carrol,2008).Inthe1970’s,CSRbecameasymbolofcommitment.Itbecamemore‘regulated’focusingonchangingperspectivesinstakeholdertomanagerrelationships,encouragingaconsciousawarenessofcorporatereputationandplacingemphasisonlegalandethicalissues(ibid).The1990’sinstigatedwhatisnowcommonlyseenas‘instrumental/strategic’CSR.Aprominenceonenvironmentalprotection,sustainabilityandtransparencywithaclearguideoninternationalizationofCSRstandards(ibid).Insum,Matten&Moon(2002)summarisethisasaclusterconceptofbusinessethics,corporatephilanthropy,corporatecitizenship,sustainabilityandenvironmentalresponsibility,allembeddedinsocial,political,economicandinstitutionalcontexts.3)ResearchbyWeber(2008)highlightsthattheimplementationofCSRhasbecomeapre-eminentfeatureinbuildingandmaintainingcorporatereputation,whichhasbecomeregardedasanessentialstrategicresourcefactoringintoacompany’scompetitiveadvantage.Park,Lee,&Kim,(2014)claimthatthekeybenefitsbehindbeingsociallyresponsibleinclude:improvedfinancialperformance,contributiontomarketvalue,amoregeneralpositiveimpactonsocietalstakeholders,aconsciousconnectionwithconsumers,andimprovedproductquality.Theauthorsalsonotethatinternalreasonssuchasincreasedemployeecommitmentandreducedemployeeturnoverareimportantbenefits.Inaddition,Carrol(2008)assertsthatCSRactivitiesgenerateresiliencetonegativecompanyinformationandconsumers’awareness,andthiscultivatesappreciationtotheattitudesandattributionsaboutwhycompaniesareengaginginCSRinitiatives.4)TheeffectivenessofCSReffortsisoftendifficulttoobserve.Companiesoftenfailthroughshort-runCSRinvestmentpolicies.Theymaylackcommitmentandsupportatseniormanagementlevel,andfailtotakeintoconsiderationtheissuesthataresalienttostakeholdergroupsinvariousmarkets.Long-terminvestmentisthekeybutalackoftransparencyandgoalclarityoftenmakeitdifficulttounderstandandmanagetherisksandboundariesofcorporatesocialactivities(Wang,2016).HowmanagersprioritizeandbalanceaspectsofCSRisoftenachallengefacingmanycorporations.Moreover,the
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complexityinorganizingandmanagingCSRisexacerbatedformultinationalcorporationswithgloballogisticchainsandoff-shoremanufacturingindustries.ThevaluesofCSRinonecountryarenotnecessarilyinaccordancetoanothercountry’sgovernmentalandenvironmentalpolicies(Hamiduetal,2015).Afinalchallengeistheconceptof‘shopdressing’or‘greenwashing’.ThisiscompanieswhoarepromotingtheperceptionofapplyingCSRprinciplesthroughmarketingandadvertising,butinrealityarenotimplementingthebusinesspracticeandtherebymisleadingconsumers.Anexampleofitwouldbeacompanypromotingrecycledpackagingbutitsfactoriesarepollutinglocalwatercourses.5)Overthepastsixtyyears,theissueforcompanieshasbecomehowtoconductCSRinastrategicallyandeffectivelyplannedmannerthatmeetsstakeholder’sexpectations,maximisesprofitandoffersaclearanddemonstrablenarrativeofitsimpactonthecompanyandforthecommunity(Wangetal.2016).CSRisaconstantlyevolvingintegratedanddisciplinedfieldofbusinessactivity,whichhasmovedonfromthelatestmanagementfadintoasignificantprofessionalbodyofpolicyandpractice.AlthoughCSRisformedonvoluntarybasis,thereareanumberofkeyareasthatneedtobeaddressed.Therecognitionofdiversityisanecessityforauniversalapproach.Thisincludesbettercollaborativeandsupportivemechanismsfromsourcetosupplychaintoselleradvancingthesustainabilityagenda(Gov.uk,2014).Inaddition,GovernmentscouldplayagreaterrolebychangingexistinglegislationtotheCompaniesActandSocialServicesActthroughtheinclusionofenforcingethicalstandards,theadoptionofeffectiveandtransparentsupplychainmanagementpracticeandlegalactionagainstgreenwashing/misleadingmarketingcampaigns.Overall,sustainability,transparencyandethicalstandardsarekeydriversinresponsiblebusinesspracticeandthevaluesofthesociety. References Carroll,A.B.(2008)AHistoryofCorporateSocialResponsibility:conceptsandpractices,inCrane,A.etal(eds),TheOxfordHandbookofCorporateSocialResponsibility,OxfordUniversityPress,pp.19-46Gov.uk.(2014).CorporateResponsibility:Goodforbusiness&society.DepartmentforBusinessInnovation&Skills.Availableat:https://www.gov.uk/government/uploads[Accessed17February2017]Hamidu,A.Haron,H.&Amran,A.(2015).CSR:AReviewofDefinitions,CoreCharacteristicsandTheoreticalPerspectives.JournalofSocialSciences.6(4)83-95Matten,D.,&Moon,J.(2004)ImplicitandExplicitCSR:AconceptualframeworkforunderstandingCSRinEurope.ICCSRResearchPaperSeries(29-2004),UniversityofNottinghamPark,J.,Lee,H.,&Kim,C.(2014).Corporatesocialresponsibilities,consumertrustandcorporatereputation:SouthKoreanconsumers’perspectives.JournalofBusinessResearch,67,295-302.Wangetal.,(2016).CorporateSocialResponsibility:anoverviewandnewresearchdirections.AcademyofManagementJournal.59,(2)534–544.Weber,M.(2008).TheBusinessCaseforCorporateSocialResponsibility:acompanylevelmeasurementapproachforCSR.EuropeanManagementJournal,26,247-61.
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Outline:Summarynote-taking–takenotesonthekeypointsofthearticle1)mainidea:
Support:
2)mainidea:
Support:3)mainidea:
Support:
4)mainidea:
Support:
5)mainidea:
Support:
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SummaryKeyPointsANSWERSAgoodsummaryshouldhave4mainideasand2pointsofsupportforeachmainidea
1)CSRpopularity
• (CSR)uncertaintyofbusinesspractice.• Tool=strategizing/regulations/standards/reputation/customerloyalty/profitability
organisationalobjectives(Hamiduetal,2015p.83).• UNGlobalCompact=humanrights,labourstandards,theenvironmentandanti-
corruptioninitiatives(Wang,2016).• CSR=integratedstrategicapproachinresponsibilitytoachievesharedvaluefor
stakeholderandsocietalobligations.2)CSRhistoricalevolution
• 1950s‘philanthropic’=welfareofothers/religiousandhumanephilosophies/communitydevelopmentandpovertyalleviation(Carrol,2008).
• 1970’s,‘regulated’=changingperspectivesinstakeholdertomanagerrelationships,/consciousawarenessofcorporatereputation/legalandethicalissues
• 1990’s‘instrumental/strategic’=environmentalprotection,sustainabilityandtransparency/internationalizationofCSRstandards(ibid).
• allembeddedinsocial,political,economicandinstitutionalcontexts.3)ThevalueofCSR
• Weber(2008)corporatereputation,=competitiveadvantage.• keybenefits=financialperformance/marketvalue/societalstakeholders/connection
withconsumers/improvedproductquality.• Internal=employeecommitment&turnover.Park,Lee,&Kim,(2014)• Inaddition,Carrol(2008)generateresiliencetonegativecompanyinformation/
consumers’awareness/cultivateappreciation4)Challenges
• Difficulttoobserve.• Failinshort-runinvestment/lackcommitment/seniormanagementsupport/theissues
stakeholdergroups/prioritizeandbalance(longterminvest.iskey)• Complexityin“organizingandmanaging”multinationalcorporationswithgloballogistic
chainsandoff-shoremanufacturingindustries.• Int.Values=governmentalandenvironmentalpolicies(Hamiduetal,2015).• ‘greenwashing’=perceptionthroughmarketing=misleadingconsumers..
5)Futureadvancements
• CSR=evolving=disciplinedfieldofbusinessactivity• Recognitionofdiversity/bettercollaborative&supportivemechanisms-sourcetosupply
chaintoseller=sustainabilityagenda(Gov.uk,2014).• Governments=existinglegislation‘CompaniesActandSocialServicesAct’=ethical
standards,transparentsupplychainmanagement&legalactionagainstgreenwashing/misleadingmarketingcampaigns.
• Overall,sustainability,transparencyethicalstandardsarekeydriversinresponsiblebusinesspracticeandthevaluesofthesociety.
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SummaryTask:Writea250-wordsummaryonthekeyelementsofCorporateSocialResponsibility.
Wordcount:_____________
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CorporateSocialResponsibility:ModelSummaryTask:Writea250-wordsummaryonthekeyelementsofCSR.AccordingtoWilson(2017),CorporateSocialResponsibility(CSR)hasdevelopedintoa
reputablestrategyandbusinesspractice.Thishasbeenevidencedthroughasubstantial
numberofcountriessanctioningtheUNGlobalCompactinitiativeonkeyCSRcommitments
ofhuman,environmentandcorruptionstandardsincompanies.ContemporaryCSR
principlesencompassphilanthropicideologywithsocialawarenessofethics,environment
andtransparency.Thisisallembeddedinfuturesustainabilityandmeetingperspectivesof
stakeholdersandprofitability.TherearekeybenefitsofimplementingCSRintobusinesses
whichareimprovingcorporatereputationandadvantage(WebercitedinWilson2017)and
providingabetterconnectionwithconsumers.Itisclaimedthatitincreasesemployee
commitmentsandreducesstaffturnover.Nevertheless,thefinancialbenefitsaredifficultto
observeespeciallyinshort-runinvestmentplansandmanycompanieslackserious
commitment.Inaddition,thereareanumberofissuesimplementingCSRacrossglobal
networksandsupplychainsduetodifferentperceptionsofCSRinternationally.Wilson
(2017)highlightsaworryingtrendknownas‘greenwashing’,wherebycompaniesare
promotingCSRbutinrealityarenotmeetingthestandardssetanddeceivingconsumers.
Overall,CSRisanimportantinstrumentforachievingsustainableandtransparentbusiness
practice;however,itneedsimprovementsinlegislationforinternationalCSRstandards,
bettersupportmechanismstohelpcompaniesdeveloptheirCSRstrategiesand
acknowledgementofcompanydiversityinimplementingCSR.
[235words]
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CriticalthinkingQuestions1)What’sthestanceoftheauthor?DoeshethinkthattheCSRisgoodforthefuturebusinesspractice?Highlightwhere?
[2points]2)Isthisacrediblearticle?Yes/no–why?
[2points]3)Highlightfourkeypartsofinformationinthetextyouwoulduseforanessayon‘CSRisapositivestrategyforbusinesspractice’.
[4points]4)Highlighttwoareasinthetextthatyouquestion,disagreewithorlackevidence
[2points]
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CriticalthinkingQuestionsi)What’sthestanceoftheauthor?DoeshethinkthattheCSRisgoodforthefuturebusinesspractice?Highlightwhere?Yes,anindispensablecomponentofbusinesspractice(paragraph1)Sustainability,transparencyandethicalstandardsarekeydriversinresponsiblebusinesspracticeandthevaluesofthesociety.(paragraph5)[2 points]ii)Isthisacrediblearticle?Yes/no–why?Yes,goodsourcechoice.Butwhoistheauthor?Notpublishedorsupportedbyajournalpublication.Probablyagoodideatousethekeysources[2points]iii)Highlightfourkeypartsofinformationinthetextyouwoulduseforanessayon‘CSRisapositivestrategyforbusinesspractice’.P1)anindispensablecomponentofbusinesspracticeP1)Infact,over9,270companiesfrom166countriesaresignatoriestothevoluntaryUNGlobalCompactP2) Matten&Moon(2002)summarisesthisasaclusterconceptofbusinessethics,corporatephilanthropy,corporatecitizenship,sustainability,andenvironmentalresponsibility,allembeddedinsocial,political,economicandinstitutionalcontexts.P3)Allofparagraph3P5)Overthepastsixtyyears,…thatmeetsstakeholder’sexpectations,maximisesprofitandoffersaclearanddemonstrablenarrativeofitsimpactonthecompanyandforthecommunity.P5)Overall,sustainability,transparencyandethicalstandardsarekeydriversinresponsiblebusinesspracticeandthevaluesofthesociety.
[4points]iv)Highlighttwoareasinthetextthatyouquestion,disagreewithorlackevidenceP1)over9,270companiesfrom166countries[notmanycompanies??]P1)toachievesharedvalueforstakeholderandsocietalobligations.[doesit?]P3)…factoringintoacompany’scompetitiveadvantage[nodatatosupportthis?]P3)improvedfinancialperformance[nodata]Overall,paragraph3=nodataorstats=noevidenceP4)short-runCSRinvestmentpolicies[whydocompaniesdothis?]P4)theissuesthataresalienttostakeholdergroupsinvariousmarkets.[whatarethese?]P4)multinationalcorporationswithgloballogisticchainsandoff-shoremanufacturingindustries[whatareinternationalCSRpolicies?]P4)Nosourcefortheseterms‘shopdressing/greenwashing’?[whocreatedtheseterms?]P4)‘Shopdressing’[what’sanexampleofthis?]P4)‘Greenwashing’[nodata/evidence–howbadisit?]P5)CSRisformedonvoluntarybasis[isthisaproblem?–shoulditbelaw?]P5)Therecognitionofdiversityisanecessityforauniversalapproach[howcanthisbedone?]P5)includesbettercollaborativeandsupportivemechanisms[how?]P5)Governmentscouldplayagreaterrole[butwillthey?]P5)legalactionagainstgreenwashing/misleadingmarketingcampaigns[difficulttoprove?]P5)responsiblebusinesspracticeandthevaluesofthesociety[isitworking?][any2ofthese–obviouslysubjective:anycrediblestudentanswertoo][2points]
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Globalisation:InternationalTrade
SummaryWritingCopyright:Thesematerialsarephotocopiablebutwewouldappreciateitifalllogosandwebaddresseswereleftonmaterials.Thankyou.
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Globalisation:InternationalTrade(Wilsonetal.2017)
1.Globalisationisaneconomicprocessthatincreasestheassimilationofeconomiesaroundtheworld,particularlythroughtradeandfinance.Thetermalsoreferstothemovementofpeople(labour)andknowledge(technology)acrossinternationalborders.Itisanextensionofthesamemarketforcesthathaveoperatedforcenturiesatalllevelsofhumaneconomicactivity–villagemarkets,urbanindustries,orfinancialcentresbeyondnationalborders(IMF,2017).Today’sglobalmarketsoffergreateropportunityforpeopletotapintomoreandlargermarketsaroundtheworld,whichmeanstheycanhaveaccesstomorecapital,technology,cheaperimports,andlargerexportmarkets.Globalisation,howeverisnotjustarecentphenomenon.Someanalystshavearguedthattheworldeconomywasjustasglobalised100yearsagoasitistoday(Kobayashi-Hillary,2008).2.Globalisationoffersextensiveopportunitiesfortrulyworldwidedevelopmentbutitisnotprogressingevenly.Thegrowinggapsbetweenrichandpoorcountries,andrichandpoorpeoplewithincountries,areincreasing.Therichestquarteroftheworld’spopulationsawitspercapitaincomeincreasenearlysix-foldduringthelastcentury,whereasthepoorestquarterexperiencedlessthanathree-foldincrease(HarrisonandCavendish,2014).However,insomecountries,especiallyinAsia,percapitaincomeshavebeenmovingswiftlytowardslevelsintheindustrialcountriessince1970.Havingsaidthis,alargernumberofdevelopingcountrieshavemadeonlyslowprogressorhavelostground.Inparticular,percapitaincomesinAfricahavedeclinedrelativetotheindustrialcountriesandinsomecountrieshavedeclinedinabsoluteterms(IMF,2017).3.Itisclearthatsomecountriesareamalgamatingintotheglobaleconomymorequicklythanothers.Countriesthathavebeenabletointegrateareseeingfastergrowthandlowerpoverty.Outward-lookingpolicieslikelowtaxesandlowtradebarriersbroughtgreaterprosperitytomuchofEastAsia,transformingitfromoneofthepoorestareasoftheworld40yearsago(IMF,2017).Duetothesepolicies,livingstandardshaverisen,andithasbeenpossibletomakeprogressondemocracyandissuessuchastheenvironmentandworkstandards.Bycontrast,inthe1970sand1980swhenmanycountriesinLatinAmericaandAfricapursuedinward-lookingpolicies(suchasprotectionismandstate-ownedcompanies),theireconomiesstagnatedordeclined,povertyincreasedandhighinflationbecamethenorm(Kobayashi-Hillary,2008).Inmanycases,especiallyinAfrica,therewereexternaldevelopmentssuchaswarandnaturaldisasters,whichmadetheproblemsworse.Encouragingthistrendtowardsoutward-lookingpolicies,notreversingit,isthebestcourseforpromotinggrowth,developmentandpovertyreduction(IMF,2017).4.Theeffectsofglobalisationcanbeseeninthreemainareas:trade,movementofpeopleandsharedknowledge.Firstofall,trade.Developingcountriesasawholehaveincreasedtheirshareofworldtradefrom19%in1971to29%in1999(IMF,2017).Asmentioned,Asia’snewlyindustrialisedeconomieshavedonewell,whileAfricaasawholehasdonepoorly.Whatcountriesexportisalsoimportant.Themostprofoundrisebyfarhasbeenintheexportofmanufacturedgoods.Theshareofprimarygoodsinworldexportssuchasfoodandrawmaterials,mostofwhichareoftenproducedbythepoorestcountrieshas
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declined(Kobayashi-Hillary,2008).Secondly,movementofpeople.Workerswhomovefromonecountrytoanothertofindbetteremploymentopportunitiesinadvancedeconomiesprovideawayforglobalwageconvergence.Harrison&Cavendish(2014)claimthereisalsothepotentialforskillstobetransferredbacktothedevelopingcountriesandforwagesinthosecountriestorise.Thirdly,informationexchangeisanimportant,oftenoverlooked,aspectofglobalisation.Directforeigninvestment,whichisprivatecapitalfromoutsidethecountry,bringsnotonlyanincreaseintheamountofacountry’scapital,butalsotechnicalinnovation(ibid).Moregenerally,knowledgeaboutproductionmethods,managementtechniques,exportmarketsandeconomicpoliciesisavailableatverylowcost,anditrepresentsahighlyvaluableresourceforthedevelopingcountries(IMF,2017).5.Inconclusion,globalisationisoneofthemosteffectivewaysofhelpingdevelopingnationsweknow.Asglobalisationhasprogressed,livingconditionshaveimprovedsignificantlyinvirtuallyallcountries.However,nocountry,leastofallthepoorest,canaffordtoremainisolatedfromtheworldeconomy.Theinternationalcommunityshouldtrybyreinforcingtheinternationalfinancialsystem,throughtrade,andthroughaidtohelpthemintegrateintotheworldeconomy,growmorerapidly,andreducepoverty.Thatisthewaytosafeguardallpeopleinallcountrieshaveaccesstothebenefitsofglobalisation.[736words]ReferenceListHarrison,T.andCavendish,R,E.2014.WhyInternationalTradeistheKeytoDevelopment.TheJournalofModernEconomics.3(10),pp.178-183IMF,2017.Globalisation:Threatoropportunity[online].Availableat:https://www.imf.org/external/np/exr/ib/2000/041200to.htm[Accessed10March2017]Kobayashi-Hillary,M.2008.BuildingafuturewithBRICs.1stEd.Berlin:Springer
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Outline:Summarynote-taking–takenotesonthekeypointsofthearticle1)mainidea:
Support:
2)mainidea:
Support:3)mainidea:
Support:
4)mainidea:
Support:5)mainidea:
Support:
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SummaryKeyPointsANSWERSAgoodsummaryshouldhave4mainideasand2pointsofsupportforeachmainidea
1)Globalisationdefinition
• Integrationofeconomiesaroundtheworld(tradeandFinance/people/knowledge)
• Opportunities–largermarkets/morecapital/tech/cheaperimports/largerexports
2)Progression
• Unequal–gapsbetweenrich&poor/Asia=industrialised• Africa=declinedinabsoluteterms
3)Integration
• Outwardlookingpolicies(lowtaxes&tradebarriers)=growth,prosperityandLowerpoverty• Inwardlookingpolicies(stateownedcompanies,protectionism)=stagnation&
poverty
4)Keyeffects
• Trade–<worldshare/manufacturingexportBUTfood/rawmaterials<• Movement=employment/skillstransfer• Informationexchange=sharingofknowledge(production,economies,exporting)
5)Conclusion
• G.CreatesbetterprosperityandlivingconditionsBUTinternationalcommunityneedstohelplessdevelopedcountries.
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SummaryTask:Writea150-200-wordsummaryonthekeyelementsofGlobalisation
Wordcount:_____________
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WhyinternationalTradeistheKeytodevelopmentModelAnswer
Task:Writea150-200-wordsummaryonthekeyelementsofGlobalisationSummaryAccordingtoWilsonetal.(2017),globalisationistheprocessofintegratingeconomies
throughmainlytradeandfinance,peopleandknowledge.Thisprogressionisnotalways
positiveandcreatesdifferencebetweentherichandpoorwithinandbetweencountries.
Globalisationintegrationcanaccelerateprosperitythrough‘outward-lookingpolices’that
reducetaxesandtradebarriers.However,lessdevelopedcountrieswith‘inwardlooking
polices’thathaveprotectionismpracticesandstate-ownedcompaniestendtohave
stagnatedeconomiesandmorepoverty(Kobayashi-HillarycitedinWilsonetal.2017).
Globalisationcanhavethreemaineffects;firstly,‘trade’createsabiggerworldshareand
betterexportingopportunities.Secondly,‘movement’improvesemploymentanddevelops
skillstransfer.Thirdly,‘informationexchange’sharesimportantknowledgeoneconomics,
productionandbusinesspracticearoundtheworldforalowercost.Overall,Globalisation
establishesprosperityandimprovedlivingconditions,however,thereisaneedforthe
internationalcommunitytoinvestinlessdevelopedcountries.
Approx170words
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CriticalthinkingQuestions1)What’sthestanceoftheauthor?Doeshethinkthatglobalizationgoodorbad?Highlightwhere?
[2points]2)Isthisacrediblearticle?Yes/no–why?
[2points]3)Highlightfourkeypartsofinformationinthetextyouwoulduseforanessayon‘Globalisationishavinganegativeimpactontheworld’.
[4points]4)Highlighttwoareasinthetextthatyouquestion,disagreewithorlackevidence
[2points]
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CriticalthinkingQuestions1)What’sthestanceoftheauthor?Doeshethinkthatglobalizationgoodorbad?Highlightwhere?Why?Verydescriptivetexthighlightingthekeyareasofglobalization.BUTtheauthorsstressmoreneedstobedonetomakeitfairerfordevelopingcountries.[2points]2)Isthisacrediblearticle?Yes/no–why?Yes,goodsourcechoice.Butwhoistheauthor?Notpublishedorsupportedbyajournalpublication.Probablyagoodideatousethekeysources[2points]3)Highlightfourkeypartsofinformationinthetextyouwoulduseforanessayon‘Globalisationishavinganegativeimpactontheworld’.• Thegrowinggapsbetweenrichandpoorcountries• thepoorestquarterexperiencedlessthanathree-foldincrease(Harrison&Cavendish,2014)• Alargernumberofdevelopingcountrieshavemadeonlyslowprogressorhavelostground.• PercapitaincomesinAfricahavedeclinedrelativetotheindustrialcountriesandinsome
countrieshavedeclinedinabsoluteterms(IMF,2017).• Africapursuedinward-lookingpolicies(suchasprotectionismandstate-ownedcompanies),their
economiesstagnatedordeclined,povertyincreasedandhighinflation(Kobayashi-Hillary,2008)• Africa,=externaldevelopmentssuchaswar&naturaldisasters,whichmadetheproblems
worse.• Asia’snewlyindustrialisedeconomieshavedonewell,whileAfricaasawholehasdonepoorly.• Whatcountriesexportisalsoimportant.• Theshareofprimarygoodsinworldexportssuchasfoodandrawmaterials,mostofwhichare
oftenproducedbythepoorestcountrieshasdeclined.• Nocountry,leastofallthepoorest,canaffordtoremainisolatedfromtheworldeconomy
[4points]4)Highlighttwoareasinthetextthatyouquestion,disagreewithorlackevidence• Today’sglobalmarketsoffergreateropportunityforpeopletotapintomoreandlargermarkets
aroundtheworld,whichmeanstheycanhaveaccesstomorecapital,technology,cheaperimports,andlargerexportmarkets–butdothey?Brexit?Ismoredebtagoodthing?
• Asia,percapitaincomesmovingrapidlytowardslevelsintheindustrialcountries-notallofAsia?
• Outward-lookingpolicies–isitjustthewestbenefiting?Canpoorercountriesimplementthese?• AresomeAfricanstatestoocorrupttodealwith?Warandnaturaldisastersareaproblem?• foodandrawmaterials,mostofwhichareoftenproducedbythepoorestcountrieshasdeclined
–Whyarepoorestcountriesdoingbadlyifexportsarethekey?• movementofpeople–ismigrationgettingtoomuchforsomeEuropeancountriesnow?• Ahighlyvaluableresourceforthedeveloping–isthishelping?• Theinternationalcommunityshouldtrybyreinforcingtheinternationalfinancialsystem,through
trade.Whatisbeingdone?• Whatabouttherealnegatives?Environmentaldestruction/pollution/lossofculture/slave
labour/exploitation/unfairtradedeals/Americanisation/Notdiscussed[2points]