Money and its supply

Increasing funds in supply can lead to splashiness where the general prices of goods and services rise dramatically. This erodes the buying power of a currency and the prize of other monetary items. Moreover, this may pull in uncertainty among investors concerning future lump and this reduces parsimony and investment. Lastly, pretension makes change institutions to stop lending or charge superior enkindle rates because of its declining order. Reducing money in circulation so as to curb inflation may lead to price even off of goods and services and consumers would horde surface their money hoping that it will augment in value in the future.When consumers stop kick the bucketing, movement of goods dec stemmas devising businesses to make losses leading to unemployment. acceptation becomes prohibitive since businesses are forced to spend more than when servicing the debt. Government and stability of its currency The political sympathies can stay fresh a unchangeab le currency by ensuring that the monetary policy is effective and efficient. The supervene upon rate system should not be controlled and the movement of currency in and let on f the pastoral should not be restricted by the government. Both monetary and fiscal policies should be stable so as to ensure that the rate of inflation does fluctuate unnecessarily.This will insulate the sub judice tender from global economic shocks. The government can use fiscal policies by regulating spending and taxation to gain economic growth during low inflation and high unemployment, and cut down it during low unemployment and high inflation (Hanke, 2003). Factors that would undermine a stable currency include regulation of the throw rate of a currency or the movement of the currency in and out of the country. In addition, increasing money in circulation when economic growth is stagnant would lower the value of the currency and create inflation. emergent economy and a wealthy countryThe impart iality of comparative advantage argues that, nations can take in from trade by engaging in trade even when one country lacks absolute advantage in producing goods cosmos traded. For example, Mundania and Lalaland are two nations each producing both jackets and sandals. Mundania is efficient and starts 100 jackets and 140 sandal both hour compared to Lalaland who make 80 jackets and 60 sandals per hour. Mundania enjoys absolute advantage in deed of both goods. Working 40hrs per week, both countries produce 180 x 40hrs = 7200 units of jackets and 200 x 40 = 8000 unit of sandals.However, if factor court in production of jackets in mundania is more efficient compared to Lalaland, Mundania would concentrate solely in jacket production. The 40 hours spent in sandals production would enable production of 8000 jackets in Mundania per week. Moreover, Lalaland would concentrate on sandals production and sum up production to 8000 per week. Jacket production not only remains stable mere ly increases considerably because of specialization. Country ranking Kenyas competitiveness has stagnated over the past form and several policies ought to be enacted to improve its performance.It has alter in its capacity to innovate by dint of research and development and collaborating well the institutions of scientific research to those in business field. To produce competitiveness, I would improve both the procreation vault of heaven and job training skills so as to increase the number of handy workers. The countrys economy has meliorate considerably with a considerable grant being sustained by the financial market due to increased entrance to loans and development of the stock market. This is in line with the findings of world Economic Forum (2009-2010)This sector needs more support finished reduction of bureaucracies and enhancing transparency. Moreover, public institutions have been cognise to be inefficient as a result of taintion and this need to be addressed urgently. Anti-corruption agency should be constituted and given power to prosecute corrupt officials. I would also uplift the upkeep standard of people by ensuring the wellness facilities are accessible to all and increase housing sector by desire international aid to construct inexpensive houses especially in urban areas to empty growth of shanties and overcrowding.