But both have the means of competing for a diminished supply of goods.
Slowing the economy reduces the supply of goods and services relative to the supply of money, which itself can be inflationary.
The austereian argument is that reductions in government spending will allow the private sector to generate the additional supply of goods and services.
The union said it expected any action to hit the supply of goods to hospitals, but added it had agreed emergency plans to cover life-saving equipment.
ExxonMobil said it plans to focus on the recruitment and development of local employees and the development of qualified local vendors for the supply of goods and services.
As resources such as labour and capital are released from intermediate activities into the production of goods, the overall supply of goods will increase and prices will fall.
Prices merely rise to reflect the increase in the supply of money relative to the supply of consumer goods.
If the Soviet central authorities have not gone much beyond paying lip service to the idea of cutting back military production to increase the supply of manufactured goods for civilian purposes, they have shown a keen interest in reducing the costs of that military production.
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And so the Fred should do its best to match the supply of canned goods to anticipated demand.
At the same time, supply of these goods and services might be falling.
The country's roads and the capital's airport were so congested that the supply lines of goods into Haiti were clogged, leaving thousands of survivors to scrounge for food and emergency aid.
Another area for which small businesses have not prepared as well as larger companies is in the preparation of alternatives for the supply chain and disruption of goods.
All the US consumer has seen is large additions to the stock of money without any addition to the aggregate supply of needed consumer goods.
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He understands supply chain logistics, costs of goods sold and all the stuff that most CEOs need to know.
The spread of radioactivity from Japan to China, and across the Pacific to the US is most unsettling as it may impact food prices, the ability to supply cheap energy through nuclear power and the supply chain of automotive and electronic goods to the US and other developed economies.
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If we were to, for example, double the money supply but also double the quantity of goods, then there would be no price change at all.
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But companies like these have an excess of commercial power in their particular supply chain that shifts business risks, like the non-availability of goods on a production line, to a supplier without shifting the associated profit.
This points out a fundamental fact that is key when considering the solution to our current woes: in modern, developed capitalist economies, recessions are not a function of the nation being unable to supply the goods and services desired by consumers.
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So long as you can count final goods, unmeasured improvements in the supply of intermediate services will succeed in raising measured productivity.
In fact, prices could fall if the quantity of goods increased more than the money supply (again, please see the posts linked above for a more careful and precise discussion of the factors involved).
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But the bank will probably first attempt something called chargeback, where under Visa and Mastercard rules they can try to get a refund from the bank of a business that has failed to supply goods or services.
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That Europe hasn't realized the same type of productivity gains is partly a result of its reluctance to embrace the big-box retail model, one that allows a company to take full advantage of the world supply chain to obtain and sell goods cheaply.
But the emergence of China as a powerhouse producing a variety of manufacturing goods at very cheap prices thanks to the large scale and skilful exploitation of the supply chain means that not all manufacturing jobs will be transferred from China to Africa.
CNN: Opinion: Could Africa be world's next manufacturing hub?
While Japan suffered the direct impact of a massive tsunami, which also caused a nuclear crisis at the Fukushima Daiichi plant, the U.S. saw production hit by supply chain disruptions, as Japan provides many of the intermediate goods needed to build cars. (Read Bernanke Fed Blames Commodities And Japan For Soft Patch).
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So whenever meteorologists warn of an impending hurricane, demand for canned goods outstrips supply and prices spike.
Conversely, price controls meant to keep the cost of goods higher than markets would allow create an excess of supply over demand.
For instance, it would be futile for China to keep crunching down its money supply if prices are rising not because of too much money chasing too few goods, but too many rigidities limiting the output of goods.
The prices of goods and services should be determined by the actual forces of supply and demand in their market.
Controlling the supply of rare earths means that China can also control their processing and use in finished goods, which would fit a broader effort to drive its manufacturers from low- to high-value goods.
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