ESSAY QUESTION:

1. Please explain why agglomeration cost will increase that not support well to the firms. Firms then
want to move to another location for investment?

- Agglomeration cost refers to the clustering of productive activities and people for mutual
advantage. In diseconomies such as higher rents or wage resulting from competition for
these resources may also occur

(chi phí kết tụ đề cập đến việc tập hợp các hoạt động sản xuất và con người để cùng có lợi. Trong các
vấn đề kinh tế, chẳng hạn như giá thuê hoặc tiền lương cao hơn do cạnh tranh về các nguồn lực này
cũng có thể xảy ra)

Agglomeration cost is mostly in big cities because they have many opportunities for economic
development.

The disadvantages of agglutination should be mentioned. Strong environmental pressure will increase
environmental pollution. High rental rates for land and housing, bottlenecks in public goods (eg poor /
overloaded infrastructure). Competitive pressure between companies increases because of similarities
between product properties. There is not much space to build a warehouse or stock company as land is
scarce. Economic imbalance because of congestion. The accumulation can also lead to adverse effects
such as traffic congestion, pollution and other negative external effects due to the gathering of a group of
companies and citizens, and this can lead to a disadvantage of scale. Cost accumulation is volatile as we
perceive higher customer crowding and increased waiting times. In addition, may be observed in sectors
or industries characterized by limited access to facilities or related resources. For example, you trade in
clothes, but there are no stores selling raw materials such as leather, fabric, and dye nearby. As
discussed above, these factors reduce the pricing power of firms due to the large number of competitors
in the region as well as a shortage of labor and lack of flexibility between firms for people. labor.
Agglomeration has also been shown to increase inequality both within urban areas and between urban
and rural areas. This results in distorted rent seeking. Ultimately, the government will impose policies that
make it difficult for businesses to redistribute benefits to companies affected by this accumulation. They
solved the problem by proposing a tax calculated by combining high income and urban location, which
could then be redistributed to companies that were hit hard by the accumulation.
 2. How economic organization and spatial changes affect the changes of Demographic, Political,
Cultural, Social and Technological?

In developing countries, labor productivity is skyrocketing, integration into global markets is increasingly
strong, economic policies are effective while sectors such as health and education are improving. drive
growth as well as create vast investment opportunities. They have a strategic location like Vietnam, open
to foreign investment, a growing population, young demographics, and low labor costs.

Demographics change: This leads to people moving from the countryside to the city to work. Students
from the hometown to the city study. For example, the National University of Ho Chi Minh City has a lot of
students from other provinces and regions to study. The reason is that the global economy changes, big
cities like HCM will have many opportunities to access learning with high technology, rich knowledge and
thriving economies.

- Political change: The Government (Government) adjusts policies to attract investment and support
businesses. To promote start-ups or foreign investment policy (Sam Sung, Coca Cola, ..), the government
has interest rates on central bank loans. Government adjusts environmental policies, when there is a shift
in space and the environment is vulnerable, it is necessary to have environmental and resource protection
laws to avoid polluting destructive business activities. Labor: Protect employees by adjusting employees
'wages, rights and obligations, and controlling employees' wages and salaries policy.

Cultural changes: Western style: open-minded personality, small family. Gradually, young couples also
follow this trend, such as separating in an apartment, giving birth late, having few children to focus on
personal and work. Foreign companies entering Vietnam also bring new styles and habits. For example, a
Japanese manager will influence the office culture of a foreign company in Vietnam, greetings and
punctual habits, .... Development online shopping, major electronic platforms: Tiki, Shoppee, Lazada, ...
have remarkable sales.

- Social change: Lifestyle: Technology 4.0 uses the internet more in work and everyday life due to the
development of US social media companies such as FB, GG, Twitter. No more letters by post but by text
message. Change your research habits through books but use online search.

- Technology change: Develop advanced technology to use technology in any industrial company. EX:
Bank convert currency system, pay for purchases by QR code, Book online hospital tickets, Study at
school by online form, transportation services such as Gojek, Grab ,. ..
 3. Why women become more important in developing country?

Women today clearly understand the balance between work and traditional women's roles in taking care
of family and children. They raise their children to grow up, serve as the emotional support for their
children, educate them on moral qualities and personality so that they can grow up to be human. Teach
your child each sentence and gestures and activities in the activity. When the children are grown up, the
mother teaches the children moral behaviors, how to behave according to social standards. The schooling
of children is largely concerned mother. They create good quality citizens that are the foundation of
building a good society.

Women are the second pillars of the family with their husbands sharing economic responsibilities and
organizing material lives for the family. Women directly work in production to create material wealth,
contribute to poverty reduction, improve family income, and enrich the family and society. It is not
uncommon for women to fully immerse themselves in the hyper-connected world. As the world becomes
more interdependent, the intervention of women is required. Women have the capacity to absorb change
and cope with long-term challenges. This is a quality that comes from the natural abilities of women. They
capture information quickly, which in turn leads to beneficial work.

4. Why developing country easily fall into debt trap?

The first reason is that the economic development strategy is not strong enough and there are many
shortcomings, so the government using the wrong amount of capital in those strategies is wasteful and
unable to pay back. Obviously, the effectiveness of the loan or the plan is not maximized in times of
economic volatility, for example, when large projects go on strike due to poor quality, many errors in
construction lead to waste and continue to lack capital.

The second reason is due to corruption in the government, prolonged budget deficit and no one is
responsible. This shows how public debt problem is often even numbers, rarely see odd numbers and
always settlement estimates differences. The problem is that developing countries do not closely monitor
public debt numbers. Even violating related laws such as the Budget law, allowing public debt to exceed
development investment.

The third reason is due to natural disasters, the countries at the top of the list of countries most affected
by climate change are developing countries, they suffer a lot of losses in both life and property. Expenses
for health care and infrastructure recovery have increased, the budget deficit has led to debt borrowing.

The last reason is that there is a change in the world currency, which causes the value of goods sold to
change, sometimes increase, sometimes decrease. The monetary unit in these countries is quite different
from the creditor country, which is detrimental to commodity production and exports, the income of the
person is gradually not high and when the GDP is low, it shows that currency changes also could be
inflation.
5. Why don’t we use “ growth” instead of “ develop” for country?

Both of the above are closely related and when using growth, we talk about GNP, GDP, and
develop is about HPI (explain GNP: GNP (stands for Gross National Product in English). Gross
national output or Gross National Product is an economic indicator of a country's economic
development that is calculated as the sum of the monetary value of the final products and
services that its citizens The country works in a certain period of time, usually a fiscal year,
regardless of where they are made (at home or abroad)., GDP: GDP (stands for Gross Domestic
Product) is the market value of all final goods and services produced within a certain territory
(usually a country) for a given period (usually a year)., HPI: Planetary happiness index, This index
shows the relationship between longevity, comfort, and behaviors that impact the environment). If
the country only focuses on growth, it focuses on economic activities and does not care about
develop, which is education, health, community service, then people in the country will not have
knowledge and health. guaranteed. develop focuses on people such as education, health,
nurturing, which underestimate economic growth, the gwoth necessary for wealth to keep pace
with foreign countries and innovations. The conclusion is that a developed country must have
both growth and develop.

6. Why develop coutries can control HIV/AIDS?

For the developed countries they have the funds and the money to support their people. The
government has a good regime of control and propaganda on non-infection. People do not spend
much money on testing, they are willing to go to the hospital to check. Their people are checked
monthly or annually without having to pay for that examination. So, their people can recognize the
stage of the disease's development for treatment.

7. What happened if the poor countries cannot return money to the dominate countries:
The economy falls into a serious crisis and depends on the ruling country, possibly losing political
power if serious
The defaults, of course, have many consequences, too, especially if the default occurs suddenly
and chaos. Predicting the fall in the price of the local currency, domestic investors and people will
flock to the bank to withdraw all the money in their accounts to transfer abroad. To avoid this, the
government will have to close banks and control cash flow measures.

To punish a country that defaults, capital markets impose punitive interest rates, or refuse loans
outright. Particularly, credit rating agencies will certainly warn investors not to pour more money
into the defaulting country.

There are countries where they have to mortgage their own land assets to creditors. China, for
example, won the right to operate for 99 years at the port of Hambantota in southern Sri Lanka
after the cost of the project went out of control, forcing Sri Lanka to relinquish control of the port.
to have a rescue package from China ”. It is no longer new for China to give other countries
options other than to pay if these countries cannot afford to repay them. In 2011, the news said
that China had cleared up its debt to Tajikistan in exchange for 1,156km2 territory in the disputed
area between the two countries.
 WRITING

1. Please explain why the economic organizations (foreign companies/global firms) invest their
economic activities in one country; they cause many changes of technology, politics, culture and
society, demography, and environment in different scales of global, regional, and local? Give
examples.

2. In the Least-cost Theory of Alfred Weber, Please explain in the agglomeration economy, why at
the first stage (the economics of scale) the agglomeration costs are lower and support well to
economy, but later in the second stage (the dis-economies of scale) the agglomeration costs
increase and impacts the economy

At the beginning of the process, when companies form clusters of economic activities, profits are
increased. This is a major contributor to the growth of cities. Accumulated economies exist when
production is cheaper due to aggregation of economic activity. The result of this clustering is that
it is possible to establish other businesses that can take advantage of these economies without
joining any large organizations. This process can also help urbanize areas. Benefits arise from
the accumulation in the space of physical capital, companies, consumers and workers: Low
transportation costs, a great market, a large supply of labor due to the concentration of labor. In
one place and thus, labor supply and demand opportunities increase, reducing the cost of finding
manpower. The accumulation of knowledge and human capital leads to the spread of knowledge
among firms.

In the future difficulties will begin to appear …. Câu 1