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If, on the other hand, producing more of a commodity results in reducing its cost, this will tend to increase the supply offered by seller-producers, which in turn will lower the price and permit more consumers to buy the product.In the American economy, the concept of private property embraces not only the ownership of productive resources but also certain rights, including the right to determine the price of a product or to make a free contract with another private individual.
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Economists have been particularly surprised by favorable inflation figures in Britain and the United States, since, conventional measures suggest that both economies, and especially America's, have little productive slack.The most thrilling explanation is, unfortunately, a little defective. Some economists argue that powerful structural changes in the world have upended the old economic models that were based upon the historical link between growth and inflation.
A survey of news stories in 1996 reveals that the antiscience tag has been attached to many other groups as well, from authorities who advocated the elimination of the last remaining stocks of smallpox virus to Republicans who advocated decreased funding for basic research.
The Aswan Dam, for example, stopped the Nile flooding but deprived Egypt of the fertile silt that floods left-all in return for a giant reservoir of disease which is now so full of silt that it barely generates electricity.New ways of organizing the workplace--all that re-engineering and downsizing--are only one contribution to the overall productivity of an economy, which is driven by many other factors such as joint investment in equipment and machinery, new technology, and investment in education and training.
As a result, California's growth rate dropped during the 1970's, to 18.5 percent--little more than two thirds the 1960's growth figure and considerably below that of other Western states.Unlike most of the world's volcanoes, they are not always found at the boundaries of the great drifting plates that make up the earth's surface; on the contrary, many of them lie deep in the interior of a plate.
Thus, in the American economic system it is the demand of individual consumers, coupled with the desire of businessmen to maximize profits and the desire of individuals to maximize their incomes, that together determine what shall be produced and how resources are used to produce it.
