There are factors that affect the growth and development and potential change of the economics surrounding human life and coexistence. Knowledge of these factors strengthens the economy.
The basic unit of any economy is the Productivity Level, which is the mental or physical effort spent over a period of time to create a product that is necessary for human existence and is in high demand.
The depth of productivity is in the mental or physical effort of one or more individuals spent over the shortest period of time to provide a wider spectrum of solutions that meets high consumer demand.
The strength of an economy is tied to the depth of the variety of productivity within its economy which is sufficient to sustain every consumer citizen within that economy and increase development.
Productivity level in a non-traditional economic setup is measured against a stable, scarce, non-perishable, immutable, and universally acknowledged medium of exchange within that economy.
The valuation of this Productivity level is based on a perceived value relative to the demand or to what the consumer is willing to give in exchange for that productivity level in comparison to alternatives.
Every human being requires basic necessities of life for
sustenance making each human being a potential consumer and an increase to the
consumption level within an economy.
When consumption level matches productivity level, there
will always be stability within an economy regardless of whether there is an
existing medium of exchange for commerce on not.
However the consumption level and productivity level is
weighted on a balance in the presence of an existing medium of exchange by
which all productivity within an economy is pitted.
In imbalance in the consumption levels and production levels
within an economy when measured by its medium of exchange causes what is popularly
known as inflation or deflation.
Inflation is when demand exceeds supply within an economy. The
rate at which this demand exceeds supply per annum is known as the inflation
rate. The primary cause of inflation is decreasing production.
Deflation is when supply exceeds demand within an economy.
The rate at which this demand exceeds supply per annum is known as the
deflation rate. The primary cause of deflation is increased production.
When an economy is experiencing a decreasing production, the
root cause can be traced to either poor human capital development or imbalance
in the distribution of the medium of exchange or both.
