Sunday 29 May 2011

Economics: money, money supply and money creation

In ancient time, people exchange goods for goods, that’s called barter economy. However, the difficulties faced include:
1)       Difficulty to quantitize its value because the value of a good is subjective, some goods like living things are hard to be divided
2)       High transaction cost, low transacted quantity
3)       Hard to meet double-coincidence of wants, that is, trader A wants trader B’s goods while trader B wants trader A’s goods. Also heterogeneity exist among goods, it may cause disagreement of the exchange.
4)       No standard of deferred payment and low durability: goods depreciates time to time so the value of goods in future is less foreseeable.
Therefore money is invented to fulfill the following features:
1)       As a medium of exchange, money is generally accepted to be exchanged so the problem of double-coincidence of wants is solved. Also it’s usually durable to store value, like gold, silver or coins.
2)       Quantitizing and dividing value in a generally accepted way. Purchasing power of money is more foreseeable so it’s also the standard deferred payment.
3)       Scarce and homogenous so that its purchasing power is steady.
Functions of money:
1)       Medium of exchange: it facilitates exchange and hence lowered the cost of exchange
2)       Unit of account: quantitizing value of goods in money terms.
3)       Store of value since money itself is an asset as well.
4)       Standard of preferred payments.
Forms of money
1)       Commodity money
In ancient time people trade with salt, shells and later precious metal like gold and silver. They are scarce and durable, and their face value is equal to their intrinsic value.
2)       Representative money
It face value is less than intrinsic value but it’s convertible to goods of equal amount of its intrinsic values(they have equal amount of backup of goods), like gold and silver certificates.
3)       Credit/inconvertible money
It’s also known as flat money. They have little face value, no back up  and they exchange value fluctuates under change of price level. Examples like legal tender.
4)       Bank deposit money
-          Demand deposit (current account): write cheques to draw on their deposits with no interest usually. It’s money since it’s generally accepted as exchange medium.
-          Saving deposit: interest is given but people can’t write cheques to draw money from it.
-          Time deposit: people can’t draw the money in a specified period, but the interest rate is higher.
-          Negotiable certificate of deposit is transferable.
5)       Electronic money
It’s money without physical form and zero face value, like money stored in octopus card (not octopus card itself)
Types of banks according to their functions
1)       Commercial banks: usually accept deposit, make loans, facilitate financial trade for public.
2)       Merchant banks are underwriter of shares, arrange large scale loans and manage the funds. Their target customers are usually companies or the government.
3)       Central banks: issuing currency; act as government banker and adviser; supervising authorized institutions; being lender of last resort (lending money to banks at discount rate to prevent bank run, interest rate of loans among banks are called HK Interbank Offered Rate), central clearing house, carrying out monetary policy (controlling MS), keep economy’s foreign exchange reserves and negotiating with foreign monetary institutions.
The banks now days may act as both commercial and merchant banks. Also, there’s no central bank in HK, but HKMA act as the central banks, like issuing $10 legal tender and coins.
Types of banks according to their scale
1)       Licensed banks (LB), which they can use “bank” in their names, can accept all kinds of deposits; the minimum paid-up capital is HK$300 mil, like HSBC.
2)       Restricted licensed banks (RLB) can use the word “restricted license bank” in their names, they can only accept time and certificates of deposit. The minimum amount of deposit of HK$0.5 mil. And the minimum paid-up capital is $100 mil., like China Construction Bank.
3)       Deposit-taking companies (DTC) can only accept time and certificates of deposit of at least HK$0.1 mil and have 3 month of maturity period. The minimum paid-up capital is HK$25 mil.
All banks should have liquidity ratio above 25%.
Liquidity ratio = loans repay in 1 month / deposit due in 1 month, which represents the ratio between assets and liabilities.
Money supply
M0 is defined as the monetary base = legal tender issued = Cp (currency in public circulation) + reserve in banks
M1 is defined based on the money as the medium of exchange. M1 = Cp + Dd (Demand deposit)
M2 is defined based on money as a medium of exchange and store of value, including deposit in LB only. M2 = M1 + Ds (saving deposit) + DtLB + CDLB (time deposit and certificate of deposit in license banks)
M3 includes the deposits in the whole three-tier system, and it includes long-term savings and also deposits in RLB and DTC. M3 = M2 + DtRLB + DtDTC + CDRLB + CDDTC.
1)       The next level of MS includes the last level’s MS. e.g., M2 includes M1.
2)       Except cash leakage to foreign place, M3 usually remains the same. The change in M0~M3 is given by the change in the smaller parts. For example, when a people put $50 into time deposit in license bank, ΔM1 = ΔCp = -$50, ΔM2 = ΔM1 + ΔDtRB = -$50 + $50 = $0.
In HK, HKMA authorized HSBC, Standard Chartered Bank of HK and Bank of China to issue bank notes while HKMA issues $10 legal tender and all coins. In order to stabilize the exchange rate US$1 = HK$7.8, all HK currency issued, are backed up by equivalent amount of US dollar at 1:7.8. The backed up currency has made HKD into an exchange standard.
Money creation
Banks accept deposits, put some as reserve (the reserve ratio is at least the required reserve ratio (rrr) ordered by central bank or government) and loan out the rest to make profit. Loans can be risky since people may withdraw money from time to time. The rrr is set up to prevent bank run to meet customers’ withdrawal.
Assets VS liabilities
To a bank, accepting deposits are liabilities to the bank since the bank owes the customers the sum of money. Similarly, the reserves and loans are assets of bank because the lender owes the bank the sum of money.
When ones put some money into the bank, for a bank the deposit and reserves increase at the same time (of the same magnitude). We have total assets = total liabilities.
Assumption of money creation
1)       Bank only keep required reserve (deposit * rrr) and lends out the rest, i.e., they have exactly zero reserves.
2)       Only demand deposit exists.
3)       All money will be re-deposited into the banking system and no leakage of cash (i) from the bank to the public, and; (ii) in/out of the economy.
Process of money creation
When one deposited a sum $X into the banking system, the bank keeps $X(rrr) and lend out a sum of $X(1-rrr). That money is again divided into reserves and loans. The process continues until all $X becomes required reserve and the money creation process is done. It follows that the deposit increases $X/rrr (because Δdeposit * rrr = Δreserve). Thus 1/rrr is called the banking multiplier. In reality, banks may keep excess reserve; otherwise they can’t meet the req. reserve and they have to call back loans, which are called money contraction.
Actual reserve ratio = actual reserve / deposit and excess reserve = reserve – req. reserve = deposit (actual reserve ratio – rrr).
For example, when one deposited $80 into a bank where rrr = 50%. The bank keeps $80*50% = $40 and lends out $40. When that $40 is again put in the bank they keep $20 and loan out the rest… until $80 becomes the reserve fully. Total increase in deposit = $80 / 50% = $160.
Money multiplier = (Cp + Dd) / (Cp + reserve) = M1/M0, is the multiplier given that there’s some money in public circulation or in central bank.

Saturday 28 May 2011

Chemistry : Important organic substances

Important organic substances
-          They are useful since they can have different properties, namely strong, light, head-wearing, good insulators of heat and electricity, flexible, waterproof, can be moulded easily, can be colored easily, can be transparent (that’s not easy for metallic surface), chemically inert and cheap. (Each types of plastic include different properties from the above, not all)
-          Polymer is a compound which consists of very large molecules formed by joining together many small molecules repeatedly.
-          Polymerization is the process of repeatedly joining together many small molecules (monomer) to form very large molecules.
-          Polymers can occur naturally, like wool and silk. Man-made polymers are known as plastics. Regenerated polymers are modified from natural polymers while synthetic polymers are made by chemical reactions.
-          Repeating unit is the smallest part of polymer while the whole polymer can be obtained by repeating it. For example, the repeating unit of polyethene  is .
-          Addition polymerization is the reaction where monomers join together repeatedly to form polymer molecules and no atoms are lost from the monomers. They are done usually by the breaking of C=C bond in the monomers are bonding between the monomers.
Example: polystyrene, note that styrene is the common name of ethylbenzene.

-          Common addition polymers include polypropene (PP), polyvinyl chloride (PVC), polystyrene, Perspex and polyethene.
-          Polyethene can be classified into low density polyethene (LDPE) and high density polyethene (HDPE). LDPE has low density since the polymer chains are separated and have weaker intermolecular forces; LDPE are light and flexible which can be used as wrappings; HDPE has high density since the polymer chains are tangled each other, hence higher intermolecular force and higher density; HDPE are harder so it can be made into bottles.
-          Condensation polymers formed when monomers join together repeatedly to form polymer molecules with some small molecules eliminated. For example, nylon by adding diamine and dioic acid, note that –OH in dioic acid and –H in amine has been eliminated.
-          Nylon has hydrogen bond between the polymeric chains, hence it has high m.p. and tensile strength.
-          Typical condensation polymer includes polyester (dioic acid + ethylene glycol), nylon, urea-methanal and phenol-methanal.
-          Thermoplastic are softened upon heating, can be remoulded and hardened when cooled down. Most plastics are thermoplastics.
-          Thermosets, can’t be remoulded once it’s cooled. It’s due to the cross linkage between polymeric chains. For example, in urea-methanol, the repeating unit includes –NH- group. When methanal is added, the two H from two –NH- from two polymeric chains and the O in methanal eliminates in forms of water, when a methyl group links the two polymeric chains, which is known as the cross linkage. Typical thermosets includes urea-methanal (white) and phenol-methanal (black). They are often used as the case of electrical sockets.
-          It causes environmental problem since it’s non-biodegradable. We can make it biodegradable or photodegradable, or reduce the use of plastics by the 5Rs, etc.
Aspirin, IUPAC name: 2-ethanoloxybenzoic acid
It’s used to reliving pain/inflammation/fever or reducing risk of heart attack. The adverse effect is the irritation on stomach.
Synthesis: It can be prepared salicylic acid (2-hydroxybenzoic acid), forming ester with methanol. So we can use alkaline hydrolysis (back titration) to determine the % content / mass of aspirin contained in a tablet by C9H8O4 + 2NaOH → CH2COONa + C7H5O3Na + H2O, where C7H5O3Na is sodium 2-hydroxybenzoate.
Detergents: cleaning agents
Water has a high surface tension so it beads up on the surface, wetting up the agents slowing and hence can’t clean well. Detergents contains a hydrophobic hydrocarbon tail (alkane chain) and a hydrophilic anionic head (O-Na+).
1)       Soapy detergents are made from natural fats and oils. The anionic head is carboxylate, like –COO-K+.
2)       Soapless detergents are made from chemicals (petroleum). The anionic head is sulphate like –SO4-Na+.
Detergents as a wetting agent: the anionic head sticks on the water surface and separate the water molecules, then the surface tension decreases and the water spreads (instead of staying as beads) and spreads.
Detergents as an emulsifying and cleaning agent: originally there’s no interaction between water and the grease, the hydrophobic tails dissolves in the grease while the hydrophilic anionic head dissolves in water. Water keeps on attract the anionic tails and lifts the grease off the fabric. Upon stirring, the grease breaks up into tiny droplets and these droplets can’t combine again due to electrostatic repulsion among the anionic heads of the detergents particles. That explains the emulsifying effect and cleaning principle of detergents.
Soapy detergents form ppt when applied in hard water (which contains a greater amount of dissolved Ca2+ and Mg2+ ions due to displacement in the carboxylate ions. The insoluble white ppt accumulated is called scums. However, soapless detergents easily cause allergic, and it’s non-biodegradable.
Fats and lipids

Lipids are in forms of triglyceride, which is a condensed product from glycerol (1,2,3-propantriol) and fatty acids (a long chain carboxylic acid). Upon hydrolysis it becomes glycerol and fatty acids. So we can apply alkaline hydrolysis such that fatty acids become sodium carboxylate, which is a detergent. Therefore by heating oil and conc. NaOH we can obtain soapy detergents. We add conc. NaCl to lower the solubility of soap in water and a “soap cake” floats on the surface.
Soapless detergents can be prepared by alkylbenzene from petroleum. Upon sulphonation (conc. H2SO4 (aq) + excess SO3 (g)), SO3H group is added on the para- position. Adding NaOH would give SO3-Na+ and it can be soapless detergents.
Unsaturated fats means that it contains C=C bond (unsaturated compounds), which has a lower melting point (packed less regularly), usually liquid state in room temperature. So we hydrogenate the unsaturated fats to produce margarine. However, the by-product with trans- C=C bonds can’t be digested and accumulates in our body, which is known as trans fats, increasing risk of heart diseases.
Simple carbohydrates are known as sugars or saccharides. Monosaccharides are carbohydrates like glucose and fructose that can’t be cleaved into smaller carbohydrates by acidic hydrolysis, disaccharides can be broken down into two monosaccharides by hydrolysis while polysaccharides can be broken into more monosaccharides.
Monosaccharides can be classified into aldoses (containing aldehyde group) or ketoses (containing a ketone group). Glucose is a aldohexose with three structure, one is open-chain while another two is in cyclic form. The figure shows the open structure of glucose. The cyclic form is given by linking the first and last carbon by the O instead of the carbonyl group.

Proteins and polypeptides
Amino acids are in forms of H2NCHRCOOH, where R differs for different amino acids.
It condenses into a dipeptide by eliminating H2O from –COOH + H2N- to –CONH- + H2O.
Hydrolysis can be carried out: acidic hydrolysis gives Cl-H3N+CHRCOOH while alkaline hydrolysis gives H2NCHRCOO-. In living organisms the process are done by enzymes instead of chemicals.

Friday 27 May 2011

Chemistry : Organic synthesis

Organic synthesis

I just want to say that the procedures for different organic reactions are different, it needs your own practice. Also, method (2,3) are out syb. in HKDSE.
In organic reactions the percentage yield is not 100% every step (about 70%), so we should use the least steps to produce one product.
Some techniques:
1)       Switching position of a functional group
RCH2CH2X → RCH2CH2OH (NaOH, reflux) → RCH=CH2 (dehydration)→ RCHXCH3 (HX)
Similar techniques can be applied on alcohol.
RCH2CH2OH → RCH=CH2 (dehydration) → RCHXCH3 (HX) → RCH(OH)CH3 (NaOH, reflux)
2)       Inserting a carbon atom in benzene
Apply alkylation on aromatic compounds, but rearrangement between carbon atoms occurs for longer chain, so we can use acylation (acylium ion won't rearrangement since it's stabilized by resonance)

3)       Inserting a carbon atom into alkane by HCN
Since HCN is extremely toxic and volatile, it's prepared during the experiments by 2KCN + H2SO4 → 2HCN + K2SO4.
From the hydroxyalkanenitriles we can also produce amine by reducing the cyanide group into CH2NH2 (by LiAlH4)

General experimental procedure in organic synthesis
1)       Planning the reaction steps
2)       Produce the desired product (carrying out the reaction)
3)       Separation, purification and drying of product
4)       Calculate the percentage yield (actual/theoretical product * 100%)
We can separate the unreacted reagents, by-products and catalysts by distillation if they have a large difference in volatility or boiling point. For example, if the unwanted substance has high boiling point (like carboxylic acid), we can use water bath to heat the solution and distillate the products. Besides water bath, oil bath or Bunsen flames can also be applied for higher temperature.
Fractional distillation
We only collect the distillate at a certain range about the b.p. of the products. This separate most of the unwanted substances. Glass beads are applied to give higher surface area for condensation and vaporization of the products.
Liquid-liquid extraction
By the like-dissolve-like principle, we can put the solution in a separating funnel. We can hold the stopper and tap firmly when shaking the separating funnel (open the cap regular to release pressure), allow the two layers to separate and run off the lower layer. Then organic and aqueous layers are separated.
1)       Organic solvent (dry ether) can be added. Upon shaking the organic product preferentially dissolves in dry ether, then dry ether can be removed by distillation (b.p. of ethoxyethane is 35ºC)
2)       Aqueous solvent can be added to dissolve unreacted or by-products. For example, unreacted alcohol dissolves in HCl, then only the reacted product are left in the organic layer.
We use a solvent that has no reaction with the product, dissolve the product in minimum amount of hot, conc. solvent, filter the impurities, then allow it to cool down slowly while impurities may stay in the solvent. Collect the crystals by filtrations.
Take BuOH + HBr → BuBr + H2O under reflux as example (Bu is the butyl group)
1)       We prepare HBr by conc. H2SO4 and NaBr.
2)       Distillate the crude product (oily drops) from the distillate.
3)       Allow aqueous and organic layer to separate, remove the aqueous later by teat pipette (crude product might be slight denser than aqueous product).
4)       Put the distillate into separating funnel and add HCl to remove unreacted BuOH. Treat the organic layer with NaHCO3 to remove unwanted acids and separate them by separating funnel again.
5)       Use anhydrous Na2SO4 to dry the solution until the liquid is clear.
6)       Filter the solution. Collect BuBr by fractional distillation.
Note that the percentage yield is usually quite low because:
1)       Uncompleted reactions
2)       Side reactions, especially acid reaction vs redox reaction
3)       Product is lost during purification

Tuesday 24 May 2011

Doc. version of notes updated

What have been updated:
- The topic "National income statistics and inflation" has been updated with the section "other macroeconomic problems"
- The topic AD-AS model and fiscal policy uploaded

Organic Chemistry
The following topics have been added:
- Nomenclature (29)
- Isomerism (30)
- Typical reactions (31)
The following topic have been added to the to do list
- Polymers (28)
The following topics will be integrated, but they may not be integrated in this season:
- Introductive organic chemistry (26,27) and  nomenclature (29)
- Polymers (28) and important organic substances (33)
- Typical reactions (31) and organic synthesis (32)

Monday 23 May 2011

Chemistry: Typical Organic reactions

No pictures here, but it'll appear in the doc. ver.
Also, it seems that there're several out.syb. stuffs here. including:
- the term electrophilic addition
- diol by OsO4
- alc. KOH
- pyridinium chlorochromate
1)       Alkane
-          Combustion: under complete combustion we have CnH2n+2+(3n+1)/2 O2 → nCO2+(n+1)H2O
-          Halogenation: substituting a halogen atom into a alkane CnH2n+2 + X2 → C2H2n+1X + HX under un light or heat. (uv is better) Under excess alkane the major product is C2H2n+1X where reaction take place on each molecule once only. Under excess halogen, all hydrogen attached to carbon is substituted by halogen, and becomes CnX2n+2.
2)       Alkene
-          Electrophilic addition: RCH=CHR1 + X-Y → RCHXCHYR1.
e.g. addition of hydrogen or addition of halogen in organic solvents [2].
-          Hydration by cold, concentrated H2SO4
-          When HA is added to asymmetrical alkene, Markovnikov's rule states that the major product is that the hydrogen atom is added to the carbon atom already carrying more hydrogen atoms. For example, when Br2 is added to propene, the major product is 2-bromopropane since the there're more H on the first carbon atom.
-          This is also a test for existence of double/triple bond. When bromide is added to unsaturated compounds, it changes from brown to colourless.
-          Oxidizes into diol by cold, dilute K2Cr2O7/OH- or OsO4.
3)       Haloalkane
-          Preparation by dehalogenation under alcoholic alkaline environment
-          Zaitsev's rule states that under elimination the substituent on C with less H are more likely to be eliminated. For example, when 2-chlorobutane is undergoing dehalogenation, but-2-ene is the major product instead of but-1-ene.
-          Substitution to alcohol under NaOH and reflux.
4)       Alcohol
-          There are three classes of alcohol, including primary secondary and tertiary alcohol, depending on the number of alkyl groups attached to the C atom linked with the hydroxyl group. For example, ethanol is primary; cyclopentanol is secondary while 2-methyl-propan-2-ol is tertiary.
-          Primary and secondary alcohols become haloalkane under anhydrous environment and ZnCl2.
-          Tertiary alcohols readily changes into haloalkane under concentrated HCl and room temperature.
-          HBr is prepared by H2SO4+NaBr while HI is prepared by H3PO4+NaI in laboratory.
-          React with PBr3: 3ROH + PBr3 → 3RBr + H3PO3 under reflux. PBr3 is prepared by mixing red phosphorus and bromine.
-          React with PCl5: ROH + PCl5 → RCl + POCl3 + HCl
-          React with SOCl2: ROH + SOCl2 → RCl + SO2 + HCl under reflux.
-          Dehydration on 1º alcohol by excess conc. H2SO4 and heating.
-          Dehydration on 2º alcohol by 80% H2SO4 and heating.
-          Dehydration on 3º alcohol by 20% H2SO4 and heating.
5)       Oxidation among alcohol, aldehyde and ketone
Under oxidation, 1º alcohol → aldehyde → carboxylic acid
The common oxidizing agents include acidified/alkaline potassium permanganate (KMnO4/H+ or /OH-) and acidified potassium dichromate (K2Cr2O7/H+).
For example, the oxidation of ethanol to ethanoic acid by acidified potassium permanganate.
Note that under such strong oxidizing agent, the aldehyde is not isolatable, if aldehyde is to be obtained, we can use PCC(pyridinium chlorochromate) as [O].
Under oxidation, 2º alcohol → ketone by similar oxidizing agent. No further reactions occurred.
There is no oxidation process for 3º alcohol since aldehyde can't be formed (=O) without kicking one of the alkyl group and this is impossible.
6)       Reduction among alcohol, aldehyde and ketone
-          Under reduction carboxylic acid, aldehyde or ketone reduces back to alcohol.
-          Lithium aluminium hydride (LiAlH4) must be applied in anhydrous environment since it's explosive with water, so dry ether (ethoxyethane/diethyl ether/CH3CH2OCH2CH3) as the solvent. Also acid must be put in separate step, we can write like the example:
-          NaBH4 is a weaker reducing agent which can't reduce carboxylic acid.
7)       Carboxylic acids
Condensation is the reaction in which two or more molecules react together to form a larger molecule with the elimination of a small molecule like H2O.
Esters is a good solvent and have a sweet smell so it's used as artificial flavorings.
Fischer esterfication is the reversible reaction R1COOH+R2OH→R1COOR2+H2O under conc. H2SO4.
Preparing amide:
2CH3COOH + (NH2)2CO3 2CH3COO-NH4 + CO2 + H2O or RCOOH + NH3 RCOO4NH4+ help us to prepare the ammonium carboxylate, then by heating RCOO4NH4+ RCONH2 + H2O. Excess conc. ethanoic acid is used to prevent the dissociation of the salt before it dehydrates.
8)       Esters
-          (Acidic) hydrolysis: by adding water to ester it becomes alcohol and carboxylic acid.
-          In alkaline solution, we can add NaOH to produce RCOO-Na+. Since this removes the carboxylic acid, the equilibrium goes to complete. Remove the alcohol by distillation in reflux set up. After ROH is collected we obtain RCOOH by adding excess mineral acid.
9)       Amides
-          In acidic solution: RCONH2 + H3O+ RCOOH + NH4+, e.g. CH3CONH2+HClCH3COOH+NH4Cl
-          In alkaline solution: RCONH2 + OH- RCOO- + NH3, e.g. CH3CONH2+NaOHCH3COO-Na++NH3
1)       We won't discuss the regionospecific properties here.
2)       Adding halogen in aqueous form gives different product. e.g., CH2=CH2+Br2(aq)→CH2BrCH2OH
3)       Alkene also undergoes polymerization.
4)       Reflux and related apparatus will be discussed later.
5)       The order of reactivity is always RI>RBr>RCl>>RF (R can by alkyl or hydrogen) because of the stability of halide ions. HF usually does not react.
6)       The reactivity of alcohols are given by 3º>2º>1º since the more alkyl group attached, the more stable the alkyl ion.