Hi Aspirant

Mr Glotynn summarizes it very well. Let me expand it a little further.

An economy system is dependent on demand and supply, and as Glot puts it, the levels of international reserves (trade surpluses and purchases of foreign currencies) and gold reserves are the important determinants for the amount of currency to be issued by a country.

Many think that the fundamental of economics is all about money. To a certain extent it does and it is true. Economics has a lot to do with money; with how much money people are paid; how much they spend; what it costs to buy various items; how much money firms earn etc; and most of all, how much money is there in the TOTAL Economy.

However, economics is more than just the study of money despite the large number of areas in which our lives are concerned with. In brief, it concerns the following : -

- the production of goods and services
- how much the economy produces in total
- what particular combinations of goods and services
- how much each manufacturer produces
- what techniques of production they use
- how many people they employ
- the consumption of goods and services
- how much the population as a whole spends (including how much it saves)
- what is the pattern of consumption in the economy
- how much are bought of on particular items
- what particular individuals choose to buy
- how consumption is affected by prices, advertising, fashion and other factors ... and so on.

Now what has just been said is not quite to the bottom of what economics is all about. The crucial ingredient for a problem to be economic is that of the integral part of your question … the word “scarcity”, which is one central problem faced by all individuals and all societies. And from this problem stems all other facets of economic problems. This problem of scarcity does not only apply to third world countries, but also to countries such as the USA, Britain, Germany, France and Japan.

Scarcity has a very specific definition. Whether you are rich or poor, the answer to ‘do you like more money?’, is always a ‘yes’. The point here is human needs are unlimited; yet the means of fulfilling human needs are limited. This is so because the world has a limited amount of resources that are often called the factors of production, categorized into labor, raw materials and capital. Thus, scarcity is defined as the excess of human needs as opposed to what can actually be produced. Of course we all do not face the problem of scarcity to the same degree, as one of the major issues in economics is the uneven distribution of wealth.

Conversely, when a country’s economy is growing rapidly, its central bank will buy up foreign currency in order to contain pressures that might ignite inflation as foreign money floods into the country amid an export boom.

International reserves are a country’s foreign currency deposits, gold and Special Drawing Rights (SDRs). These reserve positions held by central banks and monetary authorities are assets of the central banks which are held in different reserve currencies such as the dollar, euro and yen, and which are used to back its liabilities such as the local currency issued, and the various bank reserves deposited with the central bank, by the government or financial institutions.

Dear Aspirant, there are more to these than what has been written above regarding the issuance of currencies of a country. When you embark on your major in economics, your professors and lecturers will be able to give you a clearer picture on how the currency system works. That much I can help you for now.

Have a Happy Vesak Day!

Cheers.

Mr Glotynn & Mr Geoette

Thank you for the lessons.

Best regards.

Hello aspirant :
Do you like math? bo bo geo posted a math question in the forum. Maybe you could have a try!!

To aspirant:
Here is the link of that math question from bo bo geo:
http://okenglish.tw/modules/newbb/viewtopic.php?topic_id=1768&forum=11

Dear 123

I have read that Matrix Arithmetic II (even rows) by Mr Geoette.


Sad to say, I am rather weak in mathematics and almost flunk statistics.

For the time being, I haven't the slightest clue on how to solve it.

Thanks for bringing the subject to my attention.

Best regards.

Hi Aspirant

Miss Futari has solved the riddle.

There's a third solution. Perhaps you want to make an attempt.

Cheers.

Dear Mr Glotynn

I am so delighted with this piece of news that I can't wait to share my joy with you and Mr Geoette.

I have been admitted to The University of Chicago! Here is an excerpt of the Letter of Admittance by the Office of College Admissions.

... I am pleased to inform you that you have been admitted to the University of Chicago, Class of 2011. Congratulations! You should be proud of the accomplishments and promise that led to your selection.

We feel a particularly strong responsibility to admit students who are not only qualified but who are ready to continue the crucial business of educating themselves. You have been selected by our faculty and admissions counselors because you recognize the pleasure - the absolute joy - to be found in active, creative learning. Our decision was not based on numbers but on your achievements and words, a difficult determination to make but one that gives proper honor to the University and you.

You have the chance to be part of a schcool with a glorious history and an exciting present. We look to you to help us grow, to grow with us, and to be part of a tradition that elevates us all.

Yours truly

Theodore A. O'Neill
Dean of Admissions ...

Many thanks for your help, Mr Glotynn, Sir.

Wow, it's amazing, Aspirant. Congratulations!

The University of Chicago is listed in the 9th place of "America's Best Colleges 2007" and the 10th place of "Top 10 Universities Worldwide".

http://www.usnews.com/usnews/edu/college/rankings/brief/t1natudoc_brief.php
http://www.learn4good.com/top10/universities.htm

I beleive everyone here is proudly sharing the glory and happiness out of your wonderful achievement.

Hi Aspirant

Congratulations! You have done proud.

Do have an interesting and exciting campus life. Tell us about it when you are there. With enough credits, will you return with a master degree four years from now?

With all good wishes.

Dear Mr Glotynn & Mr Geoette, Sirs

First of all, I would like to thank you for those encouraging words. To me, the selection is a rare offer and I am honored by the recognition that my academic record matches the challenges of such an elite university. Yes, I am proud to be a part of the University of Chicago that has such notable achievements which leaves me to ponder on how to face those challenges ahead. I might (if the both of you and those other professionals here are willing) seek further help in studies on topics of economics, statistics and mathematics. My academic year will begin in September 2007; hence I will still have a little space to pose some questions and receive expert advices from professionals of this website here, to prepare myself for some expected rough passages ahead. Thank you again gentlemen.

Best regards.

Dear Mr Geoette

My heartiest congratulations to you for having such an outstanding offspring. Do you mind telling me what did your son pursue at Stanford? God willing, maybe I can learn from him.

I have another question in economics that needs help. Can Mr Glotynn and your good self render assistance please? Mr Glotynn once said that he is a merchant engaging in International Trade. Perhaps he can answer this question best.

Thank you again gentlemen.

Without international trade we would all be much poorer. There would be some commodities and merchandizes that we would simply have to go without. There would also be some items that could be produced at sub-standard qualities and inefficiently.

Explain why international trade has the potential to benefit all participating countries. Your answer should place emphasis on the following:-

a. Free Trade
b. The Law of Comparative Advantage
c. The Advantages and Disadvantages of Trade
d. Arguments on Trade Restrictions, and
e. Other pertinent factors that may help you to examine International Trade as a whole.

NB : Your word game is really fascinating. It takes a person with strong vocab to play this game well. It is no wonder that there are so much talented people here.