Last updated: July 18, 2019
Topic: FinanceInvesting
Sample donated:

Econ3of6 Essay, Research Paper

Economics & # 8211 ; Traffic Congestion metropolis jobs traffic street transit Gondomar and Bayona National Income1.Traffic Conjestion If a metropolis council faces terrible jobs with trafficcongestion, a cognition will profit all parties. It is this I willdebate in the lines to come. When traffic is a job in a metropolis, all kinds of agencies oftransportation can be included, but it is chiefly autos which seem tobe the job. Therefor raising gasolin monetary values ( by seting anextra revenue enhancement on them ) should instinctively cut down auto use, seeingthat costs for the driver would travel up. This is though merely thecase, if demand for gasolin is inelastic ( fig. 1 ) . Here a revenue enhancement ongasoling has moved the supply curve to S2 and the monetary value to P2, which has lead the measure demanded from Q to Q2. The differencebetween Q and Q2 is the necessity of the diagram, and it is clearthat there has merely been a really small lessening in quantitydemanded. On fig. 2 demand is elastic, and once more a revenue enhancement on gasolinhas been introduced, traveling the supply curve to S2 and incresingthe monetary value to P2, which so has decreased the measure demanded toQ2. Here the difference on measure is great. It is now easy to reason that if demand for gasolin isinelastic, about the same will be bought, and there will be hardlyany lessening in traffic congestion. If demand is elastic, quantitydemanded will travel down and so will caruse in general taking to afall in traffic congestion in the metropolis Centre. 3. Gondomar and Bayona If maximal growing rate is a coveted end, the proportion acountry spends on consumer goods or investing is extremely relevant. In the undermentioned I will sketch the differences between the twocountries Bayona and Gondomar. Gondomar has chosen to hold a high proportion of its N.I. pass on investing. If this investing goes into mills andbusinesses, the investing could turn out to profit Gondomar in avery positive manner. N.I. will travel up, and therefor the mean GDP Pr

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caput will travel up every bit good. T

his leads to better standard of living. Drawbacks which must also be kept in mind is worsening of nature,pollution, and other external social costs the society will have tolive under. Bayonas approach is much more passive, in the sense that shedoes not strive to achieve growth in the same way as Gondomar. Thespending on money here is mainly spend on consumption, which meansthe economy is more focused on import. If relatively is beingproduced, N.I. will go down and standards of living will go withit. Overall it is clear that a policy which focuses on investmentrather than consumption, is more likely to benefit on longterms. 4. National Income Several problems occur when trying to meassure nationalincome. Even if many factors have to be considered before arrivingat a result. The first problem which comes to mind, when consideringproblems, is the fact that the data collected could easily beunexact. For example is there a very large informal sector in manyunderdevoped countries. This informal sector includes everythingfrom theft to prostetution. All of this activity is very difficultto anthing but an estimate of. The informal sector does not includefarmers providing for themselves, but this is also unrecorded, andshould not be left out, when calculating N.I. Meassuring breadwhich is sold, is realtively easy, while services and certaincommodities, usually within the public sector, do not have a price. Here productivity will tend more to an estimate, than an excactvalue, when adding this number up to N.I.Finnally when the N.I. has been added up, there is a final problem. N.I. is usually only helpful when used to compare with othercountries economy, and therefor the various N.I.’s have to beexchanged on paper to a common currency (usually the dollar) forbetter comparison. Here the value of N.I. will natuurally varyaccording to the exchange rate, and not the productivity. Concludingly, it should be stated that all of the abovevritirias should be met when calculating N.I. if a correct figureis desired.