From the standpoint of equity, if larger government borrowing means less taxation then it depends upon whether it is direct or indirect taxes which are reduced. A reduction in direct taxes therefore benefit the rich. The financing of interest payments on taxation, however, will represent a transfer of purchasing power from all taxpayers to the richer members of society who owns the securities. This effect will be reduced if some part of the interest payments are themselves financed from
or implicitly in the form of services of money measured in terms of P, and inventories. The demand function for money leads to the conclusion that a increase in the expected yields on different assets decreases the amount of money demanded by a wealth holder, and that a rise in wealth increases the demand for money. The income to which cash balances (M/P) are adjusted is the expected long term level of income rather than the current income being received. Empirical evidence suggests that the income elasticity of demand for money is greater than unity which means that income velocity is decreasing over the long run. This means that the long run demand for money function is constant.
Capitalists, as the ones who possess means of production, hold a significant lead in capitalist economy over laborers who are regarded as the weak. While capitalism sounds attractive due to its purpose to let individuals get paid depends on the work they done and the efforts they put, however, this rule does not always applies to everyone. Capitalism is the system where capital brings more capital. So the people started with larger investment of capital can accumulate money much easily than the people do not. As time goes on, the rich gradually get richer, while the poor are stagnated or even getting poorer.
His stance is in opposition to the position of Richard Posner. And as we know, Richard Posner presents his overall disposition more so in the stance of economic liberalism. He has been very clear about his belief that the best economic decision is one in which the total earning capacity of the economy is maximized even when that earning capacity is mainly held by a single individual. Posner would have strongly argued against the ruling, claiming that an increase in overall profits due to the proposed structural changes of Penn Station would provide a longer-term and greater total benefit to the economy (Leiter 1). Expanding on the benefit of the economy, he suggests that the increase in total earning capacity of the individual owner of Penn station is a better economic investment than the retention of less profitable, albeit more historical, landmarks in the community (Leff, 1).
Wages determine how the total income of an economy is divided among people. The determination of wages in the labor market regulates who is poor and who is rich and are therefore the main cause of economic inequality. Another cause of economic inequality is technology. Our modern day’s economy is based on technological advancements. Labor demand has shifted from low-skilled labor towards high-skilled labor.
The Classical theory states that the higher are income levels, the more savings will become available. On a graph, this means that the supply of money shifts to the right. On the other hand, the Liquidity theory states that the transactionary and precautionary functions are relatively constant but the speculative motive is inversely related to interest rates where the higher the interest rate, the less that a saver will prefer to be liquid in his cash holdings. The Central Bank has the ability to keep the money supply constant and the transactionary and precautionary demand for money is also relatively fixed, the speculative demand increases as income increases. This is so because when the income increases, there are now more funds available for speculative purposes.
The survival of democracy connects between capable people who have the incentives and ability to protect their rights against the dictators. Democracy’s advantages revolve around its ability to improve the certainty and predictability of institutions that establish the framework for the business environment because democracies are accountable to the public rather than the best, they are more likely than autocracies to produce public goods, invest in human capital, and protect the private property rights. Sometimes democracies usually and typically decrease economic growth through their tendency towards compulsory distribution of wealth amongst the citizens of the
“In recent years we have spent more and more money on more and more poverty reduction programs, but seen few, if any, additional gains”, states Michael Tanner (2015) in his policy analysis on guaranteed national income. The guaranteed minimum revenue is defined as an unconditional cash grant paid out to every citizen or resident of a country without means test or work requirement. It is more commonly known as universal basic income (UBI). Since current welfare systems have failed to show progress on the poverty front, the concept of UBI has gained popularity among the entirety of the political spectrum. The motives for replacing the current welfare system with this alternative concept are evident: theoretically, it represents the ideal way
Ram and Zhang (2002) and Duttaray (2008) show that in the long run the repatriation of profits is higher than the positive impact of the initial investment. The negative impacts caused by these outflows of capital, can be extended if these funds are obtained through credits obtained in the host country (Loungani and Razin,
During the 18th and 19th century Mercantilists’ maintained that the way a nation to become rich and powerful was to export more than its import because they believed that nation could gain in trade only at the expense of other nations (i.e. trade was a zero sum game, and exports are greater than