The Types Of Inflation Economics Essay

The Types Of Inflation Economics Essay Inflation indicates to a rise in prices that causes the purchasing power of a nation to fall. Inflation is a normal economic development as long as the annual percentage remains low; once the percentage rises over a pre-determined level, it is considered an inflation crisis. The term inflation once referred to increases in the money supply (monetary inflation); however, economic debates about the relationship between money supply and price levels have led to its primary use today in describing price inflation. Inflation can also be described as a decline in the real value of money-a loss of purchasing power in the medium of exchange which is also the monetary unit of account. When the general price level rises, each unit of currency buys fewer goods and services. A chief measure of general price-level inflation is the general inflation rate, which is the percentage change in a general price index, normally the Consumer Price Index, over time. Inflation can cause adverse effects on the economy. For example, uncertainty about future inflation may discourage investment and saving. High inflation may lead to shortages of goods if consumers begin hoarding out of concern that prices will increase in the future. Low (as opposed to zero or negative) inflation may reduce the severity of economic recessions by enabling the labor market to adjust more quickly in a downturn, and reducing the risk that a liquidity trap prevents monetary policy from stabilizing the economy. The task of keeping the rate of inflation low and stable is usually given to monetary authorities. Generally, these monetary authorities are the central banks that control the size of the money supply through the setting of interest rates, through open market operations, and through the setting of banking reserve requirements. Types of Inflation Demand-pull The most important inflation is called demand-pull or excess demand inflation. It occurs when the total demand for goods and services in an economy exceeds the supply available, so the prices for such goods and services rise in the economy. Cost-push inflation The name indicates the cause i.e. costs of production rise, for one reason or another, and forces up the prices of finished goods and services. Often a rise in wages in surplus of any gains in labor yield is what raises unit costs of production and thus raises prices. This is less common than demand-pull, but can occur independently as well as in combination with it. Pricing power inflation It occurs whenever businesses in general make a decision to boost their prices to boost their profit margins. This does not occur normally in recessions but when the economy is booming and sales are strong. Causes of Inflation There are many causes for inflation, depending on a number of factors. Excess money printing Inflation can happen when governments print an excess of money to deal with a crisis but dont have resources at backed, usually governments are allowed to print only that amount of currency that is equal to gold available to that country. As a result, prices end up rising at an extremely elevated speed to keep up with the currency surplus. In which prices are forced upwards because of a high demand. High Production Cost Another common cause of inflation is a rise in production costs, which leads to an increase in the price of the final product. For example, if raw materials increase in price, this leads to the cost of production increasing which in turn leads to the company increasing prices to maintain steady profits. Rising labor costs can also lead to inflation. International lending and national debts Inflation can also be caused by international lending and national debts. As nations borrow money, they have to deal with interests, which in the end cause prices to rise as a way of keeping up with their debts. Federal taxes Inflation may be caused by federal taxes put on consumer products such as cigarettes or fuel. As the taxes rise, suppliers often pass on the burden to the consumer; however, once prices have increased, they rarely go back, even if the taxes are later reduced. For example a rise in the rate of excise duty on alcohol and cigarettes, an increase in fuel duties or perhaps a rise in the standard rate of Value Added Tax or an extension to the range of products to which VAT is applied. These taxes are levied on producers (suppliers) who, depending on the price elasticity of demand and supply for their products, can opt to pass on the burden of the tax onto consumers. For example, if the government was to choose to levy a new tax on aviation fuel, then this would contribute to a rise in cost-push inflation. Effects of Inflation Most effects of inflation are negative, and can hurt individuals and companies alike, below is a list of negative and positive effects of inflation. Negative Effects Hoarding People will try to get rid of cash before it is devalued, by hoarding food and other commodities creating shortages of the hoarded objects. Increased risk Higher uncertainties: Uncertainties in business always exist, but with inflation risks are very high, because of the flux of prices. Fixed income recipients will be hurt: Because while inflation increases, their income doesnt increase, and therefore their income will have less value over time. Lowers national saving: When there is a high inflation, saving money would mean watching your cash decrease in value day after day, so people tend to spend the cash on something else. Existing creditors will be hurt: Because the value of the money they will receive from their borrowers later will be lower than the money they gave before. Distortion of relative prices: Usually the prices of goods go higher, especially the prices of commodities. Causes an increase in tax bracket People will be taxed a higher percentage if their income increases following an inflation increase. Causes business life cycles: Many companies will have to go out of business because of the losses they incurred from inflation and its effects). Positive Effects It can benefit the inflators (those responsible for the inflation) It can benefit early and first recipients of the inflated money (because the negative effects of inflation are not there yet). It can benefit the cartels (it benefits big cartels, destroys small sellers, and can cause price control set by the cartels for their own benefits). It might relatively benefit borrowers who will have to pay the same amount of money they borrowed (+ fixed interests), but the inflation could be higher than the interests; therefore they will be paying less money back. (example, you borrowed $1000 in 2008 with a 5% fixed interest rate and you paid it back in full in 2010, lets assume the inflation rate for 2005, 2006 and 2007 has been 13%, and borrower was charged 5% of interests, but in actual borrower earning 8% of interests, because 13% (inflation rate) 5% (interests) = 8% profit, which means you have paid only around 65- 70% of the real value in the 3 years. The first three effects are only positive to a few elite, and therefore might not be considered positive by the general public. Surviving in inflation Be wise when holding cash, whether in your home or in your savings account, if youre earning 5% interest on the money you have in your bank, and inflation rate is 10% then youre in reality losing 5% and not earning anything. Be vigilant when buying bonds, high inflation rates completely destroy the value of long-term bonds. Invest in durable goods or commodities rather than in money. Invest in things that going to be used anyway and will serve for a long time. Invest for long-term capital gains, because short term investments tend to give misleading results or sense of making profits while in reality its resulting in loss. Manage wisely recurring monthly bills such as (phone bills, cable TV), it would help to reduce them or eliminate some of them. Ask yourself, do I really need these things Im spending my money on? Think how much and how often you will need something before buying it. Use the money saving tips such as: you need to reduce your consumption of things that are rising rapidly in price (e.g, gas) without having to reduce your consumption of goods that are rising less rapidly or even falling in price (eg, clothes). Buy only what is need, especially objects that have multi-tasks, and are considered durable goods. Causes of Inflation In Pakistan Several supply and demand factors could be responsible for this surge in inflation. Supply-side shocks If occurs can cause large fluctuations in food and oil prices, which impacts over all inflation, at times, can be so extreme that these cannot be countered through demand management, including monetary policy. Increased domestic demand Increased domestic demand can create an output gap, putting upward pressure on prices. Growth in private consumption on the average remained over 10 % between fiscal year 2004 and 2006, depicting signs of demand side pressures on price level. The relationship between growth and inflation depends on the state of the economy. High growth, without an increase in inflation, is possible if the productive capacity or potential output of the economy is growing enough to keep pace with demand. A prolonged phase of rising inflation in such a case can have severe consequences for the economy. Rising trade deficit The prospect effect is very important since there is a danger that the current high rate of inflation can get locked into expectations of inflation. People expect higher salaries to compensate for intended increase in prices, speculation in asset prices increases, credit meant for manufacturing sector diverts to real estate and stock markets, and hoarders, profit and rent seekers become active in expectation of high price in the future. All this can have devastating effect for the prices. Fiscal policy remained expansionary Fiscal policy has remained expansionary in the last few years. Expansionary fiscal policy fuels domestic demand and puts pressure on the current account deficit. It widens the investment-saving gap, which has to be financed externally. Financing of fiscal deficit through money creation adds to inflationary pressures. Increased government borrowing from central bank can have serious consequences for general price level. Expansionary monetary policy The expansionary monetary policy- high growth in money supply and loose credit policy- was believed to be contributing to high inflation. Although expansion of credit is usual in expanding economies, excessive credit growth can have adverse effects on real variables. Increase in import prices Increasing import prices are also considered an important factor for inflation. Exchange rate, if depreciating can also put upward pressure on price level. Increase in prices of goods, such as petrol, raw material etc makes our imports costlier, impacting on cost of production. Indirect taxes Indirect taxes are also blamed as the main cause of inflation. The indirect taxes, such as sales tax and excise duties raise the prices of consumer goods. This creates inflationary pressure. contarary, direct taxes reduce the take-home income and have anti-inflationary effect. A substantial increase in support price of wheat is estimated to have an inflationary effect on consumer prices, particularly food prices. This effect is due to the fact that wheat and wheat-related products account for 5.1 per cent of the CPI basket. Measuring Inflation Four different price indices are used in Pakistan over the course of fiscal year, namely: the Consumer Price Index (CPI), the Wholesale Price Index (WPI), the Sensitive Price Index (SPI) and the GDP deflator. The CPI is the main measure of price changes at the retail level. It covers the retail prices of 374 items in 35 major cities and reflects roughly the changes in the cost of living of urban areas. The WPI is designed for those items which are of day to day use on the primary and secondary level; these prices are collected from wholesale markets as well as from manufacturers. The WPI covers the wholesale price of 106 commodities prevailing in 18 major cities of Pakistan. The SPI shows the weekly change of price of 53 selected items of daily use consumed by those households The SPI is based on the prices prevailing in 17+ major cities and is computed for the basket of commodities being consumed by the households belonging to all income groups combined. In Pakistan, the main focus is placed on the CPI as a measure of inflation as it represents more with a wider coverage of more than 374 items in 71 markets of 35 cities around the country. As such, the change in CPI becomes an indicator of the inflation that affects all of us. WPI indicates the change in wholesale prices which affects businesses and industries. And SPI that covers a limited number of essential items of daily use including food and fuel can be termed as the inflation for the poor. CPI Analysis from 2008 to 2012 In March 2012 inflation rate in Pakistan was reported to be 10.8%. From 2003 until 2010, the average inflation rate in Pakistan was 10.15 percent reaching an all time height of 25.33 percent in August of 2008 and a record low of 1.41 percent in July of 2003. Controling Inflation To reduce our Government Luxury Expenses both Federal and Provincial. To reassess the complete system of Direct and Indirect Taxes. To increase the Production of Food, Industry and Service things. Take benefit to public in shape of (Oil Petrol is low than reduce the prices) Reduce Unemployment Increase in Agriculture, industry Monopoly Control System should be work accurately SBP should take major steps to control inflation Conclusion Inflation impacts the multiple sectors of the economy (impact on the distribution of income and wealth, impact on production, impact on the Government, impact on the Balance of Payment, impact on Monetary Policy, impact on Social Sector, impact on Political environment) and different classes of the people (Debtors Creditors, Salaried Class, Wages earners, Fixed income group, Investors and shareholders, Businessmen, Agriculturists). A reasonable rate of inflation of around 3- 6 per cent is often viewed to have positive effects on the national economy as it encourages investment and production and allows growth in wages. When inflation crosses reasonable limits, it has negative effects. It reduces the value of money, resulting in uncertainty of the value of gains and losses of borrowers, lenders, and buyers and sellers. The increasing uncertainty discourages saving and investment. Not only can high inflation grind down the gains from growth, it also makes the poor worse off and widens the gap between the rich and the poor. If much of the inflation comes from increase in food prices, it hurts poor more since over half of family budget of the low wage earners goes for food. Second, it redistributes income from fixed income earners (for instance pensioners) to owners of assets and earners of large and variable income, such as profits. For Pakistans economy, inflation can be bad if it crosses the threshold of six per cent, and can be extremely harmful if it crosses the double digit level. Several supply and demand factors could be responsible for this surge in inflation. Supply-side shocks can cause large fluctuations in food and oil prices, effects of which on overall inflation, at times, can be so excessive that these cannot be countered through demand management.

Emotional and Moral Development

Developmental psychologists recognized that when an individual begins life, we are all amoral or in other words, an individual do not yet have the rudiments of moral judgment.   By the time an individual becomes adults, however, he/she may possess a complex notion of morality.   Morality is defined by most psychology books is a system of personal values and judgments about the fundamental rightness or wrongness of acts, and of an individual’s obligations to behave in just ways that do not interfere with the rights of others. Moral development on the other hand, is the acquisition of moral standards and the ability to make judgments.   But how do an individual evolve from amoral to moral, from a total lack of understanding on responsibilities to a complex perception of right and wrong? This question has occupied the attention of many developmental psychologists.   The two most influential psychological researchers on moral development were Lawrence Kohlberg and Piaget as Kohlberg’s research on moral development was heavily influenced by Piaget`s cognitive development. According to Kohlberg, people progress through stages in the development of moral reasoning. I would like to choose the children, adolescence, and adulthood emotional and moral-related life events and apply understanding of emotional and moral development. Moral development in Children.   Piaget (1975) called the first period in a child’s moral development as moral realism. Before the age of seven or eight, the child has little concern for the reason that specific behaviors are allowed or forbidden; he is a self-centered creature, and his mind does not seem flexible enough to fully comprehend the violation of rules as an interference with others (which theoretically, provides the basis for morality). Another label for the early moral realism period is the rules stage, a term that suggests that a child blindly follows rules without reason or unreasoning adherence to authority.  Ã‚  Ã‚  Ã‚   For Kohlberg, this stage of moral development is known as preconventional morality that is exemplified by most children at the preschool years (Fischer, 1993). Preconventional morality is a kind of self-serving approach to right and wrong where children tend to behave in certain ways in order to avoid being punished and in certain ways to obtain rewards.   In his longitudinal study of moral judgment, Kohlberg (1976) reinterviewed several children at different points in time.   At age 8, John, one of the participants, was asked, â€Å"Why shouldn’t you steal from a store?† John’s preconventional response was:   It’s not good to steal from the store.   It’s against the law.   Someone could see you and call the police† (Kohlberg, 1976). At this lowest level of moral development, children have not internalized a personal code of morality.   Rather, they are molded by the standards of adult caregivers and the consequences of adhering to or rejecting these rules. Moral development during Adolescence.   It is during early adolescence stage that a person’s sense of right and wrong typically matures to the level of conventional morality as Kohlberg calls it.   Conventional morality is the level shown by most adolescents and some adults (Colby et al., 1983). Maintaining conventional expectations has a moral value in its own right.   From Kohlberg`s (1976) study; at age 17, John’s conventional-level response to the question about stealing from a store was:   â€Å" It’s a matter of law.   It’s one of our rules that were trying to help to protect everyone. It’s something that’s needed in our society.   If we didn’t have these laws, people would steal, they wouldn’t have to work for a living.  Ã‚   Here, the motivating force behind behaving in a just or moral fashion is the desire either to help others and gain their approval or to help maintain the social order.   Individuals at the conventional level make moral judgments on the basis of expectations – those of the family, the social group, or the nation at large. As young adolescents progress through these stages, they begin to internalize the moral standards of valued adult or role models. Moral development in Adulthood.  Ã‚   The next level of moral judgment is postconventional level and only a few individuals may progress to this final level. Though a person may progress from conventional to postconventional level any time during adolescence, Kohlberg maintained that only about 25 percent of adults in the world progress beyond the conventional level, and most of these individuals do so sometime during their adult years. Moral judgments at the postconventional level transcend the authority of persons or conformity to groups.   Now, values and principles guide moral judgments.   Individuals at this level may understand and accept society’s rules and laws but tend to view them in terms of the underlying principles.   Postconventional morality affirms people’s agreed-upon rights and exhibited in such statements as; â€Å"People have a right to live†, â€Å"If you steal the drug, you won’t lived up to your own ideals†. Hence it affirms values agreed on by society, including individual’s rights and the need for democratically determined rules and guided by universal ethical principles in which they do what they think is right as a matter of conscience, even if their acts conflict with society’s rules.   As stated, not many people reach this level of moral reasoning. Only those who develop the abstract reasoning of formal operational thought may come to this level. Hence the exact nature of the stages and their sequence in moral development of an individual remain an open question. But one thing is clear though, that moral development is not fixed at adolescence, but rather continues throughout adulthood.   Also, how quickly and how far people progress in moral development depends on a number of factors, including their cognitive development.   One thing is certain though, that moral judgment and moral behavior are important aspects of an individual’s personality development. References Colby, A., Kohlberg, L.,Gibbs, J., & Lieberman, M. (1983).   A longitudinal study of moral development.   Monographs of the Society for Research in Child Development, 48 (1-2, Serial No. 200). Fisher, K.W. (1993).   Commentary:   Illuminating the processes of moral development. Monographs of the Society for Research in Child Development, 48 (1-2, Serial No. 200). Kohlberg, L. (1976).   Moral stages and moralization:   The cognitive-developmental approach.   In T. Lickona (Ed.), Moral development and behavior:   Theory, research and social issues. New York:   Holt, Rinehart, Winston. Piaget, J. (1975). The moral judgment of the child.   New York:   The Free Press.                                                                           

Community Education Officer and Inclusion - 1912 Words

In order to understand the principles of inclusion and organisational structures which are in place within different professional contexts, it is important to expand on personal understanding of a variety of reflective learning models, as well as increasing awareness of inclusion and the diverse range of values which are contained within different ideologies of inclusive practices. Reflection on personal understanding of professional contexts and the variety of personal attributes which are required in order to develop and deliver to service users is equally important. Personal knowledge as well as being mindful of factors which can be further developed or improved upon will enable successful awareness of any primary issues of professional†¦show more content†¦To conclude our learning, from the reflections we have made individually, we should keep these in mind within future forms of professional practice, for example, when we attend an interview in later life. Finally, usin g active experimentation in order to plan for the future and, in effect, practice our reflections and what we have learnt from them to successfully better ourselves professionally (Davies, C, unknown) The role of a Community Education Officer involves encouraging â€Å"educational and developmental activities to all members of the community, regardless of age.† AGCAS (2012). There are a variety of professional attributes which are required in order to qualify for this occupation and perform within the role to the best of ones personal ability, and, as with all occupations there will be aspects of the job in which, as a professional you can use to reflect and improve upon in the future. 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Fazal Ihsan Pattathil. Mrs. Ramsey. English I. 05 May 2017.

Fazal Ihsan Pattathil Mrs. Ramsey English I 05 May 2017 Feminist Movement Pros/Cons In the 1960’s women in America were expected to marry in their early 20’s and start a family. Back then not many women worked, most stayed at home and took care of the children. Now, in the year 2017, women have equal rights to men and are now a very important part of the workforce. Although the Feminist movement is giving women equal treatment to men there are also feminists who believe that women should be indistinguishable to men, this form of radical feminism is harmful for it gives feminists a bad name. Men and women should be equal under law even though their obvious biological differences. But, in other parts of life, it must be known that men and†¦show more content†¦Radical Feminism has created an area of unsureness of what is permissible to say to a female. Is it okay to compliment a woman on her dress, or is that considered sexual harassment? This is why most choose words carefully when complimenting a woman. There are certain compliments are offensive to women without any discussion. These types of compliments often use phrases like, â€Å"even though you are woman† or â€Å"despite being a woman† these compliments are offensive because they suggest that being a woman is a setback and that women are less capable than men at accomplishing something. On Sunday, June 7, 2015 Indian Prime Minister Narendra Modi caused an uproar on twitter when he â€Å"complimented† the Prime Minister of Bangladesh on her stance on terrorism by saying, â€Å"I am happy that, she, despite being a woman, has declared zero tolerance for terrorism.† Women all over the world who were rightfully outraged by Modi’s comment that it’s unusual for a woman to make a firm statement against terrorism. Supposed compliments, like Modi’s â€Å"despite being a woman† comment, are more than just rude. They perpetuate damaging stereotypes about what it means to be a woman , and indirectly tell women that, whatever their accomplishments are, they will continue to be seen as female first, and as professionals second. Although feminism has it’s bad parts, the feminist movement was a very liberating for women who had to stay home and where required to be married to own land. wives bore the