Saturday, August 11, 2012

7. What is the used procedure of export from Bangladesh & import to Bangladesh? Also document required for this purpose?

Answer:  Export Procedures:
                           i.          A trade license has to be obtained.
                         ii.          Entrepreneur should register his firm in the Office of the Chief Controller of Import and Export (CCI&E).
                       iii.          The CCI&E issues export Registration Certificates (ERC) to the exporters. Take Export Permit from CCI&E.
                       iv.          Company or producer has to affiliate with a chamber of Commerce or a registered sector association.
                        v.          An export number per shipment is to be obtained from the Bangladesh Export Promotion Bureau (EPB).
Document Required for Export:
                          i.          Bill of landing
                        ii.          Certificate of origin
                      iii.          Commercial invoice
                      iv.          Customs export declaration with export number
                        v.          Packing list
                      vi.          Pre-shipment inspections clean report of findings

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Wednesday, August 08, 2012

How to calculate national income

For calculating National income, these step and thinking must be followed ----------
We know, there are three method to calculate national income
Expenditure method
Income method
Output/value added method
In these three methods, we see the difference only in calculating GDP. The next steps are quite same on all those method.
In expenditure method,
GDP (at market price) =personal consumption expenditure + gross domestic private investment + Govt. purchase of goods & services. = C+I+G
GNP (at factor cost) =C+I+G+(X-M)-Indirect business tax+ Subsidies
C= Expenditure on final goods and services- second hand goods- Expenditure on illegal goods + Commission spent on buying a second-hand goods.
I= Net domestic fixed capital formation (Expenditure on purchasing land, factories, flats, office, machinery, commission, legal charges) + depreciation + Change in stock
G= Housing allowance of civil servants + Medical allowance of civil servants + Expenditure on building new airport - Transfer Payment/Public Assistance
X - M = Domestic Exports of goods + Re-exports of goods + Exports of Services - Imports of Goods - Imports of Services.

national income accounting

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Friday, August 03, 2012

Distinguish between: National Income at Market Price and at Factor Price.

National income at market prices refers to a value of output and expenditure that has not been adjusted to account for indirect taxes and subsidies. Therefore, Net national product (NNP) or NI at market price= GNP- Depreciation.
•This adjustment is necessary if accurate estimates of the income paid to factors are desired.
•Deducting that part of expenditure paid in taxes, and adding on any subsidies received by firms, leaves us with national income at factor cost.

NI at factor cost=NI at market prices or NNP-Indirect taxes + Subsidies

In theory, no government intervention,
Let’s take example that local Production of cigarettes $ 80,
So here,
Market value = factor income = total cost = total value-added =$80
But if there is indirect tax or subsidies, Market value ≠ total value-added (Factor cost)
Example 1:
Market price of cigarettes = $ 80
Indirect business tax = $4
So, NI at market price = $ 84
      NI at factor cost = $ 84 - 4 =$ 80 = total value-added

Example 2:
Education in university
Total value-added in university =$140
Subsidy = $20
School fee = $120
So, NI at market price = $120
      NI at factor cost = $120 + $20 = $140 = total value-added.

Market worth = issue income = total price = total value-added =$80
But if there's indirect tax or subsidies, Market worth ≠ total value-added (Factor cost)
Example 1:
Market worth of cigarettes = $ eighty
Indirect business tax = $ four
So, NI at market worth = $ eighty four
      NI at issue price = $ eighty four - four = $ eighty = total value-added

Example 2:
Education in university
Total value-added in university =$140
Subsidy = $20
School fee = $120
So, NI at market worth = $120
      NI at issue price = $120 + $20 = $140 = total value-added.

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Tuesday, July 31, 2012

What is the impact of interest rate on investment?

Overall, businesses invest less when interest rates increase, because the value of borrowing cash will increase. Much business investment is funded wholly or partially by credit. Moreover, a rise in interest rates means companies usually have to devote more resources to paying interest on their existing debts, which lowers the quantity offered for investment. This is often a serious reason why the stock market tends to say no on news of rate will increase -- lower investment equals lower potential growth for businesses in the near future.

As for the British Pound, it depends on whose rates we tend to are talking regarding. In general, when a rustic raises the interest rate for its currency, we'd expect that currency to achieve in price relative to alternative currencies. This is often because a rise during a currency's interest rate makes it more valuable to hold as an investment, attributable to the upper rates that banks pay on deposits, borrowers pay on bonds/loans, etc. When the currency becomes more valuable, demand for it ought to increase, and thus its price (price) ought to go up. In real life, these relationships aren't thus clear cut; values usually do shift in response to interest rate changes, however the value shifts usually lag behind the rate changes (sometimes for many years), and alternative complicating factors can 'distort' the value that we'd expect purely from interest rate effects

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Whether or not inflation is always bad? Justify your answer

Inflation isn't an unmixed blessing. It’s both sensible & bad result.

The goods effects are:

• People with versatile income (producers, traders etc.) sometimes gain.

• The entrepreneurs earn higher profit.

• Debtors are gainer.

• New employment opportunity rise.

• Purchasing power rises

• Unemployment reduces.

Bad effects of inflation are:

• People with fixed income lose.

• Creditors losers

• Inflation encourages, hoarding & develops a synthetic scarcity of in the market.

• Declining price of cash in inflation makes some folks careless in spending.

From the above discussion it is proved that though inflation has some bad result but it stimulates economic growth & creates employment opportunity, raises purchasing power. We should keep inflation in tolerable position to promote economic growth and living standard. Therefore inflation isn't always bad.

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