What Main Measures Of Economic Activity Fail Include CPI and GDP Essay

What Main Measures Of Economic Activity Fail Include CPI and GDP - Essay Example The nation's central measure of well-being works like a calculating machine that adds but cannot subtract. It treats everything that happens in the market as a gain for humanity, while ignoring everything that happens outside the realm of monetized exchange, regardless of the importance to well-being (Cobb, 1995). But GNP/GDP measures have some flaws in fully estimating economic development; the most common flaws are listed below: One should not neglect the way GDP ignores the contribution of the social realm--that is, thus the economic roles of household is not taken into account. This is where much of the nation's most important work gets done. Why this happens can be explained by the fact that money do not change hands. The GDP doesn't count it at all--which means that the more our families and communities decline and a monetized service sector takes their place, the more the GDP goes up. The GDP totally disregard the distribution of income, for example, so that enormous gains at the top appear as new prize for all. It makes no distinction between the person in the secure high-tech job and the "downsized" white-collar worker who has to work two jobs at lower pay. CPI CPI is used as an economic indicator to measure inflation. The CPI is an indicator of the effectiveness of government policy, besides it is used by business executives, labor leaders and other private citizens use the index as a guide in making economic decisions. The Columbia Encyclopedia defines The Consumer Price Index (CPI), as a measurement of the cost of living prepared by the U.S. Bureau of Labor Statistics, tracks changes in retail prices of an average "market basket." Changes are compared to prices in a previously selected base year, from which figures the percentage increase or decrease in the cost of living can be calculated. In addition to changes over time, such analyses must also consider regional variations in the cost of living, and the relative weighting of the components of the index must be reappraised periodically. Despite its enhancements over the years, the CPI still has considerable problems as an inflation measure. For instance, the index overstates many individual price increases by failing to fully adjust posted price changes for quality improvements and by underestimating the growth of sales by discount retailers (Bureau of Labor Statistics, 1997). Economists take into consideration the CPI when taking time-series measurements of financial instruments, since such measurements can only sense if they are expressed in "constant" money terms. One should bear in mind that the CPI is not an economic variable, as it is statistic measure of inflation. To calculate the monthly CPI, the US Department of Labor takes a weighted average of prices of various things that consumers purchase, and then its statisticians try to figure out the various proportions of different items in a "mythical" household budget. For example, the

Humanities II week one Essay Example | Topics and Well Written Essays - 1000 words

Humanities II week one - Essay Example His explanation is "If all men were good this precept would not be a good one but as they are bad and would not observe their faith with you, so you are not bound to keep faith with them† (Cunningham, & Reich, 2010, p.290). At present, I believe that there are Machiavellian politicians today and they are Adolf Hitler and Napoleon Bonaparte. Adolf Hitler is a Machiavellian politician, because he criticized the role of the Church in society. It is unclear what Hitler’s religion is, though in principle, he admired Christian heritage, German Christian culture, and an Aryan Jesus Christ. Nevertheless, as shown in the Holocaust and some resources, he was bent to destroy the influences of Christianity and Judaism on his subordinates. This indicates his desire to control the Church and subjugate it under his political leadership. Furthermore, Hitler is Machiavellian, because he led with his mind and ruthlessness. He was a brilliant military leader who won several wars across Eur ope and developed widespread control in a small duration of time. He is also renowned as a seasoned politician, who knows what to say to inspire his people to support him. The German rearmament program gave full employment and an unreserved expansion of production, which strengthened by his foreign policy successes, through the Rome-Berlin pact of 1936, the Anschluss with Austria and the "liberation" of the Sudeten Germans in 1938, made Hitler popular and powerful. Hitler also used the Holocaust to advance racial cleansing. He believed that no matter how inhumane it was, it was part of the means to political greatness. Hence, Hitler justified the need for power to rationalize his means to his ends. Napoleon Bonaparte is Machiavellian, because he influenced the Church to reduce its hold on the people. Like Machiavelli, Napoleon believed that religion is like cement which can bond society together. According to Napoleon, religion advanced national unity and stopped class war; it made people weak and obedient. Unlike Machiavelli, however, he wanted to unite the State and the Church. He negotiated an agreement with the Pope. The Concordat of 1801 distinguished Catholicism as the favored religion of France, but not the state religion. The clergy would be chosen and paid by the State, but consecrated by the Church. Despite these laws, Napoleon was able to a have tighter leash on religion. In addition, Napoleon also addressed opposition with grand promises of success of his ruling. He is also a fox like Hitler, when dealing with his enemies. Lastly, Napoleon is also Machiavellian, because of his views of power. Even after being an Emperor of France in 1804, for the next eight years Napoleon dominated Europe through battling with a wide range of alliances, such as the combinations of Austria, Britain, Russia and Prussia. Many of his military victories were shrewdly planned. He believed in his power to stay in power and to keep his ruling intact. Adolf Hitler and Napol eon Bonaparte are Machiavellian politicians, because they were the fox and the lion. They ruled and expanded their dominions through power and persuasion. They were influential speakers and affected their people emotionally. Furthermore,