The relationship between money supply and inflation

Introduction The current globalisation rate has led to many changes and effects on the value of most resources and especially the financial resources. The world’s population is increasing at a fast rate while on the other hand resources are being depleted without being replenished thus causing scarcity.Advertising We will write a custom essay sample on The relationship between money supply and inflation specifically for you for only $16.05 $11/page Learn More As a result, economic crisis have occurred which have as well affected the living standards of a better part of the world’s population (Hardwick, 2002, p.176). Among the common effects are the high inflation and the amount of money supplied. Economists have however established the rate of Inflation and the money supply of a nation are correlated with one leading to another. This paper is therefore an analysis of the relationship between the inflation rate and money supply. Inflation In flation is said to be the increase in the prices of commodities and services in a given economy. This makes the people buy less since their purchasing power goes down as a result of the lower value of the currency. Inflation rates of most countries keep fluctuating but their central banks try to keep the rates at a range of about two to three percent. The consumer price index is what is used to measure the inflation rates of an economy. It has been theoretically argued that inflation is caused by an increase in money supply in the economy (Hall and Taylor, 1997, p.637). Money Supply Money supply is an economic term which refers to the amount of money circulating in an economy. The central bank is bestowed with controlling the money supply of a country through regulation of the circulation (Williams, 2008, p.1). Money supply can be measured by looking at the value of currency, bills, credit, loans as well as other liquid instruments in an economy. The Relationship between money suppl y and inflation Economists have suggested that there is a high degree of correlation between the inflation rate and money supply in an economy. To begin with is the fact that when the money supply is high the demand for money goes down.Advertising Looking for essay on business economics? Let's see if we can help you! Get your first paper with 15% OFF Learn More This is because people are able to afford even the high priced commodities and services that they could not have initially afforded (Mishkin, 1995, p.89). It can thus be depicted that an upward supply of money in the economy results to inflation according to the graph shown below. (McMahon, 2009, p.1) A look at the graph at first glance does not show any instances of correlation however after the introduction of a time lag in which the two occur a situation of relationship is then established. This time lag is the difference in time between changes in the money supply and the changes in the inflation rates. Th us, the relationship occurs after a period of time as it can be depicted on the graph in the years 1990, 1996, 2000 and 2001 among others. This can be practically explained in a situation whereby the people of a given small town are given the opportunity to raise a higher income than they would have before in a month. They would thus shift from using gasoline to gas as their source of fuel which costs higher. This is because in real sense, the gas will cost proportionally lower than the price they were paying for gasoline before the increase in income. As a result, the market will bear high prices for commodities and services leading to inflation which has come about due to increased money supply (Williams, 2008, p.1). The relationship between inflation rates and money supply can be differently explained using different economic theories. The Monetary theory explains that money supply is the most significant factor that leads to incidences of inflation in an economy.Advertising We will write a custom essay sample on The relationship between money supply and inflation specifically for you for only $16.05 $11/page Learn More Quoting the words of a renowned monetarist by the name Milton Friedman, he said, â€Å"Inflation is always and everywhere a monetary phenomenon† (Williams, 2008, p.1). Thus according to empirical studies conducted by most historical monetarists, it can be asserted that inflation is a monetary phenomenon. This is in accordance to the equation; MV= PQ Where; M is the nominal value of money (money supply) V is the money velocity P is the price level Q is the real value index (Transactions) From the above equation, monetarists argue that the money velocity is not affected by changes in the money supply in the long-run (Mankiw, 2002, p.153). Therefore the output is highly dependent on the productivity of the economy.Advertising Looking for essay on business economics? Let's see if we can help you! Get your first paper with 15% OFF Learn More Working with these assumptions it can be said that changes in price are dependent on the changes in the quantity of money in the economy thus the money supply. The chart below derived from the above equation shows the differences in inflation reflected by CPI and the money supply reflected as M2. Fig. A chart showing the relationship between inflation and money supply (Burda and Wyplosz, 1997, p. 267) According to the Keynesian theory, there still exists a relationship between money supply and inflation. However, they argue that money supply is not the only big factor that causes inflation as there are also other contributing factors. The Keynesians emphasize that aggregate demand is the main reason behind inflation and thus regulating the aggregate demands in periods of recessions and economic expansions helps stabilize the inflation rates as well. Nevertheless, the relationship comes about as aggregate demand is effectively controlled using economic instruments such as monetary p olicy and fiscal policy (Burda and Wyplosz, 1997, p. 275) Conclusion From the above discussion, it can be concluded that there is indeed a great correlation between money supply and inflation rates of an economy. It is evidenced that changing the money supply through the central banks leads to a control of the inflationary situations in the same economy. For instance, a country with high inflation rates and willing to lower them, they will do this through the operations of the central bank whereby the lending rates and the interest rates will be increased to reduce the amount f money leaving the bank (Baumol and Blinder, 2006, p.109). As a matter of fact, people will rush to deposit the cash they have so that it can earn as much interest as possible. This will in turn reduce the amount of money circulating in the region hence reducing the inflation rates as well. In a situation of deflation the vice versa will be applied where the central bank will reduce the lending rates and inter est rates so as to enable flow of money into the economy (Baumol and Blinder, 2006, p.109). The control between money supply and inflation rates is thus operated using the federal banking system of the central bank of the region. Reference List Baumol, W. and Blinder, A. (2006). Macroeconomics: Principles and Policy, Tenth edition. Thomson South-Western. Burda, M. and Wyplosz, C. (1997). Macroeconomics: a European text. Oxford [Oxfordshire]: Oxford University Press. Hall, R. and Taylor, J. (1993). Macroeconomics. New York: W.W. Norton. Hardwick, P. (2002). Introduction to modern economics, prentice hall publishers, New York. Mankiw, N. (2002). Macroeconomics (5th Ed.). Worth. McMahon, T. (2009). Money Supply and Inflation. Available from https://inflationdata.com/inflation/Inflation/Money_Supply_and_Inflation.asp . Mishkin, F. (1995). The Economics of Money, Banking, and Financial Markets, New York, Harper Collins. Williams, J. (2008). Money Supply Special Report. Available from   http://www.shadowstats.com/article/money-supply . This essay on The relationship between money supply and inflation was written and submitted by user Jaylen Ochoa to help you with your own studies. You are free to use it for research and reference purposes in order to write your own paper; however, you must cite it accordingly. You can donate your paper here.

Computers Are Making Users Sick †Health and Safety Essay

Computers Are Making Users Sick – Health and Safety Essay Free Online Research Papers Computers Are Making Users Sick Health and Safety Essay Almost half of all PC users in the UK have experienced health problems caused by using computers, research has found. According to a poll conducted by computer retailer PC World, eye strain was the most common problem associated with computer use, suffered by 25 per cent of users. About 15 per cent had experienced back pain, while headaches were experienced by 14 per cent of users. Of those surveyed, 11 per cent cited wrist pain and 10 per cent shoulder pain caused by prolonged PC use. A PC World representative said that health and safety guidelines introduced in UK businesses had not trickled down to home users. â€Å"It’s too easy to compromise your health. Adopting a simple routine of looking up, easing up or stretching and ultimately getting away from the PC can help you to avoid some of the aches and pains caused by extended use,† he said. In an average day, 18 per cent of people spend two or more hours using a PC at home, and 15 per cent at work. Two in five respondents took no breaks in two hours of PC usage. Respondents were also asked whether they used any of a range of products including flat-screen monitors, which help minimise eye strain, and ergonomic keyboards and mousemats. The majority of home users, 59 per cent used none of these products, with 54 per cent at work also using none. The most popular product was the mousemat with wrist rest, with 27 per cent of home PC users and 31 per cent at work using these products. Monitor screens designed to minimise glare were used by 14 per cent at home while six per cent were using ergonomic keyboards. In conjunction with the charity AbilityNet, PC World said it would launch a campaign to raise awareness of good computing practice to minimise the health risks associated with PC use.AbilityNet hopes to raise awareness of the health risks of PC use. Research Papers on Computers Are Making Users Sick - Health and Safety EssayInfluences of Socio-Economic Status of Married MalesTwilight of the UAWMarketing of Lifeboy Soap A Unilever ProductGenetic EngineeringThe Project Managment Office SystemNever Been Kicked Out of a Place This NiceIncorporating Risk and Uncertainty Factor in CapitalThe Relationship Between Delinquency and Drug UseHip-Hop is ArtDefinition of Export Quotas

Violence Research Paper Example | Topics and Well Written Essays - 750 words

Violence - Research Paper Example In order to determine whether messages related to spanking should be attributed to influencing parents or caretakers to spank their children whenever they engage in any form of wrong doing, the appropriate study would be to survey parents or caretakers and interview them on the frequency with which they receive messages related to spanking, and whether they consider the messages that they receive while disciplining their children. In this case, once the frequency of spanking is identified based on the messages that parents and caretakers receive, it would be possible to determine if the messages attributed to spanking play an essential role in influencing the spanking mechanisms. Secondly, the data was gathered from mothers only despite the fact that there are other caretakers who play the role of disciplining children. Therefore, the paper should have considered the information from all the caretakers in order to provide room for understanding the context of discipline and informati on sharing in a household. In case the information was gathered from other caretakers or even the fathers to the children, they would provide other information related to their perception towards spanking, and the alternative mechanisms that they adopt in case they oppose spanking as a means of disciplining a child (Walsh, 2000). For instance, the way in which a father can discipline a child is not the way a mother can do it. To investigate how fathers perceive the issue of spanking, the questionnaires should contain questions that target fathers based on how they view spanking differently from mothers. Questions should be raised on the different approaches they adopt to discipline their children, and which they perceive to be different from the ones that their mothers adopt. There are also those children who are kept under the care of their grandparents. Because of their age, they would not be able to undertake spanking like the way the parents of the children do it. They might not even consider spanking at all as this would demand a lot of strain from them. Since the time for recall with respect to how often parents spank their children was more than six months, the mothers could have forgotten the frequency with which they spanked their children. As a result, the time for recall should be reduced significantly so that parents could be able to provide appropriate details based on how often they spank their children. The time for recall in this case should be approximately two months since this would provide room for gathering appropriate details and analysis on whether spanking is adopted on a frequent basis to serve as a way of disciplining the children. While gathering data from a population, it is crucial to consider diverse groups since they would provide room for the generalization of the results that are generated. This would create room for the realization of appropriate results as opposed to considering just a single group from a population. The samp le for the study came primarily from white people that were based in Midwestern cities (Walsh, 2000). This made it difficult to generalize the findings from the study. Therefore, in order to ensure that this issue is addressed, the study should have considered people from various

The Approach of the Law Lords Essay Example | Topics and Well Written Essays - 1750 words

The Approach of the Law Lords - Essay Example When it is impossible to interpret the legislation in a manner that complies with the ECHR, the domestic court must come up with a â€Å"Declaration of Incompatibility†. The point of departure into the enquiry as to whether the Law Lords are now made to legislate human rights is the provision in the Human Rights Act 1998, Section 3 of which reads as follows: â€Å"So far as possible to do so, primary legislation and secondary legislation should be read and given effect in a way which is compatible with Convention rights.† By Convention Rights, one refers to the European Convention on Human Rights, to which the United Kingdom is bound. The crux of the debate is this: does this provision now radically alter the power of Judges, such that they may now effectively ‘legislate’ human rights through interpretation of acts of Parliament? If so, is this change for better or for worse? Observers have noted that â€Å"stocktaking rather than definitive appraisal† (Bonner, et. al., 2003: 549) may be more prudent, given the evolving picture. This paper first looks at the background of Section 3 and how this Section has been developed and crystallised in jurisprudence. After which, this paper shall also argue that this is in consistent with the international obligations of the United Kingdom. Finally, it shall make the argument that the effects of Section 3 is more beneficial than detrimental, in that it establishes with greater certainty the separation between the legislature and the judiciary – a move that complements the recent creation of the Supreme Court as an appellate tribunal over the Law Lords. The main critique, to err on the side of oversimplicity, of those who argue that the Section 3 of the Human Rights Act 1998 is too radical an alteration of the power of judges is that human rights policy in the country will be in the hands of a group of people who were not elected through democratic elections. On the other hand, those who argue for the Human Rights Act, and consequently, the European Convention on Human Rights, state that the imperatives of human rights and justice demand that Parliamentary acts be constantly checked and balanced. Indeed, the requirements of modern governance make it necessary that the branches of government are not given unfettered power and discretion. It goes without saying, for instance, that considerations of peace and order must be weighed against the sacrosanct principles of civil liberties and personal freedoms. Statutory construction Jurisprudence has spoken richly on how to proceed with interpreting legislation in harmony with Article 3. First, it is important to identify the specific statutory provision that is in contravention with the rights under the Human Rights Act (see the case of R v A (No. 2) [2002] 1 AC 45 ). After which, the Court must determine whether or not there is a breach of Convention rights (see the case of Poplar Housing Association v Donaghue [2002 ] QB 48 para 5). The court is then charged with the duty of identifying possible meanings means within the legislation. Jepson states that there are two principal ways by which the

GE case study Essay Example for Free

GE case study Essay GE Oil Gas was established in 2012 when GE Energy was divided into three new business units of General Electric. Prompted by poor financial performance, GE Oil Gas was created in an effort to simplify business and also make General Electric more visible to its shareholders (Working Environment | GE. com, n. d. , p. 1). GE Oil Gas has grown to become one of the key players in the energy sector. Operating in more than 100 countries and employing 43,000 people, GE Oil Gas delivers equipment and services that enable its customers to access and make more efficient use of the world’s energy resources. With a variety of extremely complex technologies fueling numerous industry-milestone projects, GE Oil Gas has helped make it possible to extract reserves in the most remote and extreme locations. One example, the Gorgan Project, is one of the world’s largest natural gas projects and provides energy to most of Western Australia. The Gorgan Project provides insight to some of the staffing challenges facing GE in today’s global and complex energy industry(Introduction Workforce planning in the global oil and gas environment GE Oil Gas | GE Oil Gas case studies, videos, social media and information | Business Case Studies, n.d. , p. 1) . GE Mission and Values Unlike most Fortune 500 companies, GE does not have an official mission statement, rather they represent their mission with the â€Å"GE Works Equation†. As explained by GE, â€Å"We have a relentless drive to invent things that matter: innovations that build, power, move and help cure the world. We make things that very few in the world can, but that everyone needs. This is a source of pride. To our employees and customers, it defines GE. † (General Electric (GE) mission statement 2013 | SM Insight, p. 1). As environmental regulations shift and force the energy sector to evolve, GE is forced to place a large emphasis on environmental standards. The following statement represents GE’s commitment to sound environmental practices. â€Å"GEs unstinted commitment to Environment, Health Safety is a paramount consideration in all its procedural aspects. For, at GE we realize that when it comes to EHS, a clean bill of health is more than a corporate asset; it is a fundamental responsibility to employees and to the environment that we all share,† (Environment Industries | GE Energy, n.d. , p. 1) S. W. O. T. Analysis1 With regards to adequately staffing each position within GE’s complex organization, the following strengths are key to maintaining market share and a competitive edge. †¢Alliances with other strong businesses that are viewed favorably among the masses †¢As a market leader, GE is capable of obtaining the most experienced employees which continue to help GE be a leader in innovation †¢Strong organizational structure and culture †¢Employee base of 323,000 (All of GE) †¢Strong reputation and popular with consumers. †¢Respected Brand Despite having a high market share, GE still faces weaknesses that must be recognized and understood for them to improve their position. They are as follows: †¢GE is 4th highest producer of air and water pollution. †¢History of misleading investors for high returns †¢GE not performing well in Asian Markets †¢Charged by Department of Defense on corrupt practices for jet engine sales to Israel With the energy sector in full speed and booming in most of the world, GE Oil Gas has a vast number of opportunities to improve performance. With an aging workforce, it is critical that GE also capitalize on current opportunities with personnel and training. The following are current opportunities for GE with regards to their workforce. †¢Pursue governmental support (grants/allowances) for training and hiring new employees †¢Focus on corporate social responsibility to gain favor with consumers, potential employees †¢Takeover/Merger opportunities to enter new markets †¢Further utilize RD projects †¢Improve customer service Being such a highly regulated industry, there are a vast number of external threats that face a company such as GE. These external factors need to be recognized and planned for to avoid a disruption in operations. †¢Increased Labor Cost, shortage of skilled workers, and aging workforce †¢Global recession †¢Currency fluctuations due to the number of counties GE is doing business †¢Intense competition in the industry †¢As the 4th largest producer of pollutants, the biggest threat for GE is government regulation on environmental issues Strategy and Organizational Drivers. Workforce planning is becoming more critical for companies such as GE. Workforce planning is essentially a company planning for future labor needs Because operations span across 100+ companies, GE has developed global training centers offering a broad training curriculum to ensure its workforce is abreast to the latest challenges in the energy industry. Despite the shortage of STEM graduates worldwide, GE offers customized leadership programs to younger generations in hopes of developing the next generation of technical experts and managers. Additionally, leadership teams are implemented on most all big projects and are tasked with making key strategic decisions for the organization. At all levels of the organization, those who demonstrate passion and commitment to both high performance and the GE brand can expect to be rewarded with higher positions and more responsibility, Whether it is an HR employee, a scientist, or an engineer, GE seems committed to building and empowering employees(Introduction Workforce planning in the global oil and gas environment GE Oil Gas | GE Oil Gas case studies, videos, social media and information | Business Case Studies, n.d. , p. 2). Improving. The most pressing issues facing GE Oil Gas are the risks of environmental regulation and employing an adequate labor force to cope with the demands of technology advancements. Because of the shortage of skilled professionals, GE should focus heavily on building relationships with the best universities, worldwide, and establishing a presence in the minds of young people interested in STEM careers. GE could begin at even the grade school level by sponsoring science fairs, math and engineering competitions, or any other related activity and provide scholarships to winners. Begin a marketing campaign nationwide that focuses on growing the interest of math and science at a young age. With regards to the environmental issues, strict compliance should be a zero tolerance policy. Bad press can destroy years of good work and potentially cost a company everything. It is vital that companies such as GE are able to adapt to their continually changing landscape, and implement new strategies conducive to growth. In a markets such as oil and gas, it seems like the company that is not growing, is dying. GE has the resources to help ensure they have a future in energy. They must continue to look for initiatives to encourage students to learn about oil and gas. Skilled people are the lifeline of GE.

Why is the Holocaust Still Relevant Today in Wiesels Night Essay

The Holocaust is over and has been for about sixty years, so why are we still talking about it? Why is it still relevant in our world today? The world should have learned from its mistakes, but the sad part is that we did not. No, Hitler is no longer killing millions of innocent men, women, and children, but we are still just still just as cruel only in different ways. Night is Elie Wiesel’s factual account of his experiences in the holocaust. He brings us to a world in which not many people want to go. He tells us the true story of what really happened in Nazi concentration camps. Elie Wiesel, a holocaust survivor chooses to tell his story and begins to teach an entire generation the dangers of ignorance and hatred. Just by telling his story, just by writing it down, Wiesel is helping to educate people about what atrocities happened in the concentration camps. It tells us about how he was stripped down of his human rights. â€Å"A7713?’ ‘That’s me’† (51 Wiesel). Wiesel talks about how he was degraded as a human being. He is not even considered a person anymore. He is dehumanized and reduced to little more than a number. An example of the harshness is the selections, where he saw people who slept beside him the night before, get sentenced to death. He makes it clear that just because you passed an examination, doesn’t mean you’re safe. You might have been lucky this time but there will be a next time and they can just as easily give you death. He is basically saying that if you want to survive, then you had to prove yourself strong and healthy, but basically it was all on luck. This teaches us how cruel the Nazis were to the people in the concentration camps. Every selection would be dreadful and you had no way of knowing wheth... ...spoke about the concentration camps while they were going on, then that could have made the difference. All you really need is one person to start and others will follow. There was a reason why Wiesel made it out of the camps, and millions of others did not. He made a difference. He educated so many people of the pains of the Holocaust. Since we now know about it, we should not be ignorant and pretend that there is no other problems in our world, because there is. Now that we know this and we know what has happened in the past, we should do everything we can to prevent this from happening in the future. We determine the future, we can either ignore the problems of others including in other countries and the same thing might happen to us, or we can choose to do something about it and try to eliminate hatred and make sure that no one will have to experience it again.

Justification Of Location

Latty’s Beauty salon will be located in the town of Cave Valley in the parish of St. Ann. The entrepreneur chooses this location for several reasons, these include the availability of land for the entrepreneur to operate business on, the availability of labour, there are persons searching for such works and this will be of good help to them and also for competition because there is little or no competition thus the business has a advantage to maximize its profits. There are few businesses in the area therefore there is sufficient and suitable space for the business which is affordable. The type of labour needed is both skilled and semi-skilled. This is mainly because the entrepreneur wants to ensure that persons business to the salon is able to work efficiently and effectively. The business will employ a total of seven (7) persons. Four skilled or semi-skilled hair dressers, three skilled nail technicians and one supervisor. The supervisor will monitor the performance of workers to ensure the objectives of the business are met, and motivating workers to stay on the task they are assigned t until the task is accomplished. The reason this type of labour is necessary is to carry out the production process efficiently and is skilled at what they are doing. The supervisor must have at least 2 years’ experience in supervising a business or a salon at that. 2 CXC and a certificate is required by the nail technicians and the hair dressers should be capable of doing the tasks required or a certificate.