The Wealth Effect

As always, when it is time for me to sit down properly and study and do some proper work, I will somehow find myself back here. There is some scientific theory here, I'm just not smart enough to put my finger on it just yet. Smartypants out there, please post your postulations.

On an unrelated note, I will now make known to the world the noble reasons, the greater purpose behind the activity that I so often partake in which has caused me to be greatly misunderstood on several occasions -- cab taking.

Why is it that V takes cabs more than the average singaporean?

The answer, my friend, is in Economics.

Those of you who have taken Economics at A Level would know what I am talking about. However, because I am so nice, I will endeavour to explain this to the ignorant.

You see, the more you spend, the more the economy can grow, which benefits the total wealth of the economy. In essence, the entire country's total wealth increases, because of what you have spent as an individual. When I spend more on cabs, my money goes to the cab driver, who now has money to sustain his living, he has that little bit of money more to spend on maintaining his cab, buying food and paying the bills for his household. This increased spending then translates into increased sales from the businesses he patronises. Altogether, there is an aggregate effect -- called aggregate spending, which will have macroeconomic implications. WHA--?!

Let me explain.

Now that there is increased consumer spending, the economy will now chug along just a little faster. There is now increased demand in all sectors of the economy, e.g. service sector, retail sector... etc. More good are demanded. Hence, there will be more jobs created to cope for the increased demand in these sectors of the economy. Therefore, my little act of spending money has solved many UNEMPLOYMENT problems in the economy.

With the increased total output of the economy, the country's total assets will now have increased. This means that the nation's Gross Domestic Product (GDP) has now risen. In layspeak, it means that the country is now WEALTHIER.

So you see, with my single act of taking a cab, I have done my part as a Singaporean and helped the economy achieve two very noble goals: DECREASE UNEMPLOYMENT and MADE SINGAPORE RICHER.