Causes of Disequilibrium in the economy

Causes of Disequilibrium in the economy Economists usually define general disequilibrium as the state in which contrasting market forces of supply and demand fail to reach a balance and there exist an intrinsic inclination for change. The main indicator of market disequilibrium is the continuation of shortages either in the demand or supply side of the economy. There are two main models that hold divergent views concerning disequilibrium namely the classical and Keynesian models   [ 1 ]   . Causes of disequilibrium Generally, the major causes for disequilibrium in the markets if the deficiencies created either in the aggregate demand or aggregate supply side of the economy. This means that in such circumstances the market does not clear. Main causes of disequilibrium are understood in the light of the economic model s followed by scholars. For instance, the Keynesian theory’s causes differ from that of classical economists. For instance, following Keynesians’ view, disequilibrium arises when there are di sparities between leakages and injections where as classical economists argue that if such cases arise, price always adjust to bring the economy back to equilibrium.   [ 2 ]    In the above diagram, equilibrium occurs at point P2-Q2 where AD2= AS. At that point, the economy is at full employment. Below this point the economy is in disequilibrium whereby it is operating below full employment. Keynesian theory’s view s about disequilibrium Keynesian theory is the widely used model that explains the general equilibrium using the IS-LM model. Keynesian model construe that markets may not be self-adjusting therefore the markets would not lead to full employment equilibrium if the economy is left to self-regulate. Keynes used the income-expenditure theory to explain the concept of disequilibrium and full employments. He came up with a detailed analysis of the functions of money, functions of interest rates as well as the aspect of relative prices. Keynesian theory postulates th at equilibrium usually occurs below the full employment level. Keynes argued that constant equilibrium cannot prevail due to the existence of involuntary unemployment.   [ 3 ]    In the commodity markets, Keynesians clearly outlines the major disparities that usually reinforce a state of disequilibrium. They compare the aggregate expenditure which includes household consumption, investment function as well as government spending with the effective demand. They postulate that when the economy operates below the intersection of the two, it means there is an imbalance/disequilibrium.   [ 4 ]    Keynesians denied the supply side of the classical economists. Keynes stated that firms should be given the supply schedule so that they can demand smaller amounts than the existing national demand schedule. Keynes explained the causes of disparities in supply and demand separately. According to him, supply creates income. He postulated that what people produce is the one which is bought therefore supply’s value at all times equals the income value. The income is spent by the earners in consumption of more goods. Keynesian economists advocate an increase in government spending when the economy is below full employment in order to stimulate the economy.   [ 5 ]    Classical economists Classical economists holds the notion that markets are self regulatory which is opposite of Keynesian views. They construe that whenever disequilibrium state occurs between the leakages and the injections, prices usually adjusts to re-establish the general equilibrium. They held assumption that there prices are flexible savings are equal to investments as well as embracing the say’s law which states that supply creates its own demand. Explaining the aspect of disequilibrium through say’s law, classical theorists construe that aggregate production in the economy have to create sufficient income that to buy all units of income, failure to which disequilibrium occ ur.   [ 6 ]

Knowledge of Organisational Behaviour Essay Example | Topics and Well Written Essays - 2000 words

Knowledge of Organisational Behaviour - Essay Example This understanding enables them to not only make sense of the behaviour they witness in their workforce, but also to predict it before hand and sometimes even influencing it to reflect the desired level. Thus, it is reasonable to assume that organizational behaviour teaches one how to control human behaviour in an organization. However, it may be unreasonable to label this practice as exploitative, since the control is limited to an organizational setting, and the results are aimed to improving organizational performance, rather than exploitative practice of this knowledge. Organizational behaviour teaches a manager how to analyze and handle several different dimensions of an organization. One of the relatively well-known areas of expertise is the substantial and extensive knowledge of motivation that organizational behaviour has to offer. It offers dozens of theories on motivation, each tailored to specific situations as well as different findings in this area. These range from the classic theories such as Maslow’s Hierarchy of Needs Theory to the more controversial, contemporary theories such as Theory X and Y (Thompson and McHugh, 2002, pp. 10-48). Each of these motivational theories offers a unique insight into an employee’s mind, helping one understand what drives these employees to put effort into their work and then teaching one how to use these teachings to influence employees to exhibit desired behaviour. On the surface, it may seem like a euphemism for ‘manipulation techniques’ that teach a manager how to exploit a person’s predictability and use it to their organization’s advantage. However, the intentions behind organizational behaviour practices should be kept in sight before drawing such evaluations. Discussion Considering an organization with a de-motivated workforce may help one understand the ethical validation of this discipline. Such an organization would have paid employees who have each been designat ed specific tasks, each of which contribute to the organization’s performance and success. This is common amongst organizations that combine technology, creativity, and innovation in their operations. If the employees of such an organization lack motivation, their performance levels will be low, and predictably below the needed levels (Rashid, 2003, pp. 30-55). This would lead to failure of the organization, which could have several detrimental results, which could lead to employees losing their jobs and putting them at as much loss the organization. Thus, teaching a manager to remedy such a problem in a manner, which is beneficial for both the employee and the organization, is not exploitative. Furthermore, these theories do not try to manipulate an employee psychologically on a subconscious level. They do not aim to take advantage of the employee without realizing it, but rather offer this motivation at a conscious level, the influence of which is visible to the employees t hemselves. Other than Pavlov’s Classical Conditioning theory, most of the motivational theories operate on a conscious level and depend on the employees consciously reacting to the situation they are presented with (Huczynski and Buchanan, pp. 5-25). For example, bonus schemes are one of the most commonly used motivational techniques in a workplace. They offer the employee monetary and other similar forms of extra compensation for efficient and

Intersex Research Paper Example | Topics and Well Written Essays - 1250 words

Intersex - Research Paper Example While intersex conditions are not completely uncommon, they are also not a surprise to society. The two major conditions are called hermaphrodite and pseudohermaphrodite. True hermaphrodites have complete sexual characteristics of both genders. This term has been loosely described though as most people are actually psuedohermaphrodites. This typically means that a person has one type of genitalia but secondary sexual characteristics are those of the other gender (Finkler). Some people may undergo surgery to remove any type of external genitalia so that they may assume one true gender. This would allow a person to then be able to have their external genitalia and their thoughts and feelings of how they identify with either gender to correlate and would give them a sort of true gender identity and would also increase their self confidence. People may also undergo hormone therapies in order to help aid in any transition (Finkler). According to a study done over fifty years ago, eighty-f our cases of people who were considered hermaphrodites showed cases of heterosexual libido. This has less to do with the person's physical characteristics. Instead, it has to do more with their upbringing. It was at this time of the study believed by these researchers that hermaphrodites experienced either homosexuality or heterosexuality not by hormones but instead by their environmental surroundings. This is thought to be true of both true hermaphrodites and pseudo-hermaphrodites (Ellis). A similar type of birth defect is ambiguous genitalia that is similar to that of hermaphrodism. This is a case when the outer organs of a person are not similar to a male or a female's organs. What can happen with this condition is the fact that during conception, the X and Y chromosomes from the father determine the child's gender. A person is either genetically XX and identifies as a female or is XY and identifies as a male. If the process in the womb is disrupted in which a baby assumes identi ty, it can then result in ambiguous genitalia. When the person comes from the womb, it is difficult to determine if they are male or female based on the organs that are present. Some of the causes of this condition are pseudo-hermaphrodism, true hermaphrodism, congenital adrenal hyperplasia, lack of certain hormones or other abnormalities in chromosomes. It could also result from a mother taking certain medications (Medline Plus). Depending on the person, a genetic female may also appear to look like a female. However, a genetic female could also have physical characteristics instead of a male. This is the same for a male. Genetic females with ambiguous genitalia would have physical characteristics of an enlarged clitoris that looks like a small penis; the labia may resemble a scrotum; the urethral opening may be anywhere near the clitoris; there may be a lump of tissue in the labia that appears to look like a scrotum with testicles. It is often thought that these infant genetic fem ales are at first males but with testicles that have not descended. On the contrary, a genetic male may have a small penis that is under 1.2 inches at birth. This may look like an enlarged clitoris. The scrotum may appear to look like a labia. The urethral hole may be anywhere along the peritoneum and the testicles are still undescended. This condition is not life threatening but can relate to psychological issues in the future where a person may struggle