Emerging Economies (RUSSIA) Research Paper Example | Topics and Well Written Essays - 4750 words

Emerging Economies (RUSSIA) - Research Paper Example According to the research findings the Soviet Union was considered as one of the most powerful and stable country in the world in 1980’s. The Soviet Union was getting stronger and stronger with the passage of time. The country was also stable economically. However, the policies devised and adopted by the country weakened the economic and political situation which eventually resulted in disintegration of Soviet Union. However, the analysts are of the view that the basic reason of political and economic collapse of the Soviet Union was the culture of War which caused severe impacts on the economic and political situations of the country. This increased war culture also affected the budget of the country and a greater portion of the budget was reserved only for the military. This increase in the military budget was made at the expense of the investment in the economy. By the mid of decade of 1980, half of the total output of the country was consumed by the Soviet military only. T his caused the shortages of the industrial commodities for the country and general public as a whole. Moreover, the commodities available in the market of Soviet Union were also not considered fit for use as all the commodities and goods which were in good condition were taken up by the military. Consequently, the consumers of the Soviet Union started importing the industrial goods to satisfy their desires. The economic factors that resulted in collapse of Soviet Union were also closely linked to the psychological factors affecting the people of the country. As the market was glooming day by day due to availability of few products and commodities in the market, the people were getting more and more depressed. Those who could import the goods from other countries satisfied their needs, but the other portion of the public suffered a lot. This had severe impacts on the psychological situations of the people and also on their working patterns and habits. The level of distrust in the gov ernment was so high that the workers often said that the government pretended that they were paying them for their work and they pretended that they were working for the government. The analysts are of the view that the incentives for the production were very low. In some cases, the workers were not given any incentives for the efforts they put in. This deterred the workers from working. Grigory Yavlinsky, a Russian economist, was of the view that the system of the system was not functioning properly because the workers were not working (Thayer, W. Silicon, V) At the time when the Soviet Union was facing great depression and economical instability, the Reagan administration in US decided to increase the military budget. They also proposed to implement an antiballistic missile system. This caused the Soviet Union to increase its military budget to maintain parity with United States. But at this stage, it was impossible for the Soviet Union to increase the share of its budget share fo r the military. The authorities of the Soviet Union decided to end the cold war and also the arms race which resulted in the allocation of a greater portion of budget to fulfill the military purposes only. However, this also removed the possibility of an invasion by external forces. Thus, the people of the Soviet Union also refused to accept the totalitarian system of government. As a result, the whole political system of the country was disintegrated and the Soviet Union collapsed. The post-Soviet period was a tough time for Russia. Especially, the transition period brought great challenges for the Russian government and public. The ways and methods that were adopted by the Russian administration to deal with these challenges are of significant importance. Moreover, the revolutionary changes that were brought by the Russian government in the field of education, industry and resource sectors are worth-mentioning. The economic policies adopted by the government in immediate post-Sovi et period are also of great importance. POST-SOVIET PERIOD: The Russian economy became one of the

Managerial Economics Resit Assignment Essay Example | Topics and Well Written Essays - 1250 words

Managerial Economics Resit Assignment - Essay Example However, in a free market economy, price is highly influenced by the market forces of demand and supply and the utility or the value customers are expecting from a commodity is also influenced by these market forces. This paper addresses factors that determine the price of computers in a free market and explain why computer price has continued to fall even while the demand constantly increased. Price determinants of computer in free market Free market is a market system with few government restrictions on how a product or service can be produced and marketed or on how a factor of production can be employed (Kates, 2011). Government in all other market systems do intervene in matters regarding how a good or service can be produced and marketed and how factors of production such as land, labor, capital and organization can be employed more than in the case of free market. As there are relatively few government restrictions in countries like United States and Canada, their economies are said to be closer to free-market economy. In a free market economy, price is determined by the market forces of demand and supply. Consumers are willing to pay for a goods or service only if they are worth the price. Similarly, suppliers are ready to produce and market only if consumers are ready to pay for them. Market equilibrium occurs when market demand and supply are equal and this is how the price of a commodity is determined. Thus, value or utility of the commodity and willingness to pay are significant factors that determine the demand and supply forces in the market. In a free market mechanism, price is never affected by outside forces such as government restrictions. The resources are allocated by the spending decisions of millions of consumers and producers. As governments place no or relatively very less restrictions on what can be bought and sold, owners of factors of production and producers of goods and services have fuller right to buy and sell whatever they own thr ough the market system. When it comes to computers in a free-market, the price is determined according to the demand and supply forces. As depicted in the table and graph below, price of computers in a free market is determined in the equilibrium point where the demand for computers and its supply intersect. When price of the computers areas lower as 10,000 or 15,000, the demand may increase to 60 and 50 respectively and the supply will reduce to 20 and 30 respectively. As the table shows, there is only one price of shifts ($ 20,000) where the market is in equilibrium. Quantity demanded is equal to quantity supplied at 40, 000 computers. At all other states, the market price is in disequilibrium wherein supply of computers and demand for computers are in a state of imbalance. Disequilibrium occurs either when the demand exceeds supply or the supply exceeds the demand for computers. Price per computer $ Demand (000 computers) Supply (000 computers) Market position Effects on price 10 ,000 60 20 Shortage Rise 15,000 50 30 Shortage Rise 20,000 40 40 Equilibrium Stable 25,000 30 50 Surplus Fall 30,000 20 60 Surplus Fall 35,000 10 70 Surplus Fall As far as computers in free-market mechanism is considered, government will not intervene in resource allocation. In other economic systems, governments may choose to interfere in the price mechanism mainly because they want to control,