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From this information I can derive the conclusion that the variable qt seems to be non-stationary. Also, the absence of a clear trend in its movement. In order to validate my conclusion, next I try to test unit roots of qt. Unit root test is a existence of a unit root test sequences.

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Literature Review
Deception has permeated into every corner of life. It exists not only in daily communication, but also in the dialogues in some literary works. This thesis aims to analyze the pragmatic effects and strategies of deception in Three Kingdoms. On the one hand, the analysis of deception enables us to have a better understanding of the implied meanings and the artistic charm of the classic works. On the other hand, the analysis of deception in literary works can also deepen our understanding of relevant linguistic theories.
Deception is defined differently by different scholars. Some scholars such as Krauss,Coleman,Kay respectively give their definitions to deception. But they confuse deception with lying. Then Galasinski gives us an authoritative definition of deception. He considers deception as “a communicative act that is intended to introduce in the addressee a particular belief, by manipulating the truth and falsity of information.” In this thesis the author adopts the definition of deception as “a successful or unsuccessful deliberate attempt, without forewarning to create in another belief, which the communicator considers to be untrue.”

As the definition of deception implied, we find that deception is a deliberate attempt made by people, hoping to achieve some purpose. That is to say deception is frequently employed as a pragmatic strategy to achieve some pragmatic effects and has good effects on smooth and fluent interaction.
Being able to make good use of different communicative strategies is part of one’s communicative competence or pragmatic strategy. Communicative or pragmatic strategy is a term often used in pragmatics, referring to interactional participants’ solutions to multiple conflicting goals. Deception here is regarded as a communicative or pragmatic strategy.
Because deception is “embedded in our daily life, it is not always easy to recognize. Deception takes a variety of forms and can be divided into different kinds according to different categories.

Many scholars have put forward their classification of deception. Anolli describes three types of deception: “concealment, falsification and distortion”.
Besides, many scholars have made great effort to explore deception in different fields.
The explosion of deception literature traced its back to the medieval period and during the 1980s and 1990s the explosion of deception developed quickly which was caused by growing awareness of the scholars. And scholars home and abroad have explored deception from different perspectives. Generally speaking, they view this phenomenon in the ensuing ways: the study of deception from ethnical field; the study of deception from psychological standpoint; the study of deception from the developmental psychological stance; the study of deception from logical angle; and the study of deception from linguistic perspective. Furthermore, great achievements have been made by the above studies. However, there still exist some gaps ignored by the studies.
The earliest study of deception can be traced back to the medieval period. At that time, the studies of deception mainly concentrated on the ethnic field. And deception is distained and rejected both in western and eastern countries. Some scholars such as Augustine mentioned the classification of deception. Later, philosophers like Immanuel Kant again adopted against stance towards deception. Fromthe ethnical angle, deception is indeed immoral and deserves resistance. However, in reality blindly emphasizing the necessity of deception and denying the existence of deception is unilateral and unrealistic.

In the past half century, there was a soaring attention attached to deception. Most of them are within the scopes of psychological field. The studies in the psychological fields pay attention to the detection of deception. In general, the fruits of the psychological studies of deception meet the need of society. However, few comprehensive psychological theories have been put forward to explain deception. Moreover, these studies can not make good description to the language of deception.

The studies in the developmental psychological fields are mainly concerned with the children’s cognitive development of deception. For example, Xufen, JIngChunyan, LiuYing once pointed out that the age of 3 to 4 is the turning point for a kid to understand deception. It is not until 9 years old that children will judge deception by talking the motives and context into consideration.

The studies of deception in the logical fields are chiefly made by scholars home. They classify different kinds of deception and finding that there are three types of deception existing in Chinese. However, few studies have devoted to investigating the whole process of deception.
In general, the above studies from different angles are static descriptions of deception. But we can not deny a fact that the usage of deception is a dynamic process. And following, scholars get down to studying deception in a new angle. That is the studies of deception from linguistic perspective.
Many scholars have devoted to the study of deception from linguistic angle. Generally speaking, the study of deception from the linguistic perspective is more advanced in western countries. And of the studies from the linguistic point of view, the study from the pragmatic angle provides solid foundation for this thesis. For example, Grice’s Cooperative Principle, Austin’s Speech Act theory, prototype theory proposed by Rosch, Jef Verschuren’s adaption theory all play an important role in the study of deception.
The studies of deception from pragmatic perspective make up for the deficiency of static descriptions of deception. Grice in 1975 put forward the Cooperative Principle. The cooperative Principle is a principle of conversation, stating that participants expect that each will “make the conversational contribution such as is required, at the stage at which it occurs, by the accepted purpose or direction of the talk exchange”. Grice believes that the assumption of cooperation can be elaborated in four sub-principles called maxims including quality; quantity, relation and manner: 1. Quality Maxim: Try to make your contribution one that is true. Do not say what you believe to be false. Do not say that for which you lack adequate evidence.2.Quantity Maxim: Make your contribution as informative as is required (for the current purposes of the exchange).Do not make your contribution more informative than is required.3.Relation Maxim: Be relevant.4. Manner Maxim: Be perspicuous. Avoid obscurity of expression. Avoid ambiguity. Be brief (avoid unnecessary prolixity).Be orderly.”
PAPER CRITERIA
The topic must relate to accounting, accounting theory or accounting history.
Each paper must have an introduction that acts as a roadmap for the reader, that is, it must specifically describe what the topics that will be covered in the paper.  The body of the paper must reflect the outline described in the introduction.  All papers must have a summary or conclusion.  I recommend the use of subheadings to help organize the flow of the paper.

  Do not use first person (I and we) or second person (you) pronouns in the paper. Write the paper in active rather than passive voice.  Each paper must have a minimum of four references (two of which must not be internet sources) that are cited in a bibliography at the end of the paper.  Be sure to cite your sources in the paper.  For example, (Ainsworth, 1999 p.134) gives the lead author’s name, the date of the article, and the page reference.  This should tie to the bibliography at the end of the paper.  Failure to properly cite an article is plagiarism and is considered cheating and will result in an F for the course.  Many students find it convenient to paraphrase one article and then cite some superficial articles.  I would strongly discourage this practice.  I have high quality papers in my office that may provide some guidance.  USE OF WIKIPEDIA AS A SOURCE WILL RESULT IN A FAILING GRADE FOR THE PAPER.

SOURCES OF INFORMATION
Accountant’s Index
Wall Street Journal Index
Business Periodical’s Index
Internet
AICPA.org
SEC.gov
Google.com
IMANET.org
Introduction

   The motivation of why I choose purchasing power parity Theory which is I am very interesting about the reason of the same good can have huge different price in different countries. For example in US a BMW335i motor is only 42800 dollar.  But in China it cost 626000 yuan, equivalent of 98366 dollar. Another way , the cucumber per Kg in China is 5.6 yuan , but in US it is cost 3.9 dollar per Kg. That means the same cost can have different earnings in different countries. Of course there are many factors lead to this result, exchange rate, tariff, the relationship between supply and demand, interest rate and so on. But how can we say it is a correct or reasonable price?

  The purchasing power parity Theory is a wide application approach. It initially by an economist Thornton in United Kingdom in 1802 .With the passage of time, it become a part of the classical economic theory and finally an Sweden economists Gustav Cassel(1866-1945) developed and enriched this theory.

  There are four hypothesis on the theory. First, international trade must be totally free. Second, the changes in commodity prices should be the same for all ranges. Third, price is the only factor affecting exchange rate. Finally, the amount of currency is the only factor affecting purchasing power parity. And the most important viewpoint of purchasing power parity theory is a currency that is calculated according to the price levels in different countries between the coefficient of equivalence, to enable fair comparison of the gross domestic product of countries, and there have a lot of gaps between this theory and actual rates of exchange. In other word, the reason of domestic need foreign currency or foreign need domestic currency is the two currencies in the issuing country has the purchasing power parity of commodity,the exchange rate between the two countries due to the ratio between their purchasing power parity. There are two senses in  purchasing power  parity theory hypothesis. Absolute Purchasing Power Theory and Relative Purchasing Power Theory. Absolute Purchasing Power Theory is also known as The Law of One price. The conditions of law of one price contains all the countries have adopted the same degree of currency convertibility, the information must be fully, there is no transaction costs and the tariffs should be zero. Then we can conclude that the equilibrium exchange rate between the domestic currency and foreign currency should be equal to the ratio of purchasing power or price levels between the domestic and foreign countries. But absolute is not perfect, so the economists use Relative purchasing power theory which is “the change of the exchange rate over a given period just offsets the difference in inflation rates in the countries concerned over the same period(Journal of Economic Perspectives pp137)”. Contrast to absolute purchasing power parity theory , it consider with inflation rate because sometimes inflation will reducing the purchasing power parity of currencies. The relationship between absolute and relative PPP is that if absolute PPP holds then the relative PPP must hold because the price index is the ratio between . But if relative PPP holds, the absolute PPP dose not necessarily hold, since “it is possible that common changes in nominal exchange rates are happening at different levels of purchasing power for the two currencies(Journal of Economic Perspectives pp137)”.
    My study aims to investigate the relationship between the purchasing power parity and exchange rate, inflation rate. I chose China and US to be my investigation objects. China is the biggest developing country and it kept 10% growth rate over the last 30 years. In 2010, it overtook japan as the world’s second largest economy. At the same time, China is the largest exporter and second importer of goods in the world. US, the largest economy of the world, approximately a quarter of the global GDP.

  Theoretical and empirical relationships
  In order to investigate whether the purchasing power parity holds, I collected the CPI data of China and US from 1993-2012 and the data of the exchange between those two countries. 
  First I used the approach which has been proposed by Frankel on 1978. This approach attempted to test whether the real exchange rate is stationary. In the other words, it tested whether the real exchange rate process follows a random walk. Then I try to test the following equation:
qt=st-pt+pt*
which st is the log of nominal exchange rate, pt is the log of CPI in China and pt* is the log of CPI in US, qt is the real exchange rate. This approach has two hypothesis:
               H0: qt ~ I(1)
               H1:qt ~ I(0)
The null hypothesis means that the equation contains at least one unit root and the series is not stationary. The other one means that there is no unit root.So if we can reject the null hypothesis means that the purchasing power parity does hold in the long-run.
  From eviews I got a graph of the real exchange rate between the CPI of China and US.

Visual inspection offers several insights. First, we may note that the variable qt has a positive intercept at about 2.05. Also it shows an erratic behaviour. It dose not move around its mean, it fluctuated violently from 1994-1995 and the hump is about 2.29, after that it show a sharp in the trend until to 1996.After that it increase slowly and erratically. From 2006 it show a decrease in the trend. Finally there is not an obvious trend.
    From this information I can derive the conclusion that the variable qt seems to be non-stationary. Also, the absence of a clear trend in its movement. In order to validate my conclusion, next I try to test unit roots of qt. Unit root test is a existence of a unit root test sequences. The time series is non-stationary if there is a unit root exist. Here, I used ADF test.


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