Countries that are developed like the US are richer and they have programs to help the less fortunate to lessen the amount of people in poverty. Income in developed countries determines the standard of living. 9. Why do prices rise when the government prints too much money? The price will raise when a government prints too much money, because the money loses some its value.
These policies have led to higher asset prices - especially bonds and equities - held by wealthy households to a large extent. At the same time, they hurt middle-class savers, who usually rely on traditional savings tools such as bank deposits. With the zero or later interest rate, negative interest rates, these savings have lost their assets as a result. Although average households
b) Slow Industrial Growth Due to use of backward techniques of production our industrial sector is not at developing form. Its fewer production also creates shortage in market and caused of inflation. c) Increase in Wages & Salaries Present era labours are demanding high wages and salaries. Increment in wages and salaries it might be leads to increase in cost that increases the prices. On the other way due to high wages and salaries there is an increment in income and it reason in inflation.
Multiple studies have shown that there is a significant increase in economic inequality over the last 25 years in several regions in the world. Economic inequality is a measurement of the income distribution that puts emphasis on the gap between the incomes of a household or an individual in a certain country. The distribution of income and wealth has become increasingly unequal since 1970 (Morris and Western, 1999). Between 2003 and 2013, income inequality even grew in well developed countries such as Germany, Denmark and Sweden. The top ten percent of earners raced ahead, while the bottom ten percent fell further behind.
Income inequality is refers to the unequal distribution of household and individual income in an uneven manner among a population. From the year of 1980 to 2010, we found that the United States has a relatively high level of income inequality which it faced the greatest economic challenge in the over past decades, the economic pie has indicates that there are a relative gap between the richest people and the poor people in the country. Income inequality has surged as an economic and political issues that leads inequality has poses a major threat in the global issues. Besides, Income inequality has become progressively obvious since in the year of 1980. For example, the distribution of income had 30 to 35% of national income
The most affluent citizens have more influence and they also hold disproportionate political power. In other words, when income distributes unequally and is concentrated in the hands of a small number, political power often skews in favour of these wealthy groups. Owing to this, they can persuade politicians and lawmakers to implement policies that favour them, whether it’s done legally or in corrupt ways, whilst correspondingly hurting the rest of society. For instance, despite having a progressive tax system in America, in which tax rates are larger for high-income earners than it is for others with lower wages, the most prosperous people seem to pay less tax. Consequently, this leads to a reduced amount of tax revenues and less money able to be spent on education, health, transport etc.
inflation is defined as a long term rise in the general level of price for goods or service which caused by the devaluation of currency. The Inflationary problems arise when we experience unexpected inflation which is not totally associated by the rise of households incomes, but if the incomes do not increase as the price of goods increased the people purchasing power will effectively reduce and that may lead to stagnant economy. Moreover, excessive inflation can also effect badly on retirement savings as it reduces the purchasing power of the money that savers and investors have. The two main types of inflation are:- 1- Demand Pull Inflation- this occurs when the economy grows quickly and the aggregate demand (AD) increases at a faster
This means that some individuals will be given more benefits than others in economic resources which may end up in a total decline in economic growth. The decline is also instigated by mismanagement of affairs in politics, for example Zimbabwe started off as a thriving economy but through the mishandling of political affairs and misunderstanding of the economic policies that governed the country, the political decisions taken caused an economic decline. The influence of politics on economics is demonstrated by examples of inflation. If a country is under inflation, the economy is forced to cut down on the budget deficit. Economic development affects the evolution of institutions and political change.
First, the transfer of power from labour to capital soon translated in an analogous transfer of income and wealth within most OECD countries and many developing countries adopting similar policies. The indexes of inequality in the distribution of income started to increase since the late 1970s and continued the upward trend until now. In addition, the increasing inequality often reflected growing poverty also in the richest countries (including the US and many European countries). The neoliberal policies systematically violated the basic conditions of social sustainability during all the period. This failure had a significant impact also on economic sustainability as measured by the growth of GDP.
Inflation is a rate at which general price level increases for goods and services produced in a nation. When inflation exists, the purchasing power of a nations currency declines over time. Inflation not only reduces the level of business investment, but also the efficiency with which productive factors are put to use. The benefits of lowering inflation are great, according to the author Dornbusch, but also dependents on the rate of