Balloon Economy Essay Example for Free

Balloon Economy EssayI allow always wondered why our country cannot just make lots of money 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 go out have enough money to pay everything. After researching and thinking about it, I realized how naive I was. The political relation cannot just print out more money for it will drastically affect the balloon economy. For me to further elaborate my point, let us cerebrate 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 oxygenise 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 big ger. When there is an abundant supply of something, its esteem 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 are all familiar with pompousness. There are many causes of inflation but all of them have the same effect an increase in price of commodities. As the balloon economy gets bigger, the prices also increase. We all know that if we time lag on pumping air into the balloon, sooner or later it will burst. So to prevent this, we must let air out by loosening our dish on the end of the balloon. This is what we call deflation. After inflation, deflation usually follows. Since the prices of goods are withal high, consumers tend to purchase less. So the supply tends to be higher than the demand.There is a surplus of goods and 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 see 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 right 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.