Relationship between money supply and the inflation Essay

Relationship between money supply and the inflation - Essay Example However, when the government securities are purchased from the market, central bank actually inject money into the market thus increasing the money supply in the economy. (Mankiw, 2008) Another important method through which money supply can be controlled in the economy is the adjustment in the discount rate. Discount rate is the interest rate at which central bank lends to other banks and is also serves as the primary rate in any economy. When discount rate is increased, central bank therefore invariably makes it difficult for the households and firms to obtain the obtain money at relatively cheaper rates thus making borrowing costly. A decrease in the discount rates otherwise because by reducing the rate, central bank makes it easier for the firms and the households to borrow money easily. (Sloman, & Garratt.2010). Inflation and money supply Inflation is an increase in the general price level in the economy and signifies a reduction in the purchasing power of the money. Normally in flation is measured through a consumer price index where the prices of a fixed basket of goods and services are compared with the prices of the same basket of goods and services at a give base year. An increase in the prices as compared to the base year therefore is considered as an increase in the inflation and hence erosion in the purchasing power of money. A decrease in the purchasing power would mean money would buy fewer things. (Krugman & Wells, 2009) According to the classical economics, an increase in the money supply actually does not result into an equal increase in the aggregate demand for goods and services. As such any change in the money supply will... This paper outlines the relationship between aggregate money supply and the growth of the real GDP and overall level of prices in the economy. One of the central debates in monetary economics rests upon the neutrality of money and whether money can actually result into the development of price increase or not. This debate is also based on the notion that the central bank of a country actually does not have any role in contributing towards the economic growth because money actually remains neutral and does not result into the growth. Moreover, it is argued that the higher money supply can result into higher prices and thus if money supply is increased, it will create inflation in the economy and will hurt the real economic growth. This is because of the fact that higher inflation level decreases the purchasing power of money quickly. In order to achieve objectives of the economic growth and price stability, central bank adapts different tools and techniques which help it to control the money supply in the economy. One of the most commonly used methods is the open market operations under which central bank actually purchases or sells the government securities in the market. Another important method through which money supply can be controlled in the economy is the adjustment in the discount rate. According to the classical economics, an increase in the money supply actually does not result into an equal increase in the aggregate demand for goods and services. Classical economists also argue in such situation an increase in the money supply would result into inflation. At the full equilibrium level, a positive change in the money supply would result into inflation and the negative growth rates.

The Minimum Wage Must Be Increased Essay -- Federal Minimum Wage

"No family gets rich from earning the minimum wage. In fact, the current minimum wage does not even lift a family out of poverty." -- Jon Corzine Many people can think back and remember what it was like to put in an application for that first job and be presented with a position. Taking that position represents adulthood and is a very exciting time for a young person. All first jobs usually start with a minimum wage. Minimum wage is the minimum an employer has to pay an unskilled worker based on the regulations set forth by the Fair Labor Standards Act (FLSA) that was originally established in 1938. As people think back about their first jobs they can also remember what the minimum wage was when they took that position. Minimum wage is only increased based on the cost of living from the prior year. If the previous year shows an increase then the minimum wage will increase in the coming new year. Sinegal (2009) stated "The increase in the minimum wage is long overdue. Paying your employees well is not only the right thing to do but it makes for good business". Based on the cost of living we show for the year of 2009 minimum wage will not increase for 2010. Minimum wage is currently at $7.25 per hour. Most people who start at this rate are young people who are in high school or college and are working a few hours to help pay for school. After they graduate they can apply for better jobs and move on. People who live in areas without growth, single mothers trying to raise their children, and uneducated people are working more than one minimum wage job to make enough money to pay their financial obligations. While the cost of living did not increase, minimum wage is low because no increase is planned for 2010 a... ...year’s cost of living. What constitutes cost of living to the federal government and it that assessment being addressed fairly? Minimum wage is too low. The federal government must raise the minimum wage so that the average American will not need to continue to work multiple jobs. References The Department of Labor. (2010). Compliance Assistance - Fair Labor Standards Act (FLSA). Retrieved from http://www.dol.gov/whd/flsa/index.htm The Department of Labor. (2010). [Graph Table State Minimum Wage] Fair Labor Standards Act (FLSA) Retrieved from http://www.dol.gov/whd/minwage/america.htm About.com US Government Info. (2009). The Federal Minimum Wage. Retrieved from http://usgovinfo.about.com/blminimumwage.htm Sinegal, J. (2009). Business for Fair Minimum Wage. Quotable Quotes. Retrieved from http://www.businessforafairminimumwage.org/Quotes

A Day When Everything Went Worng Essay

I just cannot think myself lucky when a day of my life goes totally wrong. Recently after starting university a day made me totally upset and frustrated. It was a normal day but my mobile did not give any alarm in the morning so I woke up late. While I was in hurry for university my mother told me that our driver did not come today so I had to go alone. I lived in Dhanmondi and the university was in Bashundhara so I had to take a CNG for university. As soon as I reached Nabisco the CNG had stopped. I asked what happened to the CNG driver. He answered me that the gas was finished and he had to refill it now. As I was late before I just came out from the CNG and hired another one. Finally I reached to the university but it was 10 minutes late. I saw that everyone was writing in the class. When I asked what was going on, they replied me that miss was taking a surprise test. My heart was biting fast but when I heard about the test it started biting faster. After the class I went to the cafe for a cold drink but I found that I had only 50 taka with me. See more: Defining research problem and setting objectives Essay Then I remembered that in harry I forget to take money from mother for CNG rent and I already paid 180 taka to the CNG when I came here. So, I had no money for food at the same time no money for further CNG rent. I had to take bus for home but I never had a bus ride alone before. After asking some of my friends I got an idea about the bus counter here. Then I went there and took a bus. When I heard the bus conductor was screaming ‘New Market’, I found that I was in the wrong bus. This bus was in new market but I should take a bus which had a stoppage in Kolabagan. Since I had nothing to do, I had to get off in new market and took a rickshaw. When finally I was in home it was 6 pm. As long as I met with my mom I saw she was getting ready for going out and she was looking tensed. I asked her what happened. She answered me that one of my aunts was in hospital and maybe she had cancer. I just suddenly became blank. What should I do now? After a while I decided to go with my mom. We were there in the hospital till late night. When I reached home I thought about the whole day and marked it as a totally wrong day of my life.

Authorship debate Essay - 1599 Words

William Shakespeare’s works being just that is a notion most accept; however, there has been a lot of evidence and arguments by historians, who opt to challenge this notion, arguing that Shakespeare was the pen name of Edward de Vere, the Earl of Oxford had to conceal his authorship for social and political reasons. After careful examination of historian’s evidence this theory doesn’t measure up and it was indeed Shakespeare, who was the genuine author. The world has come to accept that William Shakespeare was born in Stratford-upon-Avon, England, during the year of 1564. The register of Holy trinity, the parish church in Stratford, records his baptism on April 26. According to the custom at the time, infants were baptized about three†¦show more content†¦Shakespeare even went on to become a shareholder in the Lord Chamberlain’s Men-the most popular company in London-a Company that he also acted in. They performed for the Queen [Elizabeth]. Shakespeare also wrote plays for his company, which took up the majority of his time; however he managed to become a sharer in the Globe Theater and was expected to help in staging the plays. From 1594 till 1608 he was fully involved the London theater world; in addition he was pumping out the average of two plays a year for his company. Shake as writer was ranked as London’s most popular playwright, based on the number of times his plays were performed and published (World Book 346). His hard work made him very successful, he purchased New Place, one of the largest houses in Stratford-on-Avon. Shakespeares heart was always at home in Stratford despite his busy life in London away from his family. Shakespeare would also go on to purchase other real estate in Stratford and London. In 1603, Queen Elizabeth I died and was succeeded by her cousin James VI of Scotland. As kind of England, he became James I. King James I changed the Lord Chamberlains Men into the Kings Men (World Book 346). William Shakespeare would semi-retire from London life some time around 1610 (Reedy and Kathman). Before this paper goes on to talk about the authorship debate of Shakespeare it is necessary to know what Shakespeare’s London was like during theShow MoreRelatedEssay about The Shakespeare Authorship Debate1632 Words   |  7 PagesThe Shakespeare Authorship Debate Although William Shakespeare is considered to be one of the most revered and well-renowned authors of all time, controversy surrounds the belief that he actually produced his own literary works. Some rumors even go so far as to question the reality of such a one, William Shakespeare, brought on by paralleling the quality of his pieces with his personal background and education. 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