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CRITICISMS AGAINST THE Economic POLICY OF SAVING AS A MEANS OF REALISING Trade Surplus

Saving as a means of realizing Trade Surplus is not advisable. For example, If a Country who is not saving is Trading and multiplying its monetary status, it will in a long run be more beneficial to them and a disadvantage to a Country who is solely adopting and relying on the savings policy as the it can appear to be cosmetic in a short term and the effect would be exposed when the activities of the Trading nation is yielding profit on investment. This could lead to an Economic Tsunami.

CRITICISMS AGAINST THE Economic POLICY OF REDUCING IMPORTS AND INCREASING EXPORTS

A situation where the export is having more value on the Economy of the receiving Country just as Frederic Bastiat posited in its example, the principle of reducing imports and increasing export would be an exercise in futility. He cited an example of where a Frenchman, exported French wine and imported British coal, turning a profit. He supposed he was in France, and sent a cask of wine which was worth 50 francs to England. The customhouse would record an export of 50 francs. If, in England, the wine sold for 70 francs (or the pound equivalent), which he then used to buy coal, which he imported into France, and was found to be worth 90 francs in France, he would have made a profit of 40 francs. But the customhouse would say that the value of imports exceeded that of exports and was Trade Deficit against the ledger of France.

A proper understanding of a topic as this can not be achieved if views from Notable Scholars who have dwelt on it in the past are not examined.

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