Economy For Dummies

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Economy For Dummies

Post by Amli Nujhan on Wed Apr 06, 2011 5:17 pm

Original Article HERE

O F F I C I A L--- e M A L A Y S I A N --- G O V E R N M E N T
MINISTRY OF EDUCATION


The first six month after I was born in eRepublik, I lived my life merely as a beggar.
Stupidly I ran amuck in a war on my first day till I was so weak that I couldn’t stand on my feet.
Got involved into this game not by anybody’s recommendation, I do not have friends to help me properly. It took me quite sometimes before I get to know the function of our Social Office.
I relied upon Q1 bread supplied by the Social Office and hoping to recover.
With my poor health made my productivity was so low that I got kicked of my job every 3 days or so.

The economy was not so good back then. I just couldn’t afford to recover my health.
Then came the era of eSerbian PTO. The economy got worsen, market price and taxes were sky rocketing high. Many players quitted the game or migrated to some other countries, and never come back. As a blocker congressman of that time, I was a professional beggar.
It was a pathetic life.


WORKING and ECONOMIC SKILL

The 1st Thumb Rule: Always work with the tip-top your wellness. Always!
In a good health your productivity will be higher. You may secure your job or even get salary raise.
But the most important is your Economic Skill will levelling up faster. It is one of the main targets in character building.
Productivity = Economic Skill
If you punctually attend your daily work for 30 consecutive days, you may get an award plus 5 Gold.

You can choose one of the 4 options to boost your daily work:
• Single Espresso; Free = 10%
• Double Espresso; 0.19 Gold = 50%
• Brainstorming; 0.79 Gold = 100%
• After Work Party; 0.99 Gold = 200%
• Extra 10% introducer bonus per player. Maximum 2 players introduced giving 20%.

It is not recommended to spend Gold to apply booster. Better save the Gold for your Training instead.
With excellent daily productivity you can produce more for the company you are working for. Have a good contact with your manager; befriend him. Do not hesitate to ask for your salary raise after your Economic Skill level up.

COMPANY

We can estimate how much profit the company may gain out of our productivity.
After we are done with our job, a few numerical figures are displayed. To do our simple calculation here, please pay attention to how many finished product you create.

(Finished product) X (lowest market price) = total sale
(Total sale) – (salary paid) – (extra costs) = profit
*Raw Material companies do not have those extra costs. They are charged for Manufacturing industries only, which are the costs of the required Raw Material and taxes.

Let me show an example of my own productivity in a Grain company.
I produce 110 Grains, multiply by MYR 0.80 (market price): giving us MYR 88.00 of total sale.
MYR 88.00 minus MYR 25.00(my salary): giving the manager MYR 63.00 of clean profit. WOW!
That's only from me, what if he has 10 employees in that company...
And, altogether he possesses 7 companies... You do the maths.

I think I should ask my manager for a raise.
On my second thought, I won’t be doing that. A week ago when the price was just MYR 0.10 he maintained my salary even though in theory he was losing money.
I said it was only a way to estimate, because only the manager knows how much money he’s really make.

So, what are you waiting for? Set up your own companies and be rich.


Basic Facts About a Company

Basically there are 2 categories of company.
• Raw Material
• Manufacturing Industry
We are given 2 free land lots. It is good if you can create 2 companies at once.
A manufacturing company and the other is the Raw Material production for self relying supply.

The relations are as follows:
- Grain for Food
- Oil for Moving Ticket(MT)
- Iron for Weapons
- Stone for House, Hospital and Defence

But if we check on the World Map, we will find that each region is blessed with a resource. Sarawak is a high region of Rubber; Sabah is the Fruit region; and the Peninsular Malaysia is rich in Oil.
There are other resources too. So what are they for?

For a region with a main Raw Material, it will add up extra 25% to the related Raw Material production. And together with other the supportive resources, each resource give 5% to the related Manufacturing Industry.

- Grain regions giving 25% extra Grain production
- Iron regions giving 25% extra Iron production
- Stone regions give 25% extra Stone production
- Oil regions give 25% extra Oil production
Listing out the extra 5% resources relation is as follows:
- (Grain, Fish, Cattle, Deer, Fruit) = Food
- (Iron, Aluminium, Rubber, Oil, Saltpeter) = Weapon


To understand this clearer, let us visit a larger country for an example; eCanada:
6 Fish regions: 5% Food productivity
3 Cattle regions : 5% Food productivity
1 Deer region: 5% Food productivity
1 Fruit region: 5% Food productivity
Summing all of the above, giving a total of 20% extra productivity for Food Industry.
Pity they don’t have Grain, as it may add up another 5%; giving maximum of 25% to Food.

In other regions, they also have
1 iron region: 5% Weapon productivity
2 aluminium region: 5% Weapon productivity
Giving eCanada 10% extra productivity for Weapon manufacturing.
That Iron region also helping 25% of Iron production

Back in eMalaysia, we have Fruit helping up 5% for Food; and rubber gives 5% to Weapon.


Oh my… Half of my readers snooze off with those Macro Economic stuffs. Zzz Zzz Zzz…
Pardon me… Where were we? Let’s go back to company discussion.

RUNNING THE COMPANY

To erect a company, you need to spend 10 Gold.
It is advised to reserve another 10 Gold or loose currency(MYR) as back up. Never solely rely on daily income to pay for your workers and buying Raw Materials. If it happens you are running out of the required Raw Material to continue production; or if you do not have enough money to pay the salary, then the workers can’t do their job for the day. You may lose some workers. It is much regretted but most of the players are aiming to get their Hardworking award, leaving them no choice but transfer to a new job in another company.

To get a new worker you can advertise your offer in the Job Market. If you have your own newspaper, you can publish about the vacancy together with attractive incentive offers that may ‘steal’ good workers from other companies. You also can get good workers by socializing in IRC and having direct interviews. Don’t take too many workers if you do not have a strong financial background. It’ll be troublesome when the market price is low and you have too much unsold excess products, at the same time the overhead burden is heavy.

Be good to your employees, keep communicating and encourage them. Monitor their productivity and please let their salary constantly changing in parallel with the market price. From time to time I do give bonuses to my workers too.

After a while you may consider upgrading your company to a higher Q. If you want to export your product to other countries, please study the foreign market carefully before you decide to buy an Import Licence. How large is the market, how hard is the competition, how high are the taxes etc.

If you think I have given a quite thorough guide upon eRepublik’s economy, then I must humbly say that I am just able to uncover the tip of the iceberg only. If not because of much complicated and lengthy discussion ahead, I may have tried to uncover the games of the world class tycoons and conglomerates too.

You may try to find your future way ahead through several activities:
- Gold and Currency Exchange. The Forex speculation
- Buying and reselling companies
- Corporations
- Loan and Financing
- House

_________________________________________________________________________________

I think I should briefly cover Macro Economy for the understanding of economy at national and international scale. We do not want our elected congressmen who have no idea about the laws they are proposing and do the voting.

Resources: I have explained this earlier
Import: Tax applied by the government to any foreign goods selling at local market.
Gross Domestic Product (GDP) : We normally see this in Presidential Election manifestos. It is our national income calculated from the total market activity in 30 days.
Inflation: refers to the change in the prices of good in eRepublik over time. Inflation can be thought of as a decrease in the value of the unit of currency and it is believed that high rates of inflation are caused by high rates of growth of the money supply. It is calculated from the rise of prices sold in Marketplace in a week time frame.

We should understand that this game is built primly on the war module. Thus it’s the war that generates the whole economic system. I have discussed about the ‘Perpetual Warfare’ economic theory in my article long time ago. Please understand that. Without war, the economy will become stagnant in the murky water.

How does a destructive war can be positive to economy? People need more food and more weapons. The trading will be active. Money exchanges from hands to hands. When the money constantly flows around, it will generate economy as shown in GDP.

A simple ‘Close Economy’ theory of money is like this: I got MYR10 from the Grain my company harvested, which I use it to buy some food from TeMing; then TeMing uses the same MYR10 to buy a Q1 weapon from VideoJack; after that VideoJack uses the money to buy a Moving Ticket… In practical, that single MYR10 bill has actually changing hand 3 times. In the process it has generate MYR40 worth of economy. Yup, the ‘real’ value of that money is now MYR40… Sounds like magic eh.. Does money really comes out of thin air? Not so, it originated back to our resources like Grain and Iron which we get them for free from Mother Earth.

As long the money stay in circulation, it will continue flourishing the economy. If you are piling your money and Gold under your bed, it’s hibernating. Invest it somewhere and keep it rolling.
But once Video Jack spent that MYR10 to buy imported goods, that portion of our money will flow to other country.

So, ‘Buy eMalaysian’. We can control Inflation.
Exporting goods also helps to bring in capital flow.

Money will eventually die off if it goes together into the grave of a dead citizen; or being converted into Gold and spent to be swallowed by the game system. But that’s another story.


If you are hippies who believe in ‘Peace Not War’, please go and play Zynga’s YoVille instead. There you can spend your wealth upon fashion trends, entertainment and girly stuffs.
If you still want to follow ‘Keynesian Economy’ theory, all you have to do is always taking the previously called Keynesian 200% working bonus (now inappropriately called the 'After Work Party’); and for that purpose you have to constantly buy Gold every day from Plato.





Signing Off,

Minister of Education,
eMALAYSIA


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Amli Nujhan

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