Question

1. Definitions: Briefly explain the following terms:

(a) The Plaza Accord

(b) Utopian socialism

(c) Socialist calculation debate

2. Investment: Why has investment been very high in East Asian Economies? When answering the question, relate to concepts such as savings, consumption, taxation, etc.

Answer 1

1. a.) The Plaza Accord or Plaza Agreement was an agreement between the governments of France, West Germany, Japan, the United States, and the United Kingdom, to depreciate the U.S. dollar in relation to the Japanese yenand German Deutsche Mark by intervening in currency markets. The five governments signed the accord on September 22, 1985 at the Plaza Hotel in New York City. Baesd of the location of agreement,it was called The Plaza Accord.

Devaluing the dollar made U.S exports cheaper which led to sales.of more american goods and services.

b.) Utopian socialism is achieved by the moral persuasion of capitalists to surrender the means of production peacefully to the people. It advocated on science of social organization.

It was defined by the first currents of modern socialist thought as exemplified by the work of Henri de Saint-Simon, Charles Fourier, Étienne Cabet and Robert Owen.

c.) The socialist calculation debate (also known as the economic calculation debate) was a discourse on the subject of how a socialist economy would perform economic calculation given the absence of the law of value, money, financial prices for capital goods, and private ownership of the means of production.It was a debate concerned the role and scope of the law of value in a socialist economy.

It took off when proponents of laissez-faire argued that markets could allocate resources "better" or at least "no worse" than an even infinitely wise government could.

2. Domestic savings and investment in the high-performance East Asian economies is significantly higher than in other economies.

As East Asian Economies generate high rates of saving and used the resources productively. The high rates of saving reflect high rates of both private saving and public sector saving.Taxation is relatively low from among other countries. East Asian Economies provide tax incentives like tax holidays, special economic zones,free zones etc for boosting the investment in their economies.The consumption is also higher compared to other countries because more percentage which strive for higher economic growth.The high domestic consumption also strives for more.investment.