aggregate output/income. And another reason-being that, Central bank will attend to bring down inflation by rising interest rate, which will lead to a decline in consumer spending and investment spending. As a result, we will have a recession. On the other hand, Inflation can be damaging to the economic growth since it induces economic agents to divert away their funds from productive activity and productive investment in an attempt to avoid the inflation effects on income (small 1998:37). During inflationary period people get confused and become uncertain about what spend to their money on or where to invest it.
Moreover, it causes inflation and imbalanced economic development in market structures which cause economic delay in growth. This leads to delays in investments and starting of industries. Large scale corruption can hurt the economy and impoverishes the population. Moreover, it reduced tax revenues and government’s ability to finance budget expenditures, which is deficit
The following two years the NASDAQ index had fallen 4900 points to 1200 points. A 75% decrease in value. One of the main reasons for the burst was dot com companies not being able to make profit and going bankrupt. Dot com companies were often invested in even before investors enquired about the business plan. Irrational investors were so blind from the euphoria sweeping the nation from frequency of the dot com companies emerging.
However, I would like to focus on its negative aspects as I strongly believe they overwhelm the positive side. First, shadow economy is aiming for lowering or wiping their revenue out where tax should be paid. It could cause the overall rise of tax or lower quality public services which in result burdens the weaker. Second, the presence of unfair market in the economy could yield a disparity of economy where cannot be controlled by government. This situation widens the gap between the rich and the poor.
Because now you can be fined if you do not have insurance. It has made our taxes go up especially for the wealthy. It is making people lose their jobs and hours because businesses are cutting the worker hours to avoid covering the extra cost of employees insurance. People should not have to pay for health insurance or be threatened with a large fine for not having it. It is intrusive for the government to require you to have insurance.
And an increase in unemployment will lead to an unhappy electorate, which clearly no political party can afford in India. b. To Protect Consumers – A government sometimes levies tariffs as a kind of barrier on certain products if it thinks that the product might endanger its population. i.e. a product which is potentially harmful or erosive to its
The emergence of the massive excess capacity in the some of the main export industries and the decline in the unit values and also the rising rates of interest raised the debt service obligation. The Asian crisis represented a case of the market failure and not of the government failure. The other view of the financial liberalization in Asia is that even though it was a right policy for Asia was not implemented correctly. What weakened the financial systems in Asia, was an inappropriate or disorderly manner of the financial liberalization that did not pay much attention to the proper phasing and sequencing of the capital account
Corruption has been found to be a major obstacle to economic growth (growth of small and medium term enterprise) in developing countries. According to Murphy and Vishny, (1991), Corruption negatively affect the allocation of entrepreneurial talent, when, in highly corrupt environments, entrepreneurs may spend a lot of their time and efforts to obtaining valuable licenses and preferential market access than to improving productivity and this can hinder
Corruption is a misuse of public office for personal advantage and it is often indicative of wider governance issues hurting economic evolution (Zekos, 2004). It can erode the functioning of countries around the world and lower the efficiency of production having a destructive effect on a country’s economic and political system. Governments of the countries need to make themselves engaged in anti-corruption attempts. Corruption introduces disorganizations that reduce ability and performance by limiting the number of bidders, advocating those with inside connections over the ultimate efficient candidates, limiting the information accessibleto participants, and initiating added transactions costs. (Ishola, 2012) Corruption is a socially repulsive, ethically wrong and economically damaging behavior.
the Real Estate industry runs low which will affect the economy of the nation, which leads to inflation and gradual fall in GDP.The Corruption takes place At Different Level.the Government takes a courageous and bold step of demonetization to eliminate inflation, corruption, poverty and to elevate the GDP, But there is corruption at another level because every person starts doing money laundering. Demonetization may cause inconvenience for the first initial days for people have to take numerous rounds to the banks to deposit amount, exchange notes or withdraw the same. The situation turns chaotic if the circulation of new currency gets delayed because of some reasons. Individuals who have upcoming weddings are the ones to make alternative arrangements to make payments .however, the government has given higher withdrawal limits in such