section 1 : a. jaruwan chontanawat acknowledgement : a. pom economic forces in daily life...
TRANSCRIPT
![Page 1: Section 1 : A. Jaruwan Chontanawat Acknowledgement : A. Pom Economic forces in daily life Introduction to social sciences Economics (3 rd Edition); John](https://reader038.vdocument.in/reader038/viewer/2022110400/56649dbe5503460f94ab1386/html5/thumbnails/1.jpg)
Section 1 : A. Jaruwan ChontanawatAcknowledgement : A. Pom
Economic forces in daily
life
Introduction to social sciences
Economics (3rd Edition); John SlomanEconomics (16nd Edition); Paul Samuelson & William Nordhaus
![Page 2: Section 1 : A. Jaruwan Chontanawat Acknowledgement : A. Pom Economic forces in daily life Introduction to social sciences Economics (3 rd Edition); John](https://reader038.vdocument.in/reader038/viewer/2022110400/56649dbe5503460f94ab1386/html5/thumbnails/2.jpg)
Section II. Basic concepts
- Introduction
- The three problems economics organization
- Society’s technological possibilities
II. Supply, Demand and Market
III.Macroeconomic problems
![Page 3: Section 1 : A. Jaruwan Chontanawat Acknowledgement : A. Pom Economic forces in daily life Introduction to social sciences Economics (3 rd Edition); John](https://reader038.vdocument.in/reader038/viewer/2022110400/56649dbe5503460f94ab1386/html5/thumbnails/3.jpg)
I. Basic concept“Why study Economics?”
Make more money? Choosing your life’s occupation? Understanding the role of the
government and challenges of global market place?
Improving environment ? Inequality in the distribution of income ?
![Page 4: Section 1 : A. Jaruwan Chontanawat Acknowledgement : A. Pom Economic forces in daily life Introduction to social sciences Economics (3 rd Edition); John](https://reader038.vdocument.in/reader038/viewer/2022110400/56649dbe5503460f94ab1386/html5/thumbnails/4.jpg)
What is Economics? (1)
Studies how the prices of labor, capital and land are set to allocate resources.
Explore the behaviour of the financial market. Examine the distribution of income. Look at the impact of government spending, taxes
on growth. Studies the swing in unemployment and production
that make up the business cycle. Examine the patterns of trade among nations. Look at growth of LDCs and propose way to
encourage the efficiency use of resources.
![Page 5: Section 1 : A. Jaruwan Chontanawat Acknowledgement : A. Pom Economic forces in daily life Introduction to social sciences Economics (3 rd Edition); John](https://reader038.vdocument.in/reader038/viewer/2022110400/56649dbe5503460f94ab1386/html5/thumbnails/5.jpg)
What is Economics? (2) Economics is the study of how societies use
scarce resources to produce valuable commodities and distribute them among different people (Samuelson and Nordhaus,1998).
‘Scarcity & Efficiency’ : twin themes of economics.
Goods are limited, while wants are unlimited. So choices need to be made.
![Page 6: Section 1 : A. Jaruwan Chontanawat Acknowledgement : A. Pom Economic forces in daily life Introduction to social sciences Economics (3 rd Edition); John](https://reader038.vdocument.in/reader038/viewer/2022110400/56649dbe5503460f94ab1386/html5/thumbnails/6.jpg)
Choices : Three problems of Economic Organisation
What? What goods and services are going to be
produced and in what quantities?
How? How are things going to be produced, what technique will be
applied?
For whom? For whom are things going to be produced, Who will be the final
user?
![Page 7: Section 1 : A. Jaruwan Chontanawat Acknowledgement : A. Pom Economic forces in daily life Introduction to social sciences Economics (3 rd Edition); John](https://reader038.vdocument.in/reader038/viewer/2022110400/56649dbe5503460f94ab1386/html5/thumbnails/7.jpg)
Wages, rent, Dividends, etc.
The circle flow of goods and incomes
Expenditure
Goods and services
Land ,labour, capital goods
HouseholdFirms
![Page 8: Section 1 : A. Jaruwan Chontanawat Acknowledgement : A. Pom Economic forces in daily life Introduction to social sciences Economics (3 rd Edition); John](https://reader038.vdocument.in/reader038/viewer/2022110400/56649dbe5503460f94ab1386/html5/thumbnails/8.jpg)
Solutions: Market, Command, Mixed Economies
A market economy (A laissez-faire) Use ‘price mechanism’ (Invisible hand)
Command economy Use ‘central planning’
Mixed economy Use mixed element of market and
command
![Page 9: Section 1 : A. Jaruwan Chontanawat Acknowledgement : A. Pom Economic forces in daily life Introduction to social sciences Economics (3 rd Edition); John](https://reader038.vdocument.in/reader038/viewer/2022110400/56649dbe5503460f94ab1386/html5/thumbnails/9.jpg)
What do economists study? (1)
The production of goods and services. (Supply side)
How much the economy produces in total.
What particular combination of goods and services.
How much each firm produces. What techniques of production
they use. How many people they employ.
![Page 10: Section 1 : A. Jaruwan Chontanawat Acknowledgement : A. Pom Economic forces in daily life Introduction to social sciences Economics (3 rd Edition); John](https://reader038.vdocument.in/reader038/viewer/2022110400/56649dbe5503460f94ab1386/html5/thumbnails/10.jpg)
The consumption of goods and services. (Demand side)
How much the whole population spends.
What pattern of consumption is in the economy.
How much people buy of particular items.
What particular individuals buy. How people’s consumption is
affected by prices, advertising, fashion, and other factors.
What do economists study? (2)
![Page 11: Section 1 : A. Jaruwan Chontanawat Acknowledgement : A. Pom Economic forces in daily life Introduction to social sciences Economics (3 rd Edition); John](https://reader038.vdocument.in/reader038/viewer/2022110400/56649dbe5503460f94ab1386/html5/thumbnails/11.jpg)
![Page 12: Section 1 : A. Jaruwan Chontanawat Acknowledgement : A. Pom Economic forces in daily life Introduction to social sciences Economics (3 rd Edition); John](https://reader038.vdocument.in/reader038/viewer/2022110400/56649dbe5503460f94ab1386/html5/thumbnails/12.jpg)
Microeconomics VS Macroeconomics
Microeconomics is concerned with the behavior of individual entities eg. markets, firms, households. It is concerned with the demand and supply of particular goods, services and resources.
Macroeconomics is concerned with the overall performances of the economy. It is thus concerned with aggregate demand and aggregate supply.
![Page 13: Section 1 : A. Jaruwan Chontanawat Acknowledgement : A. Pom Economic forces in daily life Introduction to social sciences Economics (3 rd Edition); John](https://reader038.vdocument.in/reader038/viewer/2022110400/56649dbe5503460f94ab1386/html5/thumbnails/13.jpg)
Society’s Technological Possibilities
Input and Output
The production-possibility frontier
Opportunity cost
![Page 14: Section 1 : A. Jaruwan Chontanawat Acknowledgement : A. Pom Economic forces in daily life Introduction to social sciences Economics (3 rd Edition); John](https://reader038.vdocument.in/reader038/viewer/2022110400/56649dbe5503460f94ab1386/html5/thumbnails/14.jpg)
Factors of Production (Input)
Input = commodities and services that are use produce goods and services.
Labor (human resources)
Land and raw materials (natural
resources)
Capital (manufacturing resources)
Entrepreneurship
![Page 15: Section 1 : A. Jaruwan Chontanawat Acknowledgement : A. Pom Economic forces in daily life Introduction to social sciences Economics (3 rd Edition); John](https://reader038.vdocument.in/reader038/viewer/2022110400/56649dbe5503460f94ab1386/html5/thumbnails/15.jpg)
Output
Output are various useful goods or services that results from the production process.
![Page 16: Section 1 : A. Jaruwan Chontanawat Acknowledgement : A. Pom Economic forces in daily life Introduction to social sciences Economics (3 rd Edition); John](https://reader038.vdocument.in/reader038/viewer/2022110400/56649dbe5503460f94ab1386/html5/thumbnails/16.jpg)
Production possibility Frontier
Scared resource and technology A curve showing all the possible combination of
two goods within a specified time period with all resources fully an efficiently employed.
![Page 17: Section 1 : A. Jaruwan Chontanawat Acknowledgement : A. Pom Economic forces in daily life Introduction to social sciences Economics (3 rd Edition); John](https://reader038.vdocument.in/reader038/viewer/2022110400/56649dbe5503460f94ab1386/html5/thumbnails/17.jpg)
Butter Gun
0 151 142 123 9
4 55 0
Production possibility curve: ‘trade off ’
Guns (thou. Bt)
Butter (mil. Bt)
15
51
14
![Page 18: Section 1 : A. Jaruwan Chontanawat Acknowledgement : A. Pom Economic forces in daily life Introduction to social sciences Economics (3 rd Edition); John](https://reader038.vdocument.in/reader038/viewer/2022110400/56649dbe5503460f94ab1386/html5/thumbnails/18.jpg)
Example Assume that you
have 500 baht T-Shirt 200 baht CD 100 baht
2 Shirts 1 CD 1 Shirt 3 CDs 0 Shirt 5 CDs
![Page 19: Section 1 : A. Jaruwan Chontanawat Acknowledgement : A. Pom Economic forces in daily life Introduction to social sciences Economics (3 rd Edition); John](https://reader038.vdocument.in/reader038/viewer/2022110400/56649dbe5503460f94ab1386/html5/thumbnails/19.jpg)
Opportunity cost
Given scarcity, choosing one thing means give up something else.
Choice involves sacrifice. The more food you choose to buy, the less money you will have to spend on other goods.
The production or consumption of one thing involves the sacrifice of alternatives.
The opportunity cost of a decision is the value of the good and service forgone.
![Page 20: Section 1 : A. Jaruwan Chontanawat Acknowledgement : A. Pom Economic forces in daily life Introduction to social sciences Economics (3 rd Edition); John](https://reader038.vdocument.in/reader038/viewer/2022110400/56649dbe5503460f94ab1386/html5/thumbnails/20.jpg)
Assume that you only have capital to invest in 1 project
Invest in Project A Possibility to gain 1 million baht
Invest in Project B Possibility to gain 1.5 million baht
Example
![Page 21: Section 1 : A. Jaruwan Chontanawat Acknowledgement : A. Pom Economic forces in daily life Introduction to social sciences Economics (3 rd Edition); John](https://reader038.vdocument.in/reader038/viewer/2022110400/56649dbe5503460f94ab1386/html5/thumbnails/21.jpg)
II. Demand and Supply VS Market (1)
Demand involves consumption : consumers want to maximise ‘utility’
Supply involves production : producers want to maximise ‘profit’
![Page 22: Section 1 : A. Jaruwan Chontanawat Acknowledgement : A. Pom Economic forces in daily life Introduction to social sciences Economics (3 rd Edition); John](https://reader038.vdocument.in/reader038/viewer/2022110400/56649dbe5503460f94ab1386/html5/thumbnails/22.jpg)
Demand and Supply VS Market (2)
Demand = Wants (Unlimited)
Supply = Resources (Limited)
![Page 23: Section 1 : A. Jaruwan Chontanawat Acknowledgement : A. Pom Economic forces in daily life Introduction to social sciences Economics (3 rd Edition); John](https://reader038.vdocument.in/reader038/viewer/2022110400/56649dbe5503460f94ab1386/html5/thumbnails/23.jpg)
Demand Side Morning Activities
Breakfast Transportation costs Buy newspaper
Afternoon Lunch Go shopping Karaoke
Evening Dinner Buy Stuffs Movie Tickets
![Page 24: Section 1 : A. Jaruwan Chontanawat Acknowledgement : A. Pom Economic forces in daily life Introduction to social sciences Economics (3 rd Edition); John](https://reader038.vdocument.in/reader038/viewer/2022110400/56649dbe5503460f94ab1386/html5/thumbnails/24.jpg)
Demand :
The relationship between price and demand
Law of demand
Price of A = Demand of A
![Page 25: Section 1 : A. Jaruwan Chontanawat Acknowledgement : A. Pom Economic forces in daily life Introduction to social sciences Economics (3 rd Edition); John](https://reader038.vdocument.in/reader038/viewer/2022110400/56649dbe5503460f94ab1386/html5/thumbnails/25.jpg)
Demand
The demand curve
![Page 26: Section 1 : A. Jaruwan Chontanawat Acknowledgement : A. Pom Economic forces in daily life Introduction to social sciences Economics (3 rd Edition); John](https://reader038.vdocument.in/reader038/viewer/2022110400/56649dbe5503460f94ab1386/html5/thumbnails/26.jpg)
Demand Determinant
Price of goods Taste Income Price of related goods
(substituted, complimentary) Seasonal goods Price expectation
![Page 27: Section 1 : A. Jaruwan Chontanawat Acknowledgement : A. Pom Economic forces in daily life Introduction to social sciences Economics (3 rd Edition); John](https://reader038.vdocument.in/reader038/viewer/2022110400/56649dbe5503460f94ab1386/html5/thumbnails/27.jpg)
Indirect factors Personal income or
Normal goods Inferior goods
Taste Related goods
Substitution goods Complementary goods
Price expectation
Shifts in the Demand Curve
![Page 28: Section 1 : A. Jaruwan Chontanawat Acknowledgement : A. Pom Economic forces in daily life Introduction to social sciences Economics (3 rd Edition); John](https://reader038.vdocument.in/reader038/viewer/2022110400/56649dbe5503460f94ab1386/html5/thumbnails/28.jpg)
Demand
The demand curve
Personal income
![Page 29: Section 1 : A. Jaruwan Chontanawat Acknowledgement : A. Pom Economic forces in daily life Introduction to social sciences Economics (3 rd Edition); John](https://reader038.vdocument.in/reader038/viewer/2022110400/56649dbe5503460f94ab1386/html5/thumbnails/29.jpg)
Supply
Relationship between price and quantity Supply Price Supply Price Supply
Producer wants to maximise “Profit”
![Page 30: Section 1 : A. Jaruwan Chontanawat Acknowledgement : A. Pom Economic forces in daily life Introduction to social sciences Economics (3 rd Edition); John](https://reader038.vdocument.in/reader038/viewer/2022110400/56649dbe5503460f94ab1386/html5/thumbnails/30.jpg)
Supply
The supply curve
![Page 31: Section 1 : A. Jaruwan Chontanawat Acknowledgement : A. Pom Economic forces in daily life Introduction to social sciences Economics (3 rd Edition); John](https://reader038.vdocument.in/reader038/viewer/2022110400/56649dbe5503460f94ab1386/html5/thumbnails/31.jpg)
Supply Determinant
Its own price Technology Price of production factors Number of producer in the market Government policy Other determinants (war, disaster, etc.)
![Page 32: Section 1 : A. Jaruwan Chontanawat Acknowledgement : A. Pom Economic forces in daily life Introduction to social sciences Economics (3 rd Edition); John](https://reader038.vdocument.in/reader038/viewer/2022110400/56649dbe5503460f94ab1386/html5/thumbnails/32.jpg)
Shifts in the Supply Curve
Indirect factors Taste Technology Price of production factors Number of producer in the market Government policy Other determinants (war, disaster,
etc.)
![Page 33: Section 1 : A. Jaruwan Chontanawat Acknowledgement : A. Pom Economic forces in daily life Introduction to social sciences Economics (3 rd Edition); John](https://reader038.vdocument.in/reader038/viewer/2022110400/56649dbe5503460f94ab1386/html5/thumbnails/33.jpg)
Price Determination-Market Equilibrium
Market Equilibrium Demand = Supply
Price Equilibrium Price at Demand =
Supply
![Page 34: Section 1 : A. Jaruwan Chontanawat Acknowledgement : A. Pom Economic forces in daily life Introduction to social sciences Economics (3 rd Edition); John](https://reader038.vdocument.in/reader038/viewer/2022110400/56649dbe5503460f94ab1386/html5/thumbnails/34.jpg)
Price Mechanism
Pe
0 Q
S
P
E
D
Qe
P1
P2
QcQa QbQf
A B
FC
Excess Supply
Excess Demand
![Page 35: Section 1 : A. Jaruwan Chontanawat Acknowledgement : A. Pom Economic forces in daily life Introduction to social sciences Economics (3 rd Edition); John](https://reader038.vdocument.in/reader038/viewer/2022110400/56649dbe5503460f94ab1386/html5/thumbnails/35.jpg)
Terminology and Type of
“Market” in economics refer to “Activities” of transferring of products and services (including production factor).
![Page 36: Section 1 : A. Jaruwan Chontanawat Acknowledgement : A. Pom Economic forces in daily life Introduction to social sciences Economics (3 rd Edition); John](https://reader038.vdocument.in/reader038/viewer/2022110400/56649dbe5503460f94ab1386/html5/thumbnails/36.jpg)
Type of Market (1)
By Geographic Local Market Domestic Market Foreign Market and World
Market
By Product Category Final Product Market (output) Production Factor Market (input)
By Type of Transferring Central Market Retail and Wholesale Market
![Page 37: Section 1 : A. Jaruwan Chontanawat Acknowledgement : A. Pom Economic forces in daily life Introduction to social sciences Economics (3 rd Edition); John](https://reader038.vdocument.in/reader038/viewer/2022110400/56649dbe5503460f94ab1386/html5/thumbnails/37.jpg)
Other Types of Market (Financial Market) Money Market (less than 12 months) Capital Market (more than 12 months) Foreign Exchange Market Future Market
Type of Market (2)
![Page 38: Section 1 : A. Jaruwan Chontanawat Acknowledgement : A. Pom Economic forces in daily life Introduction to social sciences Economics (3 rd Edition); John](https://reader038.vdocument.in/reader038/viewer/2022110400/56649dbe5503460f94ab1386/html5/thumbnails/38.jpg)
Structure of Market
Perfectly Competitive Market Pure Monopoly Oligopoly Monopolistic Competition
![Page 39: Section 1 : A. Jaruwan Chontanawat Acknowledgement : A. Pom Economic forces in daily life Introduction to social sciences Economics (3 rd Edition); John](https://reader038.vdocument.in/reader038/viewer/2022110400/56649dbe5503460f94ab1386/html5/thumbnails/39.jpg)
Perfectly Competitive Market
Large number of consumers and producers
Free entry Homogeneous product Price taker
![Page 40: Section 1 : A. Jaruwan Chontanawat Acknowledgement : A. Pom Economic forces in daily life Introduction to social sciences Economics (3 rd Edition); John](https://reader038.vdocument.in/reader038/viewer/2022110400/56649dbe5503460f94ab1386/html5/thumbnails/40.jpg)
Pure Monopoly
One producer Patent, operated by government No substitution product Price are depended on producer,
sometime controlled by government
![Page 41: Section 1 : A. Jaruwan Chontanawat Acknowledgement : A. Pom Economic forces in daily life Introduction to social sciences Economics (3 rd Edition); John](https://reader038.vdocument.in/reader038/viewer/2022110400/56649dbe5503460f94ab1386/html5/thumbnails/41.jpg)
Oligopoly
Small number of producer, most of them have high market share
Product contain high and unique expertise
Price depended on the industry
![Page 42: Section 1 : A. Jaruwan Chontanawat Acknowledgement : A. Pom Economic forces in daily life Introduction to social sciences Economics (3 rd Edition); John](https://reader038.vdocument.in/reader038/viewer/2022110400/56649dbe5503460f94ab1386/html5/thumbnails/42.jpg)
Monopolistic Competition
In between monopoly and perfectly competitive level
Heterogeneous product, differentiate quality, feature, or services
Price depend upon the ability to create differentiation
![Page 43: Section 1 : A. Jaruwan Chontanawat Acknowledgement : A. Pom Economic forces in daily life Introduction to social sciences Economics (3 rd Edition); John](https://reader038.vdocument.in/reader038/viewer/2022110400/56649dbe5503460f94ab1386/html5/thumbnails/43.jpg)
Macroeconomic Problems
Inflation
Deflation
Balance of payments deficits
Unemployment
![Page 44: Section 1 : A. Jaruwan Chontanawat Acknowledgement : A. Pom Economic forces in daily life Introduction to social sciences Economics (3 rd Edition); John](https://reader038.vdocument.in/reader038/viewer/2022110400/56649dbe5503460f94ab1386/html5/thumbnails/44.jpg)
Inflation
‘Inflation’ = Rise in the level of prices throughout the economy
![Page 45: Section 1 : A. Jaruwan Chontanawat Acknowledgement : A. Pom Economic forces in daily life Introduction to social sciences Economics (3 rd Edition); John](https://reader038.vdocument.in/reader038/viewer/2022110400/56649dbe5503460f94ab1386/html5/thumbnails/45.jpg)
Inflation Level 1 : Mild inflation
Market price increase less than 5% per year (good for economy) More investment -> rate of employment increases
Level 2 : Moderate inflation Market price increase 5-20% per year (economy going down)More consumer expenditure-same income
Level 3 : Hyper inflation
Market price increase more than 20% per year (economic crisis)National currency lose its value; in period of war
![Page 46: Section 1 : A. Jaruwan Chontanawat Acknowledgement : A. Pom Economic forces in daily life Introduction to social sciences Economics (3 rd Edition); John](https://reader038.vdocument.in/reader038/viewer/2022110400/56649dbe5503460f94ab1386/html5/thumbnails/46.jpg)
Causes of Inflation
Cost Push Employee strikes for higher wage Producers reduce their production to increase market
price Costs of production factor raise (fuel price)
Demand Pull When Demand > Supply
Product shortage War Natural disaster Increasing of Global demand
![Page 47: Section 1 : A. Jaruwan Chontanawat Acknowledgement : A. Pom Economic forces in daily life Introduction to social sciences Economics (3 rd Edition); John](https://reader038.vdocument.in/reader038/viewer/2022110400/56649dbe5503460f94ab1386/html5/thumbnails/47.jpg)
Result to personal income (1)
Income from fixed salary - Lose advantage Expense increase-Fixed income or increase less
than inflation rate Government officer P ensioner Company officer
Income from profit - Gain advantage Can mark up the increasing costs in price of
goods Merchant Business owner
![Page 48: Section 1 : A. Jaruwan Chontanawat Acknowledgement : A. Pom Economic forces in daily life Introduction to social sciences Economics (3 rd Edition); John](https://reader038.vdocument.in/reader038/viewer/2022110400/56649dbe5503460f94ab1386/html5/thumbnails/48.jpg)
Advantage : Debtor Disadvantage : Creditor
Borrow today 100 baht, return 1 year later (inflation 5%)
100 baht value have been reduced to 95 baht overtime (1 year)
Disadvantage : Cash holder, bond holder, or bank account holder (when interest rate < inflation rate)
Advantage : Property owner, or other assets that have uncertain value
Result to personal income (2)
![Page 49: Section 1 : A. Jaruwan Chontanawat Acknowledgement : A. Pom Economic forces in daily life Introduction to social sciences Economics (3 rd Edition); John](https://reader038.vdocument.in/reader038/viewer/2022110400/56649dbe5503460f94ab1386/html5/thumbnails/49.jpg)
Results of Inflation
Employment Employee received higher income from overtime
working.
Expenses Full resources usage capability leaded to shortage
of production factors. Result in higher prices
If cannot control, it will create bubble economic situation.
![Page 50: Section 1 : A. Jaruwan Chontanawat Acknowledgement : A. Pom Economic forces in daily life Introduction to social sciences Economics (3 rd Edition); John](https://reader038.vdocument.in/reader038/viewer/2022110400/56649dbe5503460f94ab1386/html5/thumbnails/50.jpg)
Results of Inflation
![Page 51: Section 1 : A. Jaruwan Chontanawat Acknowledgement : A. Pom Economic forces in daily life Introduction to social sciences Economics (3 rd Edition); John](https://reader038.vdocument.in/reader038/viewer/2022110400/56649dbe5503460f94ab1386/html5/thumbnails/51.jpg)
Deflation
<
Situation when the prices of goods or services are reducing continuously caused by
What happens ? Low spending -> production cut ->price cut -
> income cut -> (job cut ) unemployment Business goes in debt -> Bank has more
uncollectable debt (non-performing loan) -> more strict to release new loan -> increase interest -> less investment - > recession
Aggregate supply
Aggregate demand
![Page 52: Section 1 : A. Jaruwan Chontanawat Acknowledgement : A. Pom Economic forces in daily life Introduction to social sciences Economics (3 rd Edition); John](https://reader038.vdocument.in/reader038/viewer/2022110400/56649dbe5503460f94ab1386/html5/thumbnails/52.jpg)
Causes of Deflation (1)
People don’t save their money in economic system Invest in property Producer stock their product
Government policy-Eg. High taxes Money is taken out of the market
![Page 53: Section 1 : A. Jaruwan Chontanawat Acknowledgement : A. Pom Economic forces in daily life Introduction to social sciences Economics (3 rd Edition); John](https://reader038.vdocument.in/reader038/viewer/2022110400/56649dbe5503460f94ab1386/html5/thumbnails/53.jpg)
Central bank policy Increase money reservation Inadequate release of bank note Restricted control on personal loan
Financial institutions retard releasing their loans Lack of money circulation in the economy
Balance of payments are continuously deficits Money have been moved out of the economic system
Causes of Deflation (2)
![Page 54: Section 1 : A. Jaruwan Chontanawat Acknowledgement : A. Pom Economic forces in daily life Introduction to social sciences Economics (3 rd Edition); John](https://reader038.vdocument.in/reader038/viewer/2022110400/56649dbe5503460f94ab1386/html5/thumbnails/54.jpg)
Balance of payments deficits
Trade Balance The monetary value of exports minus (-) imports over a
certain period of time .
Current Account The trade balance + other financial activities from other
countries; net factor income (such as interest and dividends), and net transfer payments (such as foreign aid ).
![Page 55: Section 1 : A. Jaruwan Chontanawat Acknowledgement : A. Pom Economic forces in daily life Introduction to social sciences Economics (3 rd Edition); John](https://reader038.vdocument.in/reader038/viewer/2022110400/56649dbe5503460f94ab1386/html5/thumbnails/55.jpg)
Recession Created from Economic shocks;
economic system lose its balance
Period of war Revolution Low level of money flow in economy
![Page 56: Section 1 : A. Jaruwan Chontanawat Acknowledgement : A. Pom Economic forces in daily life Introduction to social sciences Economics (3 rd Edition); John](https://reader038.vdocument.in/reader038/viewer/2022110400/56649dbe5503460f94ab1386/html5/thumbnails/56.jpg)
Unemployment Population in working age but out of
job/ non income earning
![Page 57: Section 1 : A. Jaruwan Chontanawat Acknowledgement : A. Pom Economic forces in daily life Introduction to social sciences Economics (3 rd Edition); John](https://reader038.vdocument.in/reader038/viewer/2022110400/56649dbe5503460f94ab1386/html5/thumbnails/57.jpg)
Cyclical: Demand for job exceed supply
Frictional: A period of changing job
Structural: Qualification for job is changed
due to the changing of industry circumstances
Types of Unemployment
![Page 58: Section 1 : A. Jaruwan Chontanawat Acknowledgement : A. Pom Economic forces in daily life Introduction to social sciences Economics (3 rd Edition); John](https://reader038.vdocument.in/reader038/viewer/2022110400/56649dbe5503460f94ab1386/html5/thumbnails/58.jpg)
Technological: Labor are replaced by new technology
or machinery Classical:
When business can’t afford high wages
Marxian: Lay out to keep company running
Seasonal: Ended season of some job ex.
agriculture or farming
Types of Unemployment
![Page 59: Section 1 : A. Jaruwan Chontanawat Acknowledgement : A. Pom Economic forces in daily life Introduction to social sciences Economics (3 rd Edition); John](https://reader038.vdocument.in/reader038/viewer/2022110400/56649dbe5503460f94ab1386/html5/thumbnails/59.jpg)
Results of Unemployment
Increase of ... Poverty Crime Politic instability Stress and health Economic problem