If the government borrows a lot of money, what will this do to interest rates?

Interest rates will eventually go up because there is a massive amount of borrowing by the federal government. This is the result of the amount the government is spending - budget deficits. But gov mustn't have never had this level of spending. The government must borrow to cover all this spending. Much of the borrowing is from foreign countries such as China, India, Brazil, Japan, European countries, etc. Over time, the only way that they will loan us money is if we pay them more for the risk they are taking - which means paying them a higher interest rate. This is a major concern for the country in the long term. I hope that makes sense and helps you.

And here is the graph: it shows aggregate demand shifting left because interest rates had mount.







As Chris Told, Change in interest rates will have an impact on Unemployment, inflation, Exchange rates. All this macro economic stuff. And then The effect on inflation causes more problems, savings, etc. And then Wages, cost of production.
Crisis will occur. Entire economy will struggle causing downward growth. All this stuff could happen just because of over borrowing. I will suggest you something, " don't even borrow money from your friends, this will make successful man in the future" )

Pollution

Today i'll write about the difference between the Environment and pollution of Britain according to My country Uzbekistan.
Of course The main thing is pollution caused by cars, factory's and cigarettes(etc.) Environment and atmosphere in Uzbekistan is much more worse than in Britain Because our countries economy is too low. Government spending's are less, because they don't impose high taxes on cigarettes and on the factory's and cars. We've been in market failure since we were separated from USSR. Cigarettes are 10 times cheaper than in Britain. We should grow.. And i think we should impose 100% taxes on cigarettes and more taxes on huge factory's. But one thing is better than UK which is traffic congestion. UK has lot's of cars but we have much less. But we have massive amount of passive smokers which are destroying the atmosphere. So i thought to use fiscal policy and to tax the cigarettes so less people will buy it. Government will have more income, so they'll be able to subsidies start-ups and encourage production and consumption.

Making money from crisis

Today i wanna talk about crisis. We know that crisis effects everyone accept children. Crisis occurs abruptly, it's like a wind. Wind comes and damages the tree leafs. And the tree leafs fall. The crisis is exactly the same. It comes suddenly and and a person standing in high position suddenly falls, mostly it effects banks.

But if you are wise enough! you can make money during this crisis. But you need capital. If your and ordinary person... it'll be arduous to gain big profits. But if you have capital and your businessman or you own a business you can gain vast amount of profits. For example during crisis assets such as houses are getting cheap and some industries are ending up bankrupt. And many things are getting cheap but for a while. If you use this moment and if you buy them during the beginning of the crisis, and then you can sell it at a high price after 1 or 2 years. Or even 1 month.

There is one more way to get rich. It's by internet. You can buy and sell shares of the public limited companies in internet. When the crisis started 1 share was 0.4 dollars. This was Russian bank called "Sberbank" but now it's shares are reaching 3 dollar per share. you see if you are wise enough you could buy 100000 of shares for 40000 dollars and now you could sell it for 300000 dollars. See how much profit is it? 260 thousand dollars of profit.

also here is a source this gives more information in details.

Also for businesses if they are really wise they can make a lot! during crisis.

As business chapter 1 summary

Enterprise: process by which new businesses are formed and new products and services are brought down to the market.

Entrepreneurs: individuals who form the business and makes it grow and takes financial risks.

Enterprise skill: skill that allows individual or organisation to respond effectively in changing market situation( for example change in prices) understanding the risk, thinking and acting wisely.

Characteristics of successful entrepreneur:

- passion
- making decisions and persistence
- ability to spot and take advantages of opportunities
- skills and expertise
- creativity, vision and creation
-willingness to take risks.

The importance of risks and rewards such as profit:

Failure occurs:
- lack of finance
- skills shortage
- complexity of regulations
- poor infrastructure

Most entrepreneurs are happy to take risks if the rewards are great enough. This depends on them doing researches to minimize their failure. Outcome of taking risks is profit.
For example Dragonsden takes risk by investing their money for another businesses.
also one of the most important characteristics of an entrepreneur is to learn from their mistakes and try again.

The notion of opportunity cost

Opportunity cost: cost of the next best alternative foregone.

Sometimes we need to choose and we need to make the best decisions.

Motives for becoming an entrepreneur

More people are interested in setting up business, because:

- long-term low interest rates, makes easier to borrow money for star-ups.

-change in the political climate, so the government supports start-up businesses.

- increasing wealth, which often means that people start to look for meaning in their lives.

Government support for enterprises and entrepreneurs

Government support enterprises because they increase productivity, employ people, which means to reduce unemployment and many other reasons. They encourage growth, makes economy grow if they are successful. New and more dynamic business causes an increase in competitive pressure in markets, with new ideas, technology and more efficient working practices.

Government has made measures to make it easier to start-up and run a business, and to support a growing business. It has done this by:

- reducing the taxes, trying to establish modern tax system.

- reducing barriers for raising finance for small businesses.

- improving support for small and new businesses.

- Making law to promote competitions.

- giving financial support for voluntary and non-profit organisations that are doing excellent work.

Hw economic problem

is it possible to have no scarcity?

I think it's impossible to have no scarcity. Because everyone one want's something entire world want's something and needs something. We make choices how can we live without choices. For example your going to a holiday trip, you need to choose the best one which suits you. The best one which your pocket can afford. But if you don't choose and just go to a holiday trip without doing any researches, your trip would end up as a failure. Also assume you have two choices choices. First one is a 5 star hotel for 1 week and the second is 4 star hotel for 2 weeks. If you choose the first one you will have more delectation. This is called opportunity cost you will choose the best choice which satisfies you. There are expensive things, for example drugs. You can buy an expensive drug and a cheaper drug. Expensive drugs are expensive because they are made of expensive resources which are really scarce. Wants needs and choices are everywhere.

This picture shows the distribution of scarce resources.


And this is the Small map which explains Problem of scarcity.

And drew this diagram to show what happens when resources are scarce. As you can see supply decreases and causes the demand to contract. And prices go up. For example oil it's price is always high.


Is it likely that some wants will never be satisfied?

Yes. For example governments wants to spend lot's of money on health care but they can't, they need to spend money on road constructions too.

Finally

Holidays are over! Now from tomorrow on ill start posting new blogs...