Keynesian Theory On Demand Pull And Cost Push Inflation

According to Keynesian, inflation can be caused by increase in demand and/or increase in cost.

Demand-pull inflation is a situation where aggregate demand persistently exceeds aggregate supply when the economy is near or at full employment. Aggregate demand could rise because of several reasons. A cut in personal income tax would increase disposable income and contribute to a rise in consumer expenditure. A reduction in the interest rate might encourage an increase in investment as well as lead to greater consumer spending on consumer durables. A rise in foreigners' income may lead to an increase in exports of a country. An expansion of government spending financed by borrowing from the banking system under conditions of full employment is another cause of inflation.

An increase in demand can be met initially by utilising unemployed resources if these are available. Supply rises and the increase in demand will have little or no effect on the general price level at this point. If the total demand for goods and services continue to escalate, a full employment situation will eventually be reached and no further increases in output are possible. This leads to inflationary pressures in the economy.

Demand-pull inflation is caused by excess demand, which can originate from high exports, strong investment, rise in money supply or government financing its spending by borrowing. If firms are doing well, theey will increase their demand for factors of production. If the factor market is already facing full employment, input prices will rise. Firms may have to bid up wages to tempt workers away from their existing jobs.

It is most likely that during full employment conditions, the rise in wages will exceed any increase in productivity leading to higher costs. Firms will pass the higher costs to consumers in the form of higher prices. Workers will demand for higher wages and this will add fuel to aggregate demand, which increases once again. The process continues as prices in the product market and factor market are being pulled upwards.

Keynesian theory of cost-push inflation attributes the basic cause of inflation to supply side factors. This means that according to Keynesian, rising production costs will lead to inflation.

Cost-push inflation is usually regarded as being primarily a wage inflation process because wages usually constitute the greaer part of total costs. Powerful and militant trade unions who negotiate wage increases in excess of productivity are more likey to succeed in their wage claims the closer the economy is to full employment and the greater the problem of skill shortages.

An increase in the price of coal, oil and many other basic inputs or even semi-manufactured goods used as component parts in the production process will manifest itself as higher consumer prices. The oil crisis in 1973-1974 and 1970-80 resulted in many countries experiencing severe cost-push inflation.

Inflation may occur when there is a depreciation of the home currency. A depreciation of a country's currency results in increases in the price of imported foodstuff, raw materials and capital equiment which then results in a rise in production costs.

A significant increase in the level of indirect taxes(taxes on goods and services) will raise domestic prices independently of the state of demand and could be a causal factor in creating wage-push pressure on the economy.

When firms are faced with higher wage costs, they push up the prices of their products to maintain their profits. Sometimes, they may even seize the opportunity to increase their profit margins. The more price inelastic the demand for their goods, the less likely such behaviour will lead to a fall in demand for their products.

Cost push inflation in inevitable when there is a struggle between workers and firms. Both try to maintain their real incomes by bidding up their wages and profits. Workers force firms to give inflationary pay increases while firms increase prices so as to raise their profit margins. Price rises are inevitable. This process is known as a wage-price spiral.

In practice, it may not be easy to identify the primary cause of inflation. Demand pull and cost push inflation can occur together. An initial demand pull inflation may strengthen the power of trade unions which then use this power to drive up costs. Alternatively, an initial cost push inflation may encourage the government to expand aggregate demand to offset rises in unemployment. Once inflation is under way, it is not always easy to identify the underlying cause.

Keynes' demand and cost push theories pointed out that the closer the economy is to full employment, the greater the inflationary pressure. The greater the rate of unemployment, the less the inflationary pressure.

Commodities Research Reports - An Opportunity to Enhance Your Financial Front

The economy of a country depends on the strength of the market that it has within it. India is steadily and rising to become one of the leading economies of the world with a number of different markets which have exponential growth such as the agricultural, industrial, stock exchange real estate and commodity market. These different markets contribute to the significant progress of the economy of the nation.

Commodity trading , in particular is very prominent in the country; where two-thirds of the country depend on agricultural products. An important component of the financial market, the commodity market comprises of a number of products such as precious metals, base metals, energy, crude oil, soft commodities.

Besides the national commodity exchanges in India - similar to the NSE and the BSE there are a number of commodity exchanges such as the Multi-Commodity Exchange (MCX) at Mumbai, the National Commodity and Derivatives Exchange Ltd. (NCDEX) at Mumbai, the National Multi Commodity Exchange (NMCE) at Ahmedabad and the National Board of Trade (NBOT) at Indore. This commodity market functions through two different forms; Over the Counter (OTC) market and the Exchange based market.

In order to make a trading decision in this market it is important to research commodities and require a deep knowledge so as to find out and understand the latest news.

Research is one of the main and essential activities of trading commodities. Usually the main techniques used are fundamental analysis and technical analysis to research commodities or futures market.

There are many commodity research firms which publish commodity research reports either daily or weekly. By going through such reports you can gain a deeper understanding and a clear vision as to know which commodities to trade in. They may also give you market opinions from a commodity analyst / trader who writes such reports. They provide information regarding the constant fluctuations of the prices; which is very often guided by demand and supply issues.

The Multi-Commodity Exchange (MCX) publishes MCX commodity reports (Commodity Specific Reports) which are specifically prepared by the research team to create market awareness and facilitate any further business development. It provides a broad overview of the status of the commodities which are traded at the MCX; what is affecting their supply and demand dynamics or any other market moving factor.

These research reports for the different commodities can be downloaded online.

Commodity reports can be used by traders to maximize their profits and to gain an edge. They however do not insure you of profits but they provide important data to improve risk-adjusted returns.

November Is Financial Literacy Month

Most of us only think of literacy in relation to reading. This month is meant to bring awareness to the term Financial Literacy and what it means to everyone. It doesn't mean understanding how to look at your bank statement, but rather looking at your entire financial plan and understanding how it fits your stage of life.

For example, when was the last time you reviewed your life insurance policies? Or perhaps you or your partner don't have an active policy. Or do you know if you have one?

Life Insurance is not the one trick pony of the past, there are now many choices in how you structure it. From Term Life which allows you to choose the coverage period, to Whole Life which provides a lifetime of protection to Critical Illness. Unfortunately, our health is sometimes seriously affected and Critical Illness provides coverage to protect our families from the financial burden of our illness.

If you are at a point where you don't want to think about end of life, think about beginnings. It's time to start your own chapter in the form of home ownership. You've done your research, found your new haven and negotiated your mortgage. Before you sign the papers, understand how to protect your investment.

Should you decide to add children to your equation, you hope they will move onto postsecondary education. Planning early can provide the financial education they need before they incur the debt which could come with it.

Each stage of life brings an opportunity to review your current financial standing and adjust for the future. It can be hard to know all your options and sometimes even harder to see the forest for the trees when reviewing your own assets. If you'd like some help, we're here.

Coffee News Franchise Review - The Coffee News Business Opportunity

Coffee News is a weekly publication that began back in 1988 in Manitoba, Canada. It was started by Jean Daum, an advertising expert, who independent research led her to believe that people are more susceptible to advertising while they are eating. The concept is simple- a brief newspaper that is delivered free to coffee houses, restaurants, and motels. How brief? Well, Coffee News claims that it only takes 8 minutes to read and therefore, due to its brevity, people will read it from front to back. The paper focuses only on news that is entertaining and upbeat, including horoscopes, jokes, trivia, and therefore appeals to its readers. The theory is then that readers will read not only the features but also the advertisements.

Coffee News has been franchising since 1994 and startup costs for the new franchisee are estimated at just under $ 10,000. There is an $ 8,000 franchise fee and an ongoing royalty fee of $ 75 per week. There is no in-house financing available for the start-up costs or franchise fee. Exclusive territories are offered and the parent company looks for individuals with sales, advertising, and marketing experience. As a franchisee, you will need to sell advertising space in your publication. This is how revenue is generated.

The Coffee News franchise can be run out of your home and it does not need to be owner operated. However, approximately 98% of the current franchises are owner operators. A 3-day training course is offered at the company headquarters in Bangor, Maine and a mentorship program is also available for new franchiseses. A monthly newsletter is also distributed by the parent company which offers tips and strategies from other franchise owners.

If advertising sales is something that appeals to you, then you might find the Coffee News opportunity to suit your needs. However, if it does not, then you probably should search elsewhere for a business startup.

Cell Phone Accessories - A Must-Have

Now a day's one of the most utilized gadget in the world is the cell phone. It's not only a source of communication but this high tech; dashing and trendy machine has multiple functionalities e.g the ability to surf the Web, pump out tunes, capture your memories, and play full-length movies and TV shows. Mobile phones have become more than miniature long-distance walkie-talkies, utility of this electronic tool has further been complemented by its accessories, making it not just a phone, rather a mini computer. Phone accessories are as high in demand as a mobile phone itself.

Making a fashion statement in the technological world of telecommunication, style and chic are extended to accessories of phone as well. Today, the market is flooded with a sprawling range of phone accessories from hard ware to software. All famous phone companies design accessories for phones, to attract high number of customers before designing a new model. Accessorize your phone with colorful cell phone cases, phone holders, hands free kit, Bluetooth headset etc not only provides functionality but also adds beauty and style.

In addition to being an integral part of the gadget, these accessories enhance the appearance of Mobile phones. You can add a touch of your personality to your cell phone when you choose the right faceplate, case or cover. High quality and affordable cases can provide a new look for your existing phone. These cases are available in almost any style imaginable. Equipping your mobile phone with a nice fitting durable case will greatly enhance the lifetime of your phone as well. Face plates also comes in a variety of colors and styles so you can easily find one that suits you and makes your mobile phone stand out from others, while protecting the original face of your phone.

Purchasing an additional car charger is another must-have phone accessory, as it will prevent you from being stranded with a dead mobile phone. Many people, especially travelers don't properly care for their battery, due to which there mobile go dead in the middle of a call when they are between locations. These chargers will fully charge your battery in under an hour. Sometimes if you're lucky you will receive one with your phone upon purchase but don't count on it.

The handsfree kit has become one of the ultimate cell phone accessories, especially if you find yourself needing to talk on the phone while you are driving a car. Some of the headsets are equipped with inbuilt microphones and provide excellent sound quality with deep bass. They also feature noise canceling facility that cut down the ambient sounds. More over if your phone has Bluetooth capabilities then you will be able to get a wireless set up which is a pretty slick way to go. If your phone can handle stereo Bluetooth streaming, you are probably on the lookout for different ways to pipe music to your ear holes. No more inconvenience of tangling headset wires you can answer calls, dial by voice, and chat hands-free while driving with this minute device that stays in your ear quiet unnoticed.

Phones also include keypads, data cables, antennas and memory cards. These accessories are not only functional but decorative and add spice to your phone. Data cables are must for camera phones and all those with MP3 capabilities. The data cables works as a communication medium between your PC and mobile. It allows you to transfer data and other media files from your cell phone to computer and vice versa. The memory cards are also must for the same types of phones so you can store more music and pictures before having to download it to your computer. Some phones allow memory cards to be plugged directly into the phone. This will increase the capacity for photos, music, or anything else you want to store on your cell phone. Antennas will give your phone reception a boost which will increase the received signal a couple of times, so you'll never worry about a call dropping even if you have dropped off the map. Wide range of Nokia, Samsung, LG, Motorola, HTC, Palm, Sony Ericsson, iPhone and BlackBerry accessories are available online at a nominal prices against the functionality they provide.

Whatever the phone accessory there's one that fits every personality. All you need to do is shop. With high quality and affordable pricing, many phone accessory wholesale websites will help equip you with the hottest accessories in the market. Accessories add to the performance of a cell phone, they offer practical solutions to data-connectivity, make driving safer and add class to your cell phone.

What You Need to Know about Vacation Rentals before You Go

That time of the year is finally here. You know what I'm talking about, the one or two weeks you get every year to escape from "real life" and just be you. Relax, eat and drink well, enjoy your family, catch up on some much needed sleep. But, before you pack up and head out, rethink the all-too-normal hotel stay. Believe it or not, you have options, one of which is the vacation rental.

Would not it be nice to leave your own home, arrive in your destination city and settle into a "home away from home" for your next vacation? That's what vacation rentals are all about. These are homes waiting to be rented out by people on vacation. Each vacation rental owner will have different criteria in what type of renter they are looking for, each vacation rental house will vary in amenities, and each price will be dependent on the time of year and the length of stay. So, it sounds like a great idea, but how do you figure out how to make it all happen? Not a problem. Below you will find answers to frequently asked questions regarding vacation rentals. Read on, my friend, your next "home away from home" vacation rental is right around the corner.

Frequently Asked Questions on Vacation Rentals

What are the advantages of a vacation rental?

Do you ever wish your hotel room had just a little more personality? Yeah, I thought so. Well, renting someone else's home for your vacation might just be the thing you're looking for. Usually offering larger living spaces than hotel rooms, these vacation rentals are all about living like you were in your own home. They offer greater privacy than hotel rooms and most rentals have a kitchen area for cooking, which in the end will save you money if you prepare some of your own meals.

You'll enjoy several rooms, and maybe even different levels, instead of one big room where the whole family sleeps. Many owners will leave information on things to do and see in the local area. Vacation rental homes are clean, friendly, comfortable and inviting. This is because many of them are not just rental homes, but also function as the owner's own residence for part of the year.

A majority of vacation rentals tend to be cheaper on a per night basis than their hotel. By renting directly from the owner you will avoid taxes, tips and other external charges. However, there is a wide variation among others based on a number of factors (see How Much Should I Expect to Pay below)

What are the drawbacks of a vacation rental?

Of course, there's always the other side of the coin. As vacation rentals are not usually monitored by a central managing company, you'll only know what you're getting yourself into when you actually arrive to your rental. Many owners require pre-payment, or at least a large deposit fee, before arriving. Therefore, if things are not the way you anticipated after arriving, or if you find your dwelling unacceptable and decide to head to a local hotel, you may lose any money you prepaid. This is also true for last minute cancellations. There is not usually a refund. You always run the risk of getting less than you expected, but, it's rare.

Most times, vacation rentals tend to be cheaper than an average hotel room per night. But, not always, so make sure you are comfortable with the price you will be asked to pay.

Another disadvantage to vacation rentals is the lack of a managing member on site to deal with any problems that you may encounter with the home or during your stay in general. Most owners get around this by having a list of emergency numbers, utility companies and other such items available to the renter should they need anything.

What amenities are included in a vacation rental?

Since every rental is owned by a different owner, each will include different amenities. Some come with swimming pools, hot tubs, others with golf packages, and horse stable privileges. In cities with tourist attractions, some owners include tickets to local attractions.

Most vacation rentals come with the essentials: TV, equipped kitchen, towels, linen, and everyday appliances, but it never hurts to ask these questions when searching for the perfect place. Be sure to understand exactly what you are paying for before sending in the payment.

What types of rentals are available?

Pretty much any type of dwelling that you would want to live in during your vacation is available somewhere. From studios in downtown Manhattan to a villa in the south of Spain, you'll be able to find what you're looking for. The range of available options is mind boggling. Additionally, each week, month and year there are new possibilities as owners put their homes up for only certain weeks or months of the year, the choices are constantly changing.

Are vacation rentals only available in the US?

Vacation rentals are available worldwide. They can be found in every state of the US and almost every country in the world. Do not be fooled by their different names, though. Vacation rentals are also known as holiday cottages, tourist rentals and holiday rentals. If you are looking for one in Europe, the Italians call them agriturismi, while the French say gites. If you are in Germany you will be looking for ferienwohnungen (yep, try to say that three times fast with a bratwurst in your mouth!)

Regardless of what you call it, though, a vacation rental is a great option for those getting ready to take a few weeks off from reality and enjoy the good life a bit.

How do I find a property?

There are several ways to go about finding the perfect vacation rental for your next trip. Check with your local travel agent to find someone in your area that specializes in finding owners and renters and getting them together. Another option is the yellow pages. Finally, there is a wealth of information on the Internet. Type in a search for "vacation rentals" and over 13,300,000 websites can be found just on http://www.google.com alone. Some websites only list vacation rentals in the United States while others specialize in vacation rentals worldwide. There are some sites that will allow the potential renter to look for a residence by specific search criteria such as a particular destination, certain number of bedrooms and types of amenities that are included in the property.

Most of the vacation rental services on the internet are only the "go-between" or the "classified" section of the newspaper. They take no responsibility for the truth or correctness of the ads that are listed on their sites. So, do your homework by making phone calls, speaking with the owner and asking specific questions. Make sure you feel comfortable with the answers, if not, move on to the next rental, there are plenty.

If you're not comfortable with the whole renter / owner thing, there is another way to rent a vacation home. Some companies exist that strictly buy and rent out homes to vacationers. They offer a bit more security so that you feel you are really getting what you bargained for (although nothing is ever 100% fool proof). Additionally, sometimes these agencies will give you cancellation insurance. In other words, if you cancel before arriving, they may be able to refund a portion of your deposit or payment instead of keeping it as most owners do if a cancellation occurs. With some agencies you'll find that you pay a higher price than going directly to an owner. This is how the agencies make their profits. There are always pros and cons to each scenario. Ensure you know which one works best for you.

How much should I expect to pay?

This is a tough question to answer. The amount you pay will depend on what country or state you are visiting, number of days you are staying, and type of house you are renting. Some owners offer package deals including tickets or sightseeing events along with the rental, others include bonus days if you stay for a certain length of time. There are other owners who may offer free or add-on house cleaning service with your stay while some go to great efforts to ensure you have everything you need, even additional items such as a crib, highchair or wheelchair. Each vacation rental will be entirely different from the next. Your best bet after deciding on your destination is to review multiple rentals to determine which is better suited to your needs and overall budget.

Are there any hidden fees?

Hidden fees usually only emerge after you have arrived. These may include extra for phone calls, house cleaning service, extra person fees, excess heat and air-conditioning bills, pet deposit, computer access ... etc. Again, be extremely thorough when interviewing the owner of your prospect vacation rental. Ask about any "extra" fees, or if the house is "all-inclusive". Do you have free access to all the pantry and food items? How about the laundry supplies? All utilities? It never hurts to ask!

Vacation Rentals

In summary, cover all bases by asking lots of questions. Getting your agreement in writing is also a very smart idea. After these basics are out of the way you will be ready to take off for your home-away-from-home vacation rental. Try one this year and see for yourself that vacation rentals can be a fantastic means to really getting the full enjoyment out of your next vacation.

7 Tips to Safe Online Dating

Almost any online dating service requires that you put down personal information about yourself that can be viewed by other people. This is necessary as your information will then become part of their database and easily searchable if someone is looking for a person that fits your criteria. It helps people find other people online, probably like a search engine works. Members are allowed to upload photos as well as videos of themselves. Many of these websites will also have an online chat and message board option, allowing members to communicate.

Tip no. 1
Online predators know how to locate their prey and usually this information is all they need to get you to trust them. It would be advised that you join dating websites, that wont display your personal information until you grant a user you trust access to your profile. Also try to avoid putting down your address, home phone number and cell phone number on these websites. It is imperative that you know, how to protect your personal information.

Tip no. 2
Stay away from people who may have uploaded a fake photo of themselves on their profile. These people are probably criminals or sexual predators, who are not allowed to use these services in the first place.

Tip no.3
Try not to upload a recent photo of yourself, and only show your photo once you get to know someone online. Also refrain from emailing or file transferring your photo to anyone you donýt know online.

Tip no.4
Try not to display where you went to high school as well as what year you passed out. Most people can use this information about you to track you down and become stalkers.

Tip no.5
Donýt go out on a date the first time you chat with anyone online. Try to get to know them better, before you decide to go out on a real world date with them. It is imperative that you speak to the person and know him / her for a reasonable amount of time before you meet.

Tip no.6
Donýt display your full name on your profile, it is better for you to put up a nick name.

Tip no.7
Always be sure to sign out from the website properly and do not give your password to anyone. These are the basic preventive measures that you should take while Online Dating.