Economy 2

Taxation, another big part in the global economy as the government finances their activities (such as maintaining the police, building school buildings, some governments even provide free health care and so on) by collecting income tax. Income tax is a direct tax charged as a percentage of a person’s earning. There are other taxes too like sales tax, an indirect tax, paid by the people when buying certain goods. So this way when the government increases the taxes people have less money to spend on things. The government’s investment should benefit the country’s economy in the long term.

In today’s economy there are booms and bust. What I mean by booms and busts are that there are up’s and down’s. When there are a new business starting people make plenty of money that would go into the period of boom. The period of bust may also follow in once the economy slows down. This means people losing their jobs and loosing their business. There was a great depreciation time in 1930s when all the share prices dropped down and then suddenly collapsed which meant companies going down and people losing jobs.

There also needs to be a fair trade movement aims to guarantee high and stable prices for poor farmers in the developing countries of the world so that they do not rely on low and erratic prices in conventional market. Many people in the rich countries are ready to pay high prices so that the farmers get more of a fair deal and money on products like coffee, chocolate and tea. On customers demands the supermarkets are increasingly adopting fairly traded products on fruits like banana and other items. Fair Trade pretty much means exactly what it says. It is all about making sure that products exported internationally from “developing” countries to “developed” countries are produced under fair conditions.