Inflation

WIDER OPPORTUNITIES In the market system, the decision making attitude of an individual remains handicapped because of two reasons: (1) The limited life span of an individual (2) The limited resources at the disposal of an individual. Because of these problems in the market economy individuals undertake those projects which require small amount of resources and the fruits of these projects could be reaped within the life span of an individual. In this way the individuals would hardly be prepared to launch big projects like construction of highways, power-stations, land-reclamation, anti water-logging and sanity schemes, and rail-roads etc. because such projects are beneficial even for those individuals which are yet to born in distant feature. On the other hand, these problems do not exist in case of planning where the resource user is the community as a whole. This is because of two reasons: (1) Community, unlike an individual, never dies; (2) The resources at the disposal of the community are large. Because of these reasons, the economy as a whole in the form of planning can visualize a longer and larger horizon as compared with an individua1. In this way, planning offers greater and wider opportunities as compared with market. PUBLIC ORIENTED GOALSIn market economy only those goods are produced whose demands are backed by money offers. As a result the production of public goods like education, health services, parks, old-age institutes, orphan houses and shelters for homeless person etc. will not be made or they will be produced sub-optimally. Thus in capitalism when all the allocative and distributional activities move around the money vote, the resources will hardly be allocated for the socialization of the society. This will have a negative effect on the efficiency of the masses. Hence, it is the planning which distributes the resources between present consumption and future consumption, social development and economic development etc. As a result the goals of planned society are more welfare and public oriented. RETTER USE OF RESOURCES The market mechanism is furnished with unused and idle capacity during depression. This situation adversely affects the employment, output and potentialities of the economy. But in case of planned economy, there is no possibility of occurrence of trade-cycle and its devastating consequences. Here, an equality between demand and supply is brought about in advance. In the market economy, there are wasteful expenditures in the form of selling costs etc. Here a rivalry develops amongst the producers. While in a planned economy, the producers do not have to make expenditures on advertisement and sales promotion activities. Here the producers are partners, rather than rivals. Thus in planned economy, there is greater and optimal use of resources. GREATER RESOURCES The market economy is characterized with the limited resources. Here, one's resources may be consisting of savings, profits and share money etc. On the other hand, the planned economy has greater, command over' resources. In addition to private savings, govt. can follow compulsory devices like taxes and deficit financing etc. These resources which have been obtained by curtailing the consumption will be of greater significance for the UDC which are engaged in providing benefits to present as well as future generation. Thus, we say that devices to raise funds or compensatory finance do not exist 'in unplanned laissez-faire system. In addition to these monetary resources, the planned economic system can make better calculations regarding' manpower, land resources, forests and minerals. Moreover, under planned system, the planning authority can enlarge the future horizon of resources by modifying the production activity. A government can opt for a program which makes available more resources in future. A choice among construction of new plants or discovery of oil fields; facilities of higher education or primary education; improving the sanitation system or following the malaria eradication program providing job opportunities to women or following birth control devices - such a11 will affect the quantum and quantity of resources that will become available in future. While such all cannot be conceived, by the market system. Thus planning not only eliminates the wastage of resources but also leads to augment the resources in future. PRODUCTION PATTERN In a planned economy not only the production of goods and services may be greater, but the pattern of produced goods and services may also be different. This can be observed from this fact that planned economies divert major share of their resources in the production of capital goods rather in the production of consumer goods. The planned economy plans by keeping in view the needs of future. While in the market economy the individual producers act upon myopic vision that they have a short life span. The planners think that the community is immortal, hence the resources be diverted in such a way that future people could also avail the benefits. In connection with adopting a choice of technique in market economy, each producer will follow such a technique which yields him abnormal profits and superiority over others. Because of such temptations, the monopolies and cartels grow. While in the planned economy, such technique of production will be followed which is best suited from community's point of view - mostly labor intensive technique of production. This means that in market economy there is a pursuit of profit. While in planned economy, the employment strategy is given preference. LARGER SAVINGS AND INVESTMENT In a market economy investments are determined by the time preferences of individual savers. These preferences of investors may not be compatible with .the social goals. The individual preferences are irrational; the irrationality consists in discounting the future properly. On the other hand, under planned economic system, not only the amount of savings and investment can be greater, but the investment can also be made in those fields commanding greater social considerations. DISTRIBUTION OF INCOME The capitalist economies are not only furnished with inequitable distribution of income and misallocation of resources, but there are also a variety of chances of unearned incomes and windfal1 gains (as well as losses), etc. Such incomes may be spent lavishly on luxuries and other unproductive channels. While in the planned economies on the one side the distribution of income can be made fair, while on the other side there is no possibility of such windfall gains etc, hence no wasteful consumption expenditures. As a result, there will be no class conflict in the planned economy, no possibility of have and have-nots; no privileged class and no deprived class and there is equalization of opportunities in respect of skill, training and education etc. in the planned economic system. If a market economy, whatever the efforts are made to raise the incomes or-lower class, there is no guarantee that inequalities will lessen. If the incomes of low income brackets are increased, the incomes of high income brackets win. Increase far more. This is concerned with the basic proposition of market economy that it cannot exist without private property and unequal income distribution: NATIONAL TASKS AND EMERGENCIES A planned economy can give priorities to the matters relating to national tasks and deal the matters relating to emergencies in a better way. As for security purpose, it can divert the resources from the civilian to military sector, i.e. switching of resources from peace time needs to war time needs. Again, after the war, it can convert the war based economy to peace time needs. The planned economy can build the war affected sectors of the economy in a better way than a market-oriented economy. Moreover, the planned economy can do the best in connection with the development. It can divert the resources of the economy in those fields which will directly or indirectly promote economic growth. Planned economy can ensure a balance in between saving and investment; consumption and income; outgoings and incomings in the external sector of the economy. No one can refute to admit that planned economy is more suitable to face the national emergencies like crop failures, earthquakes, epidemics, storms and floods etc. On the other hand, market economies fail to deal properly with the emergencies, natural calamities, national development and war time needs. Accordingly, the social and economic wastes under market economy will be more as compared with the planned economy. PROBLEMS RISING FROM FOREIGN TRADE Now-a-days the problems of foreign trade have become more acute. The UDCs have to face the persistent deficits in their BOPs. The terms of trade are going against them. They have to confront with protectionist policies on the part of DCs. The debt burdens are mounting. The international financial and developmental agencies charge heavy interest rates. The gap between have and have-nots is increasing day by day. Such an problems relating to open economy are attributed to market economy. Therefore, to remove them some type of planning is required. CO-ORDINATION BETWEEN ECONOMIC ACTIVITIES In 'Laissez-Faire' economy every body is inspired of self-interest. As a result, it may happen that some good is produced in abundance while there is shortage of some other goods. As in case of Pakistan an efforts were made to develop textile industry while steel, iron and automobile like industries were completely ignored. Moreover, there is a concentration of industry in the overcrowded cities like Karachi, Faisalabad and Multan while Baluchistan remained like an island of backwardness. Thus to bring co-ordination between economic activities and remove regional disparities planning is advocated. SOCIAL AND SOCIOLOGICAL PROBLEMS There are so many social evils in the free enterprise economies like illiteracy, poverty, redtapism, bribery, black-marketing, generation gap, industrial problems, problems relating to urbanization and corruption, etc. Therefore to remove them state intervention in the form of economic planning is justified. MARKET IMPERFECTIONS AND PRICE DISTORTIONS In market economies of poor countries not only there are market imperfections but one can also find price distortions both in commodity as we11 as in factor market. These distortions rise because of institutional arrangements. As the wage rate in some sectors of the economy exceeds the opportunity cost of the labor. This may be due to trade-unionism etc. Moreover, the goods whose demand is less elastic their producers may pursue monopolistic' behavior. There may be dualistic practices in the money market. In the organized money market the rate of interest is kept artificially low or inexpensive credit facilities are provided to the favored clients like big businessmen and industrialists. While on the other hand in rural areas the rate of interest is extraordinarily high. This situation also results in price distortions. Again in the presence of severe inflation, the real rate of interest will be negative where cheap credit money policy is adopted. In developing countries major part of money market is dominated by a minority of borrowers. It is said that govts. In developing countries are also responsible for price distortions when they reduce the role of demand and supply in capital and labor markets. Moreover, these poor market economies are also' adhered to keep an over-Valued rate of exchange. As a result, exports fan and there will be a flood of imports. As a result, the commodity prices will also be distorted. Furthermore the state enterprises are also responsible for price distortions when they follow their own pricing policies or subsidize the consumers with the view of public welfare. By: Shafaq Chohan

specialization depends on trade that is specialization leads to mass production and hence need for market for the surplus.

A reppresive government is a government that doesn't respect human rights.

Headline rate of infaltion related wiith income growth determine the individual's standard of living. it included the prices of that commodity that are volatile such as food and energy items.

Inflation in India is estimated on the basis of fluctuations in the wholesale price index (WPI). Zooming inflation that the country witnessed in the first quarter of the current fiscal 2008-09 and beyond - from 7.7 per cent at end-March 2008 to 11.9 per cent by July 12, 2008- can be attributed to the impact of higher international crude oil prices to domestic prices as well as continued increase in the prices of iron and steel, basic heavy inorganic chemicals, machinery and machinery tools, oilseeds/edible oils/oil cakes and raw cotton on account of strong demand, international commodity price pressures and lower domestic 2007-08 rabi production of oilseeds. The seasonal hardening of vegetables prices as well as increase in the prices of textiles have also contributed to the rising inflation during 2008-09 so far.

As the OCR increases it is highly likely that banks will increase their retail interest rates. As they do this borrowing will become relatively more expensive so there will be more incentive to save. So consumption a component of Aggregate demand will decrease causing aggregate demand to decrease which will than decrease Demand pull inflation

More goods will be provided only at higher prices. Thus, as the multiplier chain progresses, pulling income and employment up, prices will rise, too. This development, as we know from earlier chapters, will reduce net exports and dampen consumer spending because rising prices erode the purchasing power of consumers' wealth. As a consequence, the multiplier chain will not proceed as far as it would have in the absence of inflation.

what are steps in constructing the cpi

Deflation, the widespread lowering of the costs of goods and services, causes an increase in the value of money. Deflation tends to have a negative impact on stocks, but a positive effect on bonds. For more information on deflation, check out the related link below.

From the worker's perspective, raises are judged good or bad in reference to inflation. Its really a question of buying power more than the actual amount of money. Think of this example... If inflation is running 2% per year and you get a 2% raise, you break even. Your salary buys the same stuff at the start the year and the end of the year. If inflation is 2% and you got a 4% raise, you're now making more money than before. You have more buying power relative to the economy as a whole. So as a worker, your goal is to be able to buy more each time you get a raise. So if inflation is low, you can accept a lower raise and still increase buying power as long as the raise is higher than inflation. So when infaltion is low, a low raise (that's still bigger than the rate of inflation) just as effective as a large raise when inflation is high.

An optimum firm s one that has favorable working conditions. This is a firm that has created a conducive work environment.

FIFO

The biggest problem is that, although unemployment rates are so high, there is a shortage of skilled workers. More than that, as soon as people are educated they emigrate to first world countries that not only offer better pay but also have better infrastructure, less crime, and are more economically stable. Without this skilled labor the growth of the economy is virtually non-existent, but until the other issues above are addressed, the problem will not disappear, and without the problem disappearing, the above problems that make South Africa less inviting cannot be addressed.

Other problems include poor infrastructure (eg. electricity), extreme poverty, lack of health services.

Deflation is decrease in general price level of services and goods. Deflation occur when inflation rate is 0%

If it involves purchasing a service, a haircut contributes to the GDP. However, if you just get your mom to cut your hair in the backyard for free or something that would not contribute to the GDP.

what is the cause of the spanish economy declined and at times spain was bankrupt

lyndon johnson's efforts to maintain yhe vietnam war and great society programs without raising taxes

1. People living on a fixed income

2. Savers

3. Businesses

4. Creditors

The answers are 7%, 7.33%.

Volcanoes can change the economy positively or negatively.

The positive way is that a cone volcano like Mt.Fuji in Japan can bring tourist. Then the country might have a tourist based economy Also after an eruption,the land will become fertile which farmers can use to grow crops,and then sell them.Theres also a slight chance that the volcano might have jewels,which will cause mining and and a boost to the ecomomy.

The negatives are volcanic eruptions.Sure,they can fertilize the land but the lava will destroy the land first.The eruption could destroy a forest by causing a wild fire,ending the chance of logging.If the lava goes into a town,then it will obviously damage it, costing millions of dollars on repairs,meaning the economy gets sucker-punched in the face.The eruption can also cause land slides, which might end up destroying part of a town,which will cost the government millions,once again,pushing the economy of a mountain.Then theres insurence.Everyone has insurence,so the insuring companies will have to pay up.Normally,only 2 of those thing happen.But if all 3 happen,the economy is as good as dead.

Multiplying the Consumer Price Index (CPI) percentage increase from 2013 to 1774 by $70 million would estimate the relative value at $2.350 million.

strags.com

Better check your dates again. No US quarters were minted before 1796. The first U.S. Mint opened its doors in 1792, so there are no U.S. coins dated earlier than that. You may possibly have a colonial piece, but exact details about the designs on both sides would be necessary to determine what you have.

there isn't really any advantage but many companies will go bankrupt and go out of business. it really just causes many problems including over-weight people due to low food quality, more homeless, prices going up, and just a really big problem.