A bird in the hand is worth two in the bush

What is time value of money? Discuss how the expression “a bird in the hand is worth two in the bush” relate to the concept of the time value of money?

What is time value of money?

TVM (or Time Value of Money) is a concept that states that the money you have right now is more valuable than if you acquired the same amount of money in the future. Therefore, the faster you obtain the money, the more valuable it is. As soon as you can use the current money to gain some interest in the future, such money is preferable for investors because it makes the investment opportunity available (Corporate Finance Institute, 2019).

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Financial planning

Define the financial planning process. List the elements of a good financial plan. Identify and discuss the three most important personal factors and the three most important economic factors that affect your financial planning decisions.

        According to Siegal, R. and Yacht, C. (2009), a financial planning process is a process of determining goals, analyzing situations, making decisions, evaluating them, etc. I would say that for me it is a process of creating a plan which shows you how you will achieve the desired result: what choices you need to make, whether they are good enough, and what decisions will bring you there.

        There are several factors that affect people’s financial planning decisions; while some of them are common for everyone, the other ones depend on different circumstances and depend on situations. However, all good financial plans have similar elements, such as financial goals, net worth statements, budget and cash flow planning, debt management plan, retirement plan, emergency funds, insurance coverage, and estate plan (Schwab, 2021).

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Technology and Globalization

Do you agree that technology and globalization increase the chance of inequality? If yes, state your reasons why. If no, also state your reasons why. Take a minute to think about how technology and globalization have impacted your region. Write some reflections and share them.

          I agree that technology and globalization increase the chance of inequality. First of all, technologies are not given for free. I recall that my first mobile phone cost me around $70 in 2013, and back then it was an expensive purchase: not every kid of my age could afford it. Some people in my neighborhood had only 1 mobile phone used by the whole family. And not even every family had it in my small town.

          During the first week, we learned different theories about how Globalization developed. According to the World-System theory, the most profitable economic activities are concentrated in the core states, while exploiting peripheral and semi-peripheral regions. Therefore, it is not surprising, that in 2013 the situation of mobile phones was quite different in big cities and the capital of my country. And we know that people who have mobile phones and the internet in their hands have much more abilities than those who have not. No wonder technologies in core states had driven the progress and globalization there unequally compared to the other regions.

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M-Pesa in Kenya

Why does the M-Pesa work so well in Kenya? Do you think that such a system could work in your country? Please state your reasons. As mobile phones, Internet access, and tech hubs differ greatly throughout the African continent, how can these key pieces of technology be made not only more accessible to patrons, but more affordable? How can Konza Technology City make a positive impact in Kenya? Are there any pitfalls in this tech city, in your opinion? How can regulating technology improve society?

Why does the M-Pesa work so well in Kenya? Do you think that such a system could work in your country? Please state your reasons.

          Kenya is a developing country, which means that there is still huge room for growth. Many citizens of Kenya had no access to banking before M-Pesa appeared, which is one of the main reasons why it works so well there. According to Ndung’u (2017), this mobile banking system made it possible for everyone to access banking, transfer money, and create virtual savings accounts. Therefore, M-Pesa promoted innovation, and with government support, it was secure enough and reached about 75% of the population. To be honest, I feel that this system was so successful in Kenya because it came there at the right time to provide a service that was highly desired. I live in China, and M-Pesa would not work so well here. First of all, there are already several national banks that allow cardholders to use secure mobile payments. Secondly, China is very strict about all services that work with money, and it is nearly impossible to join this market.

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The Olympics of International Financial Institutions’ Projects

Various projects are handled by international financial institutions (IFI) on a yearly basis. It is your task to give one gold, one silver, and one bronze medal to each chosen project. For each medal you give out, you must state the following: Name and detailed description of the project. Name of the IFI that handled the project. Type of medal (gold, silver, or bronze). Positive impacts and how they could have been even more impactful. Negative impacts and how they could have been avoided.

For this week’s written assignment, we were asked to choose international financial institutions (IFI) and award three medals (gold, silver, and bronze) to three projects that belong to them. It was very difficult to make a choice, as soon as there are dozens of such organizations; however, in the end, I decided to write about three financial institutions from very different parts of our world: Asian Development Bank (ADB), African Development Bank (AfDB), and European Investment Bank (EIB).  All these financial institutions have several very important projects, so it was extremely difficult to opt for a medal. This was the main reason, why I chose a similar topic for all the projects from this written assignment.

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Millenium Development Goals

Review the 8 Millennium Development Goals and suggest some improvements to the goals.  As of this year, how would you list the Millennium Development Goals? Would the list from 1 to 8 stay the same, be switched around, or would some of the goals change completely? Be sure to include your rationale.

          In 2000, the UN signed the United Nations Millennium Declaration that set 8 development goals to achieve by the year 2015. To measure their progress towards these goals, 1990’s indicators were used. The 8 Millennium Goals mainly covered problems of poverty, health, education, and the environment (World Health Organization, 2018).

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Case study (Liberian Plantation Workers Allege Poor Conditions)

How did globalization change some people’s lives? How did the changes lead to a conflict? What was the proposed solution(s) to the conflict? How satisfactory was the solution to each party? Can you imagine a way to avoid or resolve similar conflicts in the future, even if rapid globalization continues? Over the years, in what ways has your region become more globalized? How can you see the results of this today? If you cannot see the result of this today, why?

For this assignment, I have chosen the “Liberian Plantation Workers Allege Poor Conditions” case to discuss as soon as it touched me the most. In 2005, 12 adults and 23 children sued the Firestone company for poor conditions, using child labor, and dumping toxic chemicals into a river (Pier et al., 2014).

Firestone Liberia Inc. came to Liberia in 1926, and now is the largest private employer in this country, which also operates 27 schools, and provides scholarships for higher education (Firestone Liberia, 2019). So, how did globalization change some people’s lives in Liberia? At the first sight, the answer seems obvious: a lot of new workplaces appeared, and workers’ kids got the opportunity to study for free. According to Firestone Liberia’s official website, in 2018 this company was awarded the Golden Image Reward for its high-quality education. Sounds like a life-changing chance that no one should miss! Well, I don’t know about now, but in 2005 things from the inside were not so jolly. It was obvious that Firestone took an advantage of the lack of other opportunities and exploited its workers. The daily quotas were so big that it was impossible to reach them, which caused the necessity for the help of children (Pier et al., 2014). All this led to a conflict, where workers felt like they were in the gulag and sued the corporation, which never admitted that it did anything wrong and claimed that it was very generous and helpful.

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Globalization theories

Various theories on globalization exist. Choose two from the readings and describe each—one you agree with and one you disagree with—briefly describe each theory, and explain your reasons for agreement and disagreement.

          From this week’s reading assignment, we learned that there are three primary theories on globalization explaining how it was provided and developed. They include world-system theory, world polity theory, and world culture theory (Lecher F., 2001). For this assignment, I have chosen to talk about the first two theories. Before we can start discussing which ones I agree or disagree with, let me describe each of them first.

         The world-system theory tells us about the hierarchy of the world and emphasizes that we should analyze the whole system, not some national societies because global power relations have been structuring development and underdevelopment for centuries. Nowadays, this system is based on the division of labor according to geography while still being connected by the world market (Chase-Dunn & Grell-Brisk, 2019).

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Globalization and protectionism: trade barriers

Answer the following questions on globalization and protectionism:

Why does the government create trade barriers if they can potentially hurt a worker in an economy (due to lower wages)?

According to Greenlaw and Shapiro (2018), there are several ways that the government can use to control trade. They include protectionism, import quotas, and nontariff barriers. The problem is that when the country gets rid of trade barriers in some of the areas, it leads to some job loss in the same area. Therefore, the government creates trade barriers in order to protect local employment, to earn more money on tariffs, to improve the trade deficit, and to protect industries that are in their early stages of development.

What can be done to avoid trade barriers?

First of all, governments of different countries can sign free trade agreements. Such agreements are one of the most common ways to avoid trade barriers because they promote seamless trade. Also, the government can also choose to reduce nontariff barriers and rationalize regulations.

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The Poverty Trap

Refer to the Unit 6 Learning Journal Poverty Trap Tables spreadsheet to complete the assignment.

Susan is a single mother with three children. She is a cashier at a food market earning $7.75 per hour and works up to 2,000 hours per year. She is eligible for government benefits, so if she does not earn any income, she will receive a total of $17,050 per year. She can work and still receive government benefits, but for every $1 of income, her government stipend is $1 less. The government has decided to change the benefits policy of every $1 of income earned to reduce the government’s stipend by 60 cents. How will this change Susan’s benefits received? What are her new choices?

To complete the table given, we need to keep in mind, that:

1) The rate of Susan’s income is $7,75 per hour.

2) Government benefits per year if Susan doesn’t work at all are $17,050 per year.

Therefore, if Susan works all 2,000 hours in a year, she will earn: 2,000 * 7,75 = $15,500. The government will add $1,550 in such case to make it $17,050 in total.

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