The economy in California Essay Example | Topics and Well Written Essays - 1250 words

The economy in California - Essay Example In the course of this assessment and analysis, various factors are considered in light of their effects and implications on the economy. These factors are divided according to their level of influence and their scope in regards to how each individual entity can deal with them (Melvin & Boyes, 122). As such, economics as a social science incorporates aspects of creation, circulation and utilization of commodities and services within an economy and the various factors that affect this cycle. For a proper and more insightful analysis of these factors, the concepts of micro and macroeconomics are introduced to deal with varying perspectives of the way in which various dynamics impact on the economy. Microeconomics often deals with aspects that are within a given economic entity’s scope, and refers to factors that the entity has control over. On the other hand, macroeconomics lays emphasis on factors that an economic entity has little or no control over, especially factors that hav e a national, transnational or global scope. An example of a factor that affects the economy on a national perspective is the inflation rate, or the level of inflation within the economy. As such, the analysis of this factor forms an insightful upshot from which the impact of macroeconomic factors can be viewed in relation to the economy. BODY: On a general platform, inflation can be described as the gradual increase in the prices of commodities and service provision within an economy over a given period. This is occasioned by the value of the currency dropping, whereby the financial might of a unit of currency drops and it is able to purchase lesser and lesser items as the level of inflation increases.... On other platforms, inflation refers to an average increase in the money circulating within an economy, as occasioned by the value of the currency dropping warranting the need for more legal tender to complete a transaction (Melvin & Boyes, 134). Inflation is caused by a number of factors, ranging from government expenditure exceeding the revenues, or the private sector causing shortfalls in output resulting in demand exceeding the supply of goods and services. Moreover, increased production costs also result in increased prices of goods thereby resulting in inflation. The measure for inflation is carried out through the price index that monitors the overall pricing of consumer goods and services over a given period. The general percentage change in price roughly implicates the inflation level within the economy. The impacts of inflation can be both positive and negative in some instances. However, its negative force is more impacting than the positive effects (McEachern, 187). There are levels of inflation, with low levels of inflation generally considered not as harmful. However, zero and high inflation are considered harmful to any economy. The major impact of inflation is that it creates a financial shortage for individuals who are surviving on a fixed income. This is occasioned by the lack of income dynamism in relation to the rate of inflation (McEachern, 222). The amount of disposable income for such individuals decreases, thereby leading to less expenditure, further enhancing the inflation rate. This results in minimized savings, as more money is used in purchases that were previously less straining on the financial muscle. However, inflation can also result in hidden tax raises especially in

Repoliticalization of Accounting Standard Setting Assignment

Repoliticalization of Accounting Standard Setting - Assignment Example Some researchers have claimed that the drive behind financial systems is accounting policy-makers and the forces in the market. The affair has been much on the adoption or rejection of fair value principle. EU rejected IAS 39’s proposal of fair value principle. In addition, it put conditions on the extent to which the asset factor can be realized. It led to the amendment of the IAS 39 and IRFS 7. The EU and G20 have on more than one occasion discussed financial institutions and regulations on monetary policies. They have given guidance on securities valuation (BENGTSSON, Elias, 2011). Moreover, they proposed being a supervisory body or that the IASB should be constantly supervised in its activities. Opinion Political influence on financial in my view is not a bad agenda but their negative influence. The institution is no longer at ease to perform its functions with the profession required. On the other hand, the EU declined the adoption of IFRS 9 after the financial crisis, leaving the world amazed about the political forces behind financial institutions. IAS 39 was established under political pressure and went further to affect its operation when mistrust arose between the EU and US financial institutions. The political drive wheel should be to facilitate the growth of financial institutions and not curtail their operations.