Interesting Facts About Money
The study of economics is quite broad, and there are literally undergraduate courses focused on it, as well as research, and it's well known that the market is constantly changing. Because of this, I'm not planning to study the current market. Right now, I'm exploring some concepts and will share some that I find interesting.
I was looking at how the economy can be measured, the calculation of wealth. The logic boils down to:
- Wealth includes people and assets.
- Both the population and average personal expenses can be estimated.
- Multiplying average expenses by the population yields national income.
- Deducting an estimated amount of rent and profits yields the total value of labor.
- The economy can be measured,
This, of course, is on a simplified individual basis; there are many other variables in this calculation at the national level.
Another point is how united traders conspire to raise prices, through cartels and conclusions. - Competition is key to the efficient functioning of free markets. The presence of multiple producers in a market encourages production and keeps prices low, as each competes to attract customers. If there is a supplier—a monopoly—it can choose to restrict its production and charge high prices. An example would be some items in the food industry.
Between these two extremes is an oligopoly, in which a few suppliers dominate the market for a certain product. Competition among producers in an oligopoly would obviously be beneficial to the consumer, but there is an alternative for producers that may be more advantageous to their profit level: cooperation. If they choose this and agree not to undermine each other, they can act as a group and dictate market terms to their own benefit. This is something quite common to see in gasoline companies, for example.
There's also the concept that supply creates its own demand, where what you earn as an employee allows you to spend as a consumer. This concept is widely used in country management to boost the economy, injecting money, credit, loans, and the like into the national market to boost the economy. The more money people receive, the greater their tendency to spend. This doesn't work as well in specific cases, like in Japan, where people often receive money and, instead of spending it, save or withdraw it and disappear with it. This stems more from a specific cultural issue than the general rule of "saving for later." Without lending or investing the money, it would go out of circulation, causing "negative demand" or "insufficient demand," according to John Maynard Keynes in the General Theory. This would lead to widespread unemployment.
And these were the points I researched today. If you wish to dive deeper into the last topic of japan's lack of consumer culture, i will link the video that inspired me to study this down bellow, of Japan being a "low desire society". Adios~