Balance Of Payments, Inflation And Exchange Rate Free Sample


Government economic policies have been known in the world over to take shapes depending on the economic situation at the given times. Major drivers of shifts in economic policies include the desire to control high rates of inflation, control levels of exchange rates and ensure stability of currency. The purpose of this economic essay is to analyze aspects of government economic policies in regard to balance of payments, inflation and exchange rate and explore a variety of issues that pertains to the above three aspects.

Balance of payments

Balance of payments in this context refers to a collection of UK government’s economic activities with other countries. McCombie and Thirlwall (1994) present a broad definition in stating that “balance of payments is the measurement of a country’s economic transactions with the rest of the world.” It consists of three components that include the current account, the capital account, and the overall account. The country comes to a state of external equilibrium in a situation the balance of payments is at a sustainable level.

Balance of payments may not necessarily be bad for the economy. “If a country is importing a high volume of goods and services, balance of payments acts as a short-term boost to living standards since it allows consumers to buy a higher level of household durables and other items” (Olumuyiwa, Jagdish & Alexander,1994). Whereas a number of economic policies may be instituted to address the problem of a balance of payments deficit, a number of factors must be considered. These include size of the deficit, how long it has lasted and factors that have caused it. This is because the capacity to reduce payments deficits depend on what has caused it. Payments deficits precipitated by a high trade deficit is an excessive level of aggregate demand may not demand swift policies in that it may improve automatically in the event of an economic recession. This is because of the slowing down of the real incomes and spending. Deficit precipitated by supply-side economic weakness require policies that can improve our cost and non-price competitiveness. Economists consider persistent balance of payments deficit to be dangerous for an economy. This is because “it is a symptom of a weakening domestic economy and a lack of international competitiveness – pointers to declining living standards” (Salvatore, 1991).


Inflation may be defined as persistent increase in the general prices of products in the market. Majority of economists consider inflation to be dangerous for an economy because of its effect in the reduction of money value and the falling of money incomes. This will negatively impact on the purchasing power of the citizens. In addition to the above, higher rates of inflation will lead to gaining on the part of borrowers while savers will lose. Last, international competitiveness will wane down because our exports will definitely appear unattractive in the international market. This discourages foreign investors in capital and financial investments because of the uncertainty.

The United Kingdom’s may apply a variety of policies to control the rates of inflation. These policies are divided into three significant areas. These include the fiscal policy, monetary policies and supply side policies. Fiscal policy refers to “a change in the levels of government expenditure and taxation to try to influence economic activity” (Salvatore, 1991). The government can increase its own spending by cutting down taxes and thus injecting a boost of spending in the economy. This will enable it to absorb more resources. Monetary policy on the other hand “is the use of interest rates and money supply changes to manage the overall level of demand in the economy and therefore help achieve the economic objectives” (Salvatore, 1991). Last, the supply-side policies are designed to make aggregate supply (AS) more responsive to changes in national income. A combination with other policies will deliver a competitive economy.

Exchange Rate

According to Salvatore (1991), “this is the price of a currency in terms of the other.” The three types of exchange rate systems include fixed, floating and managed (dirty float). A number of factors that have the capacity to influence the exchange rate include the interest rates, world trade, demand for imports and exports, political factors such general elections and the probable trends of inflation.

The fixed advantages of exchange rate system include a reduction in the uncertainty of all economic agents in the country and a reduction in the speculation in the foreign exchange markets. The fixed disadvantages of exchange rate system is the deflationary effect on the economy that may lead to increase in demand and decrease in employment. In brief, the advantages of exchange rate system include reduced risks in international trade, the introduction of discipline in the economic management and the elimination of destabilizing speculation. The disadvantages on the other had include lack of automatic balance of payment adjustments, the requirement of large holdings of foreign exchange reserves, lack of freedom in the internal policy and unstable fixed rates.


It can be discerned from the above discussions that balance of payments, inflation and exchange rate constitute major drivers in the UK economy just as in other nations. The government has immense powers to influence these policies to remain economically competitive in the international sphere.


McCombie, J. S. L and Thirlwall, A. P. 1994. Economic growth and the balance-of-payments constraint. New York: Palgrave Macmillan.

Olumuyiwa S. A., Jagdish H. and Alexander, B. D. 1994. The balance of payments analysis of developing economies: evidence from Nigeria and Ghana. Lagos: Ashgate Publishing.

Salvatore, D. 1991. National economic policies. London: Greenwood Publishing Group.

Organic Milk Products’ Marketing Strategy

In order to succeed in a marketing activities, a marketing strategy is must have. This paper discusses how to go about developing a marketing strategy for organic milk products. It also outlines the target market for the products, a value proposition for the products through differentiation and marketing positioning strategy for the same products.


Marketing refer to the activities and approaches that an entrepreneur or business organization carries out in order to make potential customers aware of their products, persuade them to buy and continue using them. Effective marketing will entail letting people know about your products and services repeatedly. In order to do this in a way that will ensure success, developing a marketing strategy will be the starting point (Amstrong & Kotler, 2009).

Explain the components of a marketing strategy

The first step in developing a marketing strategy for organic milk is by understanding the strengths and weaknesses of the business. When this is done one is able to take advantage of the strengths and downplay the weaknesses. This is done by developing a SWOT analysis where the strengths and weaknesses; opportunities and threats are reviewed. The strengths of organic milk business include: unique product features of being a healthy drink with recommended daily nutrients for all age groups; personal service and flexible service; and quality milk products.

Weaknesses include low employee skills, wide geographical area, and limited financial resources.

Opportunities include anticipated recovery from recession; growth in demand for healthy beverages; use of internet to reach customers in a wide geographical area; high demand for organic products and government policy of increasing agricultural land devoted to organic farming.

Threats include increased competition, regular milk provide an attractive alternative and lack of sufficient supply of raw milk.

The second step is market segmentation. Due to the need to identify the market in which to concentrate in, this stage is important to every business. It allows focusing the limited marketing resources to potential customers. This involves identifying the needs of particular groups of the market for organic milk through research. After they are identified, the marketing activities will focus on addressing them more successfully than my competitors. In this stage the strength of the business in production of high quality unique milk products that will match the needs for the same for particular group.

The third step is writing a marketing plan, which will entail writing down the already made decisions and research done above. This helps to lay down the actions needed to achieve the things outlined in the strategy and allocate resources for the same in order to achieve the business goals. The marketing plan formulates objectives which are SMART (specific, measurable, achievable, realistic and time-based).

Fourth step is making a decision on approaches to reach the market. This entails choosing the channels to reach the market, which will be through health food stores, supermarket chains, natural foods supermarkets, convectional supermarkets, superstores, super centers and independent coffee stores. The choices made here affect the communication approaches we use to create awareness of the product. The communication channels for organic milk will include advertising in the media, online, point of sale and use of social networking sites such as facebook. These are dictated by the target groups for the milk (Dimitri & Venezia, 2007).

The last step is measuring and refining the progress. This involves tracking the effectiveness of the marketing strategy in order to review the performance and learn from it. This will be done through various mechanisms. One of these will be asking every new customer the business acquires how they learnt about organic milk brands and asking them to rate the product. Another way will be conducting a marketing research on organic milk in general and carrying out anonymous online surveys in websites such as (Amstrong & Kotler, 2009).

The Target Market

The target market for this range of organic products is as follows:

  • Children (4-8 years)

These are young and very active and therefore require a lot of energy which is found in this range of organic milk products.

  • Children (9-18 years)

These also are very active and require energy. Organic milk contains daily requirements for calcium which this age group requires 800-1300mg per day

  • Adults between 27-49 years

These need a lot of energy, which should be from healthy food products such as organic milk. Most work from their desks which require less movement and therefore a healthy and safe drink is appropriate such that they will not gain unnecessary weight. Contain high Conjugated Linokeic Acids which contain good fats associated with reduced heart diseases. These will be college or post college graduates with middle level income of at least $70,000 per annum (Dimitri & Venezia, 2007).

Value Proposition with Differentiation

ABC Foods process various food items derived from organic milk under the label of Azure Organic brand. These include packed plain milk preserved through UHT treatment. There are also the Azure Yoghurt brands of organic strawberry, chocolate and tropical fruits. Azure Cheese is another product that is produced by ABC foods. There is also the Azure Butter and Azure Spreads, Which are made and preserved without use of any chemicals (Havaldar, 2005).

Market positioning

This entails choosing how target consumers see ABC Foods and Azure Organic brands. ABC foods will use consumer benefits concept where the Azure brands will be promoted and priced on the basis of the benefits they offer to target market that is high quality products with medium prices that are affordable to majority of the majority of the population (Havaldar, 2005).


Effective marketing will entail letting people know about your products and services repeatedly which can be done with the aid of a marketing strategy. This helps to outline the target market, value proposition with differentiation and choose a market positioning strategy.


Amstrong, G., Kotler, P. (2009). Marketting: An Introduction. Upper Saddle River. Prentice Hall.

Dimitri, C & Venezia, K. M. (2007). Retail and Consumer Aspects of the Organic Milk Market. USDA. Web.

Havaldar, K. K. (2005). Industrial Marketing. Tata McGraw-Hill Publishing Company Ltd. Web.

Classroom Management Case Study

Classroom management is a phrase used to illustrate the process of making sure that classroom activities go on as planned and that the students undertake the activities relegated to them without any disruptive behavior. It involves all the activities undertaken by a teacher or any educational instructor to ensure the prevention of disruptive behavior in the students left in their charge. According to Tauber in his 2007 book Classroom management: sound theory and effective practice, the management of the behaviors of students in a classroom setting is the most difficult aspect of teaching especially in cases where the students have a negative attitude towards learning (Tauber, 2007). A survey conducted of graduates from several education schools and colleges shows that the number one area that concerns most educators is their feelings of inadequacy towards the management of their students in class. In spite of the clinical experiences of teachers in their field of work, the inadequacy of classroom management still persists.

There is no magical elixir that will help solve this decade’s long problem. According to Canter, it becomes increasingly harder for a teacher to regain control of a classroom once the students have discovered the loss of it (Canter, 2005). This eventually results in decreased classroom engagement and poor academic grades for the students as the teacher struggles to regain the lost control. Only professional responsibility, consistency, courage, diligence, experience, and general “common sense” are paramount to the acquisition of these skills. It is important that educators understand better the psychological and developmental levels of the students that are left in their charge and realize that they cannot handle the students equally. Effective classroom management is developed by encouraging students to give regular responses on discussion issues and not being afraid to acknowledge mistakes. Sadly, most teachers are not ready to do this.

From the point of view of the students, and effective classroom manager is one who involves them in the learning and gives a clear statement of behavioral and educational prospects. A student will behave properly in a classroom if there is motivation to learn, the teacher treats him/her with respect, and is able to maintain discipline. From the perspective of affirmation teaching, students respond better to classroom activities when their teacher is keen on guiding them towards success by helping them realize how their efforts will be rewarded. This perspective is based on making the students realize that their success will come from their own efforts (Canter, 2005).

Consider a situation where a student repeatedly interrupts the classroom by incessantly talking during the lecture. On noticing this, the student responds by making hostile comments directed towards the other students and sometimes aggressively takes over the lectures by taking over the class discussion. As the case escalates, the student offensively uses a cell phone in the middle of a lecture and goes ahead to talk audibly interrupting the concentration of the other students. The other students are at first angered by these actions but as it continues with no reproach, come to accept and eventually, start picking up the insolence.

Disruptive behavior is detrimental to the academic excellence of both the students and the educators involved since it will interfere with the student’s ability to learn, hinder the teacher’s ability to teach, redirect institutional resources away from the educational mission, and may lead to significant social or psychological suffering on the disruptive student. To avoid this, the teacher should clarify basic behavioral expectations and standards that are expected in the classroom, how they are going to be implemented, and any disciplinary actions and consequences that will result in the infringement of these standards. It is important to be clear on these expectations and to be unswerving in ensuring their enforcement. Courage is required here as the teacher cannot keep on changing his/her mind each time a difficult situation arises (Canter, 2005).

Students look at adults as their role models. If the teacher is not a person they would not want to be, then they most likely will not give them respect. It is important that teachers serve as role models to the students while maintaining a sense of mutual respect in their interactions (Tauber, 2007). If the students realize that the teacher is dependable and respects them, then they will most likely respect the teacher back and refrain from disruptive behaviors.

It is also important not to take disruptive behavior as a personal insult and react heatedly. However much the behavior might be irritating, it is important to establish a dialogue with the student(s) involved instead of jumping into heated arguments in front of the entire class as this would most likely lead to loss of respect and control. In most situations, it is normally one student who starts the disruptive behaviors while others watch and listen to the teacher’s reaction (Canter, 2005). Thus, it is important to nip the disruptiveness in the bud, before it becomes unmanageable. Focus on the entire class first rather than going for the particular student. This will quell any disruptive thoughts that might have come up. However, if the disruptive behavior goes on, the teacher should ask the disruptive student to stop and call for a private session with them after the class. During this meeting, the teacher should remain calm, in control of the discussion, and focus on areas of agreement between them. A resolution and expectations for the future should be found detailing the actions to be taken if further disruptive behavior is continued.

Disruptive behavior comes about when students feel that their teachers are not in control of the classroom. This control comes from the respect that the students have for their teacher and which has to be earned, not demanded. Though the methodologies of establishing effective classroom management remain a matter of fervent debate among educators, the approaches taken depend on the teacher’s values apropos to educational psychology and the response of the students to the approach chosen.


Canter, L. (2005). Classroom Management for Academic Success. Indiana, IN: Solution Tree.

Tauber, R.T (2007). Classroom management: sound theory and effective practice. New York, NY: McGraw-Hill/Irwin Publishing Co.

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