how does politics affect the economy of a nation??

Question

can you site some examples on how does politics affect the economy of a nation???thank you in advance!!!!

Answer 1

Politics is one of many external factors that can drive a demand curb forward or backwards. Other factors, such as price, only produce a slide along that curve, but not its movement.

As an example, consider the fall of socialism in Hungary, which boosted the economy.

Answer 2

Politics will usually have an effect in the economy through the risk of making investments in a country. Political instability will usually have a detrimental effect on investment which, in turn, has a detrimental effect on the country's ability to generate income. Most investors track indices like, for example the EMBI (emerging markets bond index) which tracks the difference between US Government bonds (rated at 0 risk) and the interest rate paid in other countries. The higher the political instability in a country, the higher the economic risk and, therefore, the higher the interest rate the country has to pay. If you look up the EMBI rate for say Iraq or Venezuela, you will find that they have very high rates, in direct relation with the country's political instability.

Answer 3

First you have to understand why governments are inefficient and why private institutions, while not perfect, produce the highest efficiency! When a business is fighting for the people's dollar it will make sure that the consumer gets what they want. These competitive markets force the lowest price to the consumer while fighting over the best employees increasing wages. Quality also increases and the consumer gets to vote everyday on whichever product they want to continue in the production process. Everytime you go to a store you are voting with your dollar. Competitive markets are why we have as much technology as we have as well as the reason why economic growth is abundant in most nations that give more economic freedom! Government do not create anything except for long-run poverty! In Africa today, governments do not allow their people control, instead government controls almost everything and many people do not understand that this is the root cause of Africa's poverty level. When government takes money from the people it does not just give it back at a minimal cost. All this money that was given out had huge internal costs associated with it. Additionally, every dollar taken from the people(taxes) will reduce investments which lead to economic growth through this money being kept in the banking system. This money would've been loaned out to make new Ford plants fueling more jobs or to help get you a lower interest rate on your house or car. When government gives money away it increases inflation as well as lowering incentives. Economic freedom enables the greatest amount of healthcare, education, shelter, food, and just about any other item available. What hurts is the .5% tax on almost everything in the economy. When a tax is placed on gas, people forget that everybody including corporations pay this gas tax. Even though the expense sheet says $2.25 for a gallon of gas, half of that is taxes. Imagine after account receivable taxes, propoerty taxes, income taxes, double taxation, and many many more taxes why prices are so expensive. Government tries many times to regulate the goods in the economy with horrible results. Unfortunately to stand up and show the waste of these items in this country is being unpatriotic to your people when really you are trying to help. Politics is a farce. All the people need is freedom away from tyranny as well as a small government system to protect freedoms. Today, socialist and extreme liberal and conservative people are running politics with the same thing that got them into it, fear. Many who do not understand economic freedom dismiss it's success while believing that government will attain "heaven on earth." Impossible! The government understands that people's hearts are swayed easier than the mind. All they have to do is look like the defender when really they are the aggressor! It is sad that so many people vote without knowledge!

Answer 4

One important factor of economic ranking is the Global Competitiveness rank of a given country. It shows how capable is your country of converting its resources in well-being means for its inhabitants. In this ranking you will find that top places are occupied by countries like Switzerland, Finland, Japan, and the US. First World countries right? Then, explain Italy, one of the World's 7 most industrialized nations which as of 2005 performs on 42nd place, completely installed on the Third World level of the list. Well, experts attribute this mainly to the country's political corruption scandals which in turn tends to weaken its institutions, therefore affecting the nations economic development right at its core.

Answer 5

well when political leaders make a decition it impacts eery thin look at the us germany and france after WWI and WWII and also look at countrys that have been at war they usually go into a depression during and after a war look at the us now we are on the verge of a recession/deppresion and who is to blame? the political leaders (i.e. bush cheny congress) and that is how politics can impact the econemy of a nation and somtimes the world and there are other ways also