Shape of economy, how it is possible?
Shape of economy is conceived because it can be done with the help of mathematical calculations and formulas the resultant, shape can be given economic logic end is ring because of the fact that beginning from individuals to a group of people, they perform similar economic activities as individuals and group which they belong to as anation. we are limiting to a national economy is because of the fact that financial discipline, monetary system is followed by all citizens of that country.
In order to create a shape of economy is limited to a national economy and all the individuals and the groups whether is represented by business enterprises association of people any group, state or corporate entities. shape which has a sphere which is called the sphere of economy (SOE) within this sphere, square is also created to illustrate the interdependence and fluctuations within the geometrical pattern of a square. in state of equilibrium a perfect sphere is created and within the perfect sphere a perfect square is drawn, this is termed as square of stability of economy (SOS). The four poles of a square are represented by four fundamental forces of economic activities, but they represent different economic activities. consumption and production are essentially physical activity because they require a physical commodity that can be produced, consumed and can be traded as well.
How economic Activities Interact?
Basis of formation of mathematical formulas and Scientific Reasoning:
If we examine the square of stability, you will find four poles having a “Plus (+)” and “Minus (–)” sign assigned to each of them. this can be understood mathematically also and if we want it to compare with the magnetic principle, it can also be understood very clearly. Every graph demonstrated, has plus pole and a minus pole.Plus (+) sign always attracts minus (–) pole. If we compare Minusto minuspole, it will always ripple each other, this is because of the fact that magnet has only two poles plus and minus pole.
No magnet can have only minus pole or plus pole, it cannot exist. Similarly, interms of mathematics if plus is more only then the minus can be deducted from it not otherwise. if the minus is more in that case it is a decline. one can easily understand why the income is a Plus(+) because whenever one earns as the income, he gets it for consumption and consumption is shown as a (–)sign. the economic logic is this that unless income is more than consumption,only then the saving will result. if expenditure is more than the income then consumer is forced to take a load or otherwise get some source of money to enable the consumption. why saving is so important because this is the backbone of our banking system.
In graph given below, one can find,there are four poles which repel each other. Same four poles attract each other this is to illustrate only theperfect sphere is formed at a later stage and how the fluctuation in the strength of four poles affect the size of stability of economy as well as the ideal shape of economy.
The square of stability can be further divided in different geometrical patterns to denote various factors which balance the shape of square and how they disturb the sphere of economy there are two basic physical activities of consumption and production and two basic economic activities of income and expenditure we can group the physical activity and production activity together and we can also group two monitoring activity of income and expenditure so we have a resultant to rectangular within the square which we have shown in Analysis horizontal division of economy in a perfect stage of equilibriumthe size of these two rectangles is always same.
Similarly, to monetary values of consumption sorry income and expenditure when they equal each other it can be represented as rectangular shape to denote the equality of monetary values so lower half is physical and the upper part of the square is monitored. whenever the monetary rectangle gains higher area, it occupies it means the production the physical value is lower than the monetary value of income and consumption. this also proves that if money circulation is more than the consumption and production, there is a tendency to create condition of inflation. when higher monetary value chases a shorter commodity available in the market. higher demand and less availability will alwayscause price of commodity to increase and this, called inflation.
Four squares of Economy
Another pattern resultsare foursquares of stability. each pole of income, consumption, production and expenditure can represent the four poles of stability. they represent equal area, in perfect state of equilibrium. the first change in the area of pole activity always results in the change of the size of that pole which helps us to understand how much changed area has taken place due to change value assigned to that pole activity.
Emerging Four Triangles
Fourthshape is triangles which are also of equal size, in state of perfect equilibrium. as soon as the pole value is changed, it results change in area of four triangles.The first triangle joins income and expenditure both are monetary value second triangle connects the pole of income with consumption that represents demand. third triangle connects the pole of consumption and production, to denote physical stability.Similarly, fourth triangle that integrates production with expenditure represents supply. four basic geometrical patterns they represent their size also and how a particular change in the value of pole of consumption income expenditure and production is affecting the whole of the economy.
Eight Balancing Triangles
There are also eight smaller triangles which are named as balancing triangles. function of these triangles is to denote how in opposite direction the balance is disturbing. if there is a monetary valueis gained something It must reciprocate also.
