The theory of paradox of shift
Nearly everyone in society is futuristic and prefer saving their money rather than spending. In that order, such individuals think that having money associated with savings for future use without thinking about the present. In my view, spending money in the present state makes me better off than saving it for fear of unknown. Through budgeted spending, I will be able to buy assets and other goods, such as clothes that I need to raise my living standard. In the same manner, spending would make me work extra-hard as money saved can bring a false sense of comfort and idleness.
The theory of paradox of shift suggests that when people reduce spending to increase their savings, the aggravate savings will decrease for the reason that money is not being used and is equally being taken away from an individual’s income. Saving is essential since it establishes a layer of financial security and grants them the possibility of living a specific way of life, but it can lead to economic challenges. In the event that everyone starts to save money and desist from unnecessary expenditures, an increased number of people would quite work. A case of the paradox shift would if an individual opted to save earnings to purchase an asset such as a house, they leave an apartment and start living with their friends or parents to the point that they can afford the asset. From this theoretical perspective, spending money makes the economy better given the reason that an increase in demand will result from a willingness to spend and pushing prices of comedies up. High prices serve to attract investors that will consequently create more jobs and develop the economy.
Question Two
At times, development is always of higher value compared to the growth of income. It represents a multi-dimensional process that incorporates quantitative escalation in the accumulation of capital as well as consumption and production. Ideally, the concept of gross domestic product (GDP) represents a traditional model of economic development used as a standard of profitable initiatives concerning public procedures. GDP is similarly a dominant protocol of lending decisions of hobby complete across various institutions. As the kernel pointed, a review in per capital GDP agency represents a synoptic study of the wellbeing of a family. The concept estimates the overall financial activity in an economy. An increased monetary activity produced for an extended period in response to other purposes, such as schools, health care, and other social amenities, promotes happiness, eventually leading to a rise in the GDP.
Scholars of opposing views have contended that GDP represents a flawed metric of measuring global economic progress. Accordingly, critics indicate that the parameter fails to capture the real information needed to realize human wellbeing. In the case of the commercial, for instance, the people of Timbucktoo only require a peaceful environment to remain satisfied with their life. Secondly, GDP considers some positive economic attainment as harmful to wellbeing. In the case of tourism, for instance, they come with dangerous substances like drugs and interact with the host community leading to the destruction of cultural beliefs and making the place unappealing for tourism in the long-run. Lastly, GDP focuses on the maximization of per capita income but does not consider the distribution of economic fruits equitably within a country. To that end, it is problematic to single out benefits it brings to individuals from the proceeds of economic activities, such as tourism.