Balloon Economy Essay Example for Free

blow up Economy EssayI have always wondered why our country cannot just make practically of funds to pay all of its debts and to distribute to all Filipinos. I was thinking that this way we wont have to deal with poverty anymore. This way we pass on have enough money to pay everything. later researching and thinking ab bring out it, I realized how naive I was. The government cannot just print out more money for it will drastically affect the aviate rescue. For me to further elaborate my point, let us imagine a balloon. Not an inflated one, but a new one that you just bought from a store. This deflated balloon is still so small that I cannot appreciate its beauty as a balloon.So I put more air in it and it grows to a considerable size. Imagine that the balloon is the economy, and the air inside it is the money circulating in the economy. If we put more money in the economy (through making debts or printing more money), there will be more air, and the balloon will get bigg er. When there is an abundant supply of something, its value tends to decrease. This also applies to money. As the number of circulating money increases, the value of money decreases. Now, what does this mean? It means that the purchasing capacity of money decreases, and so the prices tend to increase.This phenomenon is something we atomic number 18 all familiar with inflation. there are many causes of inflation but all of them have the a alike(p) effect an increase in price of commodities. As the balloon economy gets bigger, the prices also increase. We all have a go at it that if we keep on pumping air into the balloon, sooner or later it will burst. So to prevent this, we mustiness let air out by loosening our gripe on the end of the balloon. This is what we call deflation. by and by inflation, deflation usually follows. Since the prices of goods are too high, consumers tend to purchase less. So the supply tends to be higher than the demand.There is a surplus of goods an d services. And as I discussed earlier, a surplus of something makes its value decrease. So if this surplus continues, there will be deflation, or a decrease in price of commodities. From here we can shoot the breeze that the economy is indeed comparable to a balloon. It can inflate, deflate and ever burst. Knowing that the economy is like this, the government should be careful not to make the balloon pop. They should pump in just the obligation amount of air, and if they realize that they have pumped in too much, they must know how to loosen their grip so as to release some air from the balloon.