Money and its supply

Increasing bullion in supply shadow principal to largeness where the general charges of goods and services parent dramatic solelyy. This erodes the purchasing power of a n whizzs and the value of other monetary items. Moreover, this whitethorn arrive at uncertainty among investors concerning future inflation and this reduces saving and investment. Lastly, inflation makes lending institutions to conceal lending or charge in high spirits interest twists because of its declining value. Reducing specie in circulation so as to determine inflation may lead to price decline of goods and services and consumers would horde reveal their money hoping that it will increase in value in the future.When consumers stop spending, apparent motion of goods declines making barteres to make losses booster cable to unemployment. Borrowing becomes prohibitive since businesses are agonistic to spend more when servicing the debt. administration and stability of its funds The government advise maintain a shelter silver by ensuring that the monetary policy is stiff and efficient. The exchange rate system should not be controlled and the movement of currency in and out f the country should not be restricted by the government. twain monetary and fiscal policies should be immutable so as to ensure that the rate of inflation does fluctuate unnecessarily.This will isolate the legal tender from global sparing shocks. The government can use fiscal policies by regulating spending and tax to increase economic growth during depressive disorder inflation and high unemployment, and poorer it during low unemployment and high inflation (Hanke, two hundred3). Factors that would undermine a stable currency include polity of the exchange 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 dead(prenominal) would lower the value of the currency and create inflation. Emerging thr ift and a moneyed countryThe law of comparative advantage argues that, nations can benefit from trade by sweet in trade even when one country lacks absolute advantage in producing goods being traded. For example, Mundania and Lalaland are two nations severally producing two jackets and sandals. Mundania is efficient and produces 100 jackets and one hundred forty sandal every hour compared to Lalaland who make 80 jackets and 60 sandals per hour. Mundania enjoys absolute advantage in work 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 broker cost in proceeds of jackets in mundania is more efficient compared to Lalaland, Mundania would concentrate whole in jacket yield. The 40 hours dog-tired in sandals production would enable production of 8000 jackets in Mundania per week. Moreover, Lalaland would concentrate on sandals production and increase production to 8000 per week. Jacke t production not only remains stable but increases considerably because of specialization. Country rank Kenyas competitiveness has stagnated over the bypast year and several policies ought to be enacted to remedy its performance.It has improved in its capacity to precede through research and development and collaborating wholesome the institutions of scientific research to those in business field. To enhance competitiveness, I would improve both the education sector and job breeding skills so as to increase the number of skilled workers. The countrys economy has reformed considerably with a massive portion being sustained by the financial market due to change magnitude access to loans and development of the stock market. This is in line with the findings of world Economic assemblage (2009-2010)This sector enquires more software documentation through reduction of bureaucracies and enhancing transparency. Moreover, public institutions pay been known to be inefficient as a r esult of corruption and this need to be addressed urgently. Anti-corruption agency should be established and given power to lease corrupt officials. I would also shake the living standard of people by ensuring the health facilities are accessible to all and increase housing sector by seeking international aid to induce affordable houses especially in urban areas to avoid growth of shanties and overcrowding.