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BALANCE OF PAYMENTS DEFICIT: An imbalance in a nation's balance of payments in which payments made by the country exceed payments received by the country. This is also termed an unfavorable balance of payments. It's considered unfavorable because more currency is flowing out of the country than is flowing in. Such an unequal flow of currency will reduce the supply of money in the nation and subsequently cause an increase in the exchange rate relative to the currencies of other nations. This then has implications for inflation, unemployment, production, and other facets of the domestic economy. A balance of trade deficit is often the source of a balance of payments deficit, but other payments can turn a balance of trade deficit into a balance of payments surplus.
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                           ALLOCATION: The process of distributing resources for the production of goods and services, and of distributing goods and services for the satisfaction of wants and needs and human consumption. This allocation process is an essential part of an economy's effort to address the problem of scarcity. The allocation process involves decisions and choices made by consumers, producers, and governments. While producer and consumer allocation decisions are made primarily through voluntary market exchanges, government allocation decisions are involuntarily made in response to taxes and regulations.A primary focus of allocation, from an economic perspective, is efficiency. Efficiency is achieved when the highest possible level of satisfaction is achieved from available resources. Economists like to see resources allocated in such a way that efficiency is achieved. An allocation is said to be efficient if available resources, goods, and services are distributed according to the economy's highest valued uses. Consider the following examples of allocation choices. - Pollyanna Pumpernickel, a typical consumer, visits the local food market to purchase a loaf of rye bread, a jar of Dijon mustard, a package of Swiss cheese, and a few slices of honey-cured ham. She has decided to prepare a ham and Swiss on rye sandwich for lunch. She could have opted for a cheeseburger and French fries.
- Mona Mallard, the President and CEO of Mona Mallard Duct Tape Industries, responds to a surge in the sales of duct tape by deciding to build a new, highly automated factory on the outskirts of Shady Valley. She could have kept pace with demand by increasing the workforce at her current, less automated factory.
- Victor Thurgood, the honorable Mayor of Shady Valley, initiates a program in which one percent of all sales tax revenue is set aside, or earmarked, for the construction of jogging trails throughout Shady Valley. The city could have used that tax revenue to install a system of severe weather warning sirens.
Each choice affects the production, consumption, and distribution of goods and services.
Recommended Citation:ALLOCATION, AmosWEB Encyclonomic WEB*pedia, http://www.AmosWEB.com, AmosWEB LLC, 2000-2025. [Accessed: January 23, 2025].
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Today, you are likely to spend a great deal of time searching the newspaper want ads wanting to buy either a wall poster commemorating yesterday or pink cotton balls. Be on the lookout for florescent light bulbs that hum folk songs from the sixties.
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The wealthy industrialist, Andrew Carnegie, was once removed from a London tram because he lacked the money needed for the fare.
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American Assocation of Small Business
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