Price elasticity of demand and supply, income elasticity, direct and indirect taxation, economic fairness and the Greek Christian Orthodox approach.

Dr Michel Zaki Guirguis 09/09/2014Bournemouth University1

Institute of Business and LawFern BarrowPoole, BH12 5BB, UKTel:0030-210-9841550Mobile:0030-6982044429Email: guirguismichel@yahoo.co.uk

Biographical notes

I hold a PhD in Finance from Bournemouth University in the U.K. I have worked for several multinational companies including JP Morgan Chase and Interamerican Insurance and Investment Company in Greece. Through seminars, I learned how to manage and select the right mutual funds according to various clients needs. I supported and assisted the team in terms of six-sigma project and accounts reconciliation. Application of six-sigma project in JP Morgan Chase in terms of statistical analysis is important to improve the efficiency of the department. Professor Philip Hardwick and I have published a chapter in a book entitled “International Insurance and Financial Markets: Global Dynamics and Local Contingencies”, edited by Cummins and Venard at Wharton Business School (University of Pennsylvania in the US). I am working on several papers that focus on the Financial Services Sector.

Abstract1 I have left from Bournemouth University since 2006. The permanent address of the author’s is, 94, Terpsichoris road, Palaio – Faliro, Post Code: 17562, Athens – Greece.

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In this article, we are going to explain and analyze the different price elasticities of demand in relation to prices with intention to show the relative effects of the price and quantity movements along the demand and supply curve. In addition, we will include the variables that constitute the Greek Christian Orthodox approach to show how they affect the cross elasticity of demand of household income, the substitutes and the complements. The main issue is when the money supply changes and the price levels go up or down, then, they affect the quantity demanded or supplied. These changes create elastic or inelastic demand for the available products. They affect direct and indirect taxation in terms of duty on tobacco, duty on illegal drugs, duty on a pint of Welsh beer, duty on a bottle of Tennessee Whisky, duty on a bottle of Amstel and Heineken beer, duty on a bottle of Australian Whisky, duty on a bottle of Bacardi, duty on a bottle of Stolichnaya Vodka, duty on a bottle of Dewar’s Whisky, duty on blended Irish Whisky, duty on a bottle of CuttyShark, duty on the alcoholic liqueur Kahlua, duty on petrol per litre, income tax and base rate of interest. There will be no taxes on beers and Whisky that are made with wheat or corn and without alcohol or Fruit punches without alcohol. To achieve Greek Orthodox economic fairness, we have to adjust the tax rate based on household disposable income and consumption. For example, the government by adopting a reflationary fiscal policy, it could reduce the lower tax rate from 10% to 8%. It could reduce the basic rate of tax from 22% to 20%. It could reduce the top rate of tax from 40% to 30%. It could reduce the base interest rate by 1 percentage point. Finally, it could increase government expenditure by 3%. Ignorance of the Orthodox approach and the related variables create excessive consumption, negative effects in the household lifestyle and a sustainable sinful condition without positive prospective for changes. The government should use different classes of taxes such as regressive taxes, progressive taxes and proportional taxes to achieve economic fairness and equilibrium with the Greek Christian Orthodox approach.

Keywords: price elasticities of demand, demand and supply curve, factors that affect the elasticity of supply and demand, income elasticity, cross elasticity, elasticity of supply, Greek Christian Orthodox religion.

Introduction

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Elasticity of demand is very important concept in economics, as it determines the degree that each product is elastic or inelastic in relation to the price and the disposable income of the households. When the prices go up, then, the quantity demanded will fall, and the quantity that suppliers will produce will go up. In contrast, when the prices go down, the quantity demanded will increase, and the quantity that suppliers will produce will go down. The main question is how to balance the percentage change or the extent of the change in production in relation to the Greek Orthodox Christian approach and its related variable. Price elasticity of demand shows the changes of the demand of the product in relation to changes in its price. When the price of elasticity of demand is less than one, then, it is inelastic. The demand of the product is not responsive to price changes. In contrast, when the price of elasticity of demand is more than one, then, it is elastic. The demand of the product is responsive to price changes. This means that the demand decrease by a larger percentage than the percentage rise in price. The steepness of the downwards demand line shows if the product is elastic or inelastic. The degree of the steepness of the line should be integrated with the variables of the Greek Christian Orthodox approach to correct the deviations from elastic and inelastic condition. On the other hand, factors that affect the price elasticity of demand are availability of substitutes, the time span, and advertising and price strategies from the companies that are competing in the same marketplace. Then, we will consider other elasticity’s of demand such as income and cross elasticity. Finally, we will briefly discuss about elastic and inelastic elasticity of supply.

The rest of the paper is organized as follows. Section 1 describes the building blocks of the Greek Orthodox Church. Section 2 describes the successful manipulation of thoughts. Section 3 describes the price elasticity of demand, income, cross elasticity, supply elasticity, the factors that affect it and the interrelation with the Greek Christian Orthodox approach. Section 4 summarizes and concludes..

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1. Building blocks of the Greek Orthodox Church

The building blocks that constitute and sustain the faith of the Greek Orthodox Christian is the belief in the Holy Trinity, Holy communion, the powerful presence of Theotokos or Virgin Mary, the fleet of Saints in terms of hermits, ascetics, spiritual sacrifice, the David’s Psalms, Holy Bible, Byzantine music, fasting, the cross and the resurrection of Jesus - Christ.

The Holy Trinity is composed from the father, the son and the Holy Spirit. The unity in one person is not static but dynamic interrelation of the Holy Spirit under the roof of the grace of the son and the love of the father. The unity of the Holy Trinity supports you with harmony, love and peace of yourself, primarily, and then with the fellow - citizens and the environment.

The Holy Communion is an essential part of the Liturgy taken inside the church every Sunday and during celebration of Saints days. Repentance and confession, which constitute a second baptism, should take place before the Holy Communion. It helps the individual’s to strengthen his/her faith to the Holy Trinity and to protect him/her from the devil. If the individual commune the Divine Mysteries without the appropriate preparation that will be mentioned from the spiritual father then the sins become larger and worse.

Theotokos or Virgin Mary, the mother of Jesus-Christ, occupies an essential place in the heart of the Greek Orthodox Church. It symbolizes the second Eve and selected from God to continue the salvation of the mankind through her son, who represents the new Adam. She protects the Christian Orthodox from the various types of demons and encourages him/her during difficult times with patience and faith. For a more detailed analysis of the various types of demons, please refer to the book of Saint John Sinaet (2006), named the Ladder. Unfortunately, the ancestral sin of Adam has destroyed the divine relationship and created disequilibrium in balancing the evil from the good thoughts. This condition or tendency of the heart towards sin remains even after the baptism has removed the ancestral sin. The mystery of Chrism, which follows the mystery of baptism, seals the newborn with the grace of the Holy Spirit. Thus, spiritual sacrifice with the grace of the Holy Spirit is the next step to stabilize the spiritual effort. It helps the person to reconcile and sustain a healthy mind through the examples of hermits, ascetics and Ηoly Fathers of the Greek Orthodox Church.

Spiritual sacrifice is defined in terms of rejecting personal will and following the will of God through the Ten Commandments. Fear, defined in a positive manner, not to break the commandments and keep an active ascetic profile is a substantial factor that keeps alive the faith towards God. At this point, it is worth to distinguish between obedience and pure discipline. Obedience created and based on love to approach God has complete different interpretation and result from the pure discipline that is cultivated and developed in other institutions. Obedience inside the Greek Orthodox Church has a positive and healthy characteristic. It is based on the freedom to approach the Holy Trinity through the applications of the Ten Commandments and continuous prays from the individual’s and the spiritual father. Pure discipline without religious characteristic has negative effects, as most of the time, is based on unbalancing power and imposition of force in a negative way to dominate on the situation. A good example, to mention is the Holy monk Porfirios that teaches us to

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pray for our children and fellow - colleagues when we face a problem with them. The results will be much better by approaching the Theotokos rather than by believing or depending solely on our capabilities. Obedience will help the individual to achieve various stages of spiritual successes. In addition, the individual’s need to learn how to recognize, manipulate the thoughts by rejecting the bad and accepting the good ones. This can only be achieved through prays to the Holy Trinity, Virgin Mary and the help that you get from the spiritual father.

The David’s Psalms contain different types of hymn to God. For example, Psalm 50 is a prayer for forgiveness and Psalm 136 is a hymn of thanksgiving. The Holy Bible comprised from the Old and New Testament is an essential core of the base of the Greek Orthodox Church. They display the main event of prophets, Jesus-Christ, his mother and the apostles.

Byzantine music constitutes a fundamental part of the Greek Orthodox Church. The Divine Liturgy, Vespers, the hymns of David’s Psalms, The lamentations, the small and great canons of the Theotokos and the service of the supplicatory canons to Archangels and Saints are based on Byzantine music. The requirements to protect one of our sense gates, such as hear, favour this type of music. It is essential to protect us from the evil thoughts, as we will see in the later section of the manipulation of thoughts.

Fasting is an integrated and essential part of the life of the Greek Orthodox Christian. During the ecclesiastical year, there are various periods of fasts. The main fasts are Wednesday’s and Friday’s fast, the fast before the birth of Jesus-Christ, the fast of Great Lent, the fast during the month of August, which is concerned with Virgin Mary, the elevation of the cross. All fasts and especially the fast of Great Lent, which starts with the Publican and the Pharisee Gospel passage, help the individuals to strengthen their faith and spiritual effort through continuous repentances and prostrations. Fast should be avoided if the person faces bodily illness. To fast or not has to be discussed and solved with the help of the spiritual father.

The cross and resurrection constitute the base of the win of Jesus-Christ from death. They are based on the belief that your spiritual effort in this life is a continuous condition that will count after your death, and will have an eternal characteristic. Thus, after your death, you can not change anything in terms of your actions, good or bad, that were reflected in your attitude, behaviour and saying that were seen or unseen. Death is just a temporary change of status until the judgment day. Thus, if the spiritual effort and less the physical is based on the commandments, sincere and fair progress throughout the life of person, under the supervision of the spiritual father, then, there are increased chances to safeguard the purity of the soul. The fact that, the author’s use the expression increased chances is because the life of the individual’s until his/her death is a continuous effort to safeguard the will of God with ultimate objective to save his/her soul. Thus, there are many spiritual falls and illnesses of the soul that could be recovered through the mystery of repentance followed by confession.

On the other hand, if his/her effort was not based and blessed under the Holy Trinity and no confession took place in the whole phase of the life of the person, then, the reward will be eternal hell. By the term eternal hell, I mean the outer darkness, the

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unquenchable fire, the unsleeping worm and the gnashing of teeth followed by innumerable torments. Τhe remembrance of the term eternal hell helps tremendously every individual to obey better to the Ten Commandments and avoid a sinful lifestyle. The fact that the individual’s has compromised to stay in a sinful condition leads him/her to eternal hell. Thus, as God is love, it will be unfair to change the status or habits of the person and adapt him/her to new reality, namely, in the upper Jerusalem with the Saints. An excellent source of reference is the Sacred Augustine known as ‘the son of tears’. In the book written by Mperati (2005), there is a clear illustration of how poor decisions away from God can destroy the personality of the individual’s and how repentance and confession could save his/her soul.

2. The manipulation of thoughts

Thoughts constitute the invisible part of the mind of the person that is liable to the continuous flow of thousands of decisions that affect his/her life, the life of others and the results of his/her actions in the society. The organs constitute the human body and work in perfect harmony to sustain life. In a similar way, thoughts have to be regulated, structured and manipulated with the functioning of the heart to achieve equilibrium in terms of faith to the Holy Trinity. The problem is that after the ancestral sin, the mind has lost the initial pure functionality, which was to praise God and get divided into good, vain and evil thoughts. The biggest problem that we are facing, nowadays, is how to distinguish between them, balance them and isolate the evil thoughts that create substantial damage in our life in terms of the decisions that we take in a daily basis.

The golden rule, to firstly start this discussion, is that without the presence of God in terms of prays and guidance of the spiritual father under the Greek Orthodox Church, we can not trust and be totally sure that what we are thinking or saying is correct or good. The devil and the various demons could affect the will and ambition of the individual’s and captures him/her under a spirit of conceit or haughtiness. Lack of humility and the mixture of thoughts according to daily problems and circumstances create anxiety and despair, which should be avoided by continuous prays to Virgin Mary. The ultimate objective is our soul salvation. By setting our actions, as an example, we contribute to the salvation of the persons that are surrounding us irrelevant from their age, sex, religious background, nationality and literacy level.

Vain thoughts are created from the relaxation of the mind that God is not an active observer in our lives, hearts and thoughts. The lack of faith and deviation from the basic necessities of life reinforce vanity thoughts at the expense of the peace of the soul. The successors of vain thoughts are evil thoughts that start to erode the building blocks of the soul until the final destruction of the healthy functionality of the mind and the corruption of heart with evil thoughts.

Evil thoughts are derived from external and internal causes. The external causes are related to five senses such as sight, hear, smell, taste, and touch. Each sense has to be carefully monitored and protected through holy gates that are installed to each one according to his/her spiritual effort to keep and implement precisely the will of God. Thus, according to the degree of your effort you get blessed and better protected from indecent sights, obscene words and irritated perfumes. In addition, the person manages to control excess and beyond necessity food and drink and improper touches

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of his/her body with soft materials. They result to relaxations of the body and creations of improper fantasies and sinful thoughts.

The internal causes of evil thoughts are related to imagination, passions, demons, and the already corrupted nature created after that the ancestral sin took place. Let’s analyze each cause. Imagination, which is fed mainly by sight and hears, affects the way by which we perceive, understand and structure the images around us. It also affects our future prospect, consumption habits, and ambitions. The stimulus that affect our senses and create an internal picture of the external world has to be based on religious background in terms of fast, prays, and consultation with the spiritual father in a continuous basis. If the stimulus is wrong, then they are going to create a malfunction of the mind and erosion of the soul with many negative effects. As a result of the acceptance of bad thoughts, we can mention minimum efficiency, spiritual pollution and therefore physical pollution of the environment.

Passions created outside the Greek Orthodox Church creates negative externalities with high costs as there is no balance between the various emotions such as love, hate, pleasure and pain. The faith inside the Orthodox Church is to love God with all your heart, soul, power and intellect part of your mind. This is the first commandment. The second commandment is to love your neighbour as you love yourself. The face of the fellow-citizen reflects the Holy Trinity. The first two commandments are very important to understand that the person is image or picture of God with ultimate objective to achieve resemblance. Thus, the various emotions are eliminated or better controlled as they are managed in line with the Commandments. Once the individual manage to get blessing from the application of the first two Commandments, then, he/she will progress towards the application of the remaining eight Commandments. Finally, the individual’s will get help to balance the various emotions with the help of the spiritual father and the examples that the Holy Fathers of the Greek Orthodox Church.

Demons analyzed in an excellent way in the book of Saint John Sinaet (2006). This book is a masterpiece that teaches you the art to defend yourself from evil thoughts. He teaches you how to stop the various attacks and get out from the various snares that the demons are trying to set up around the individual’s heart. They are trying to steal the treasure from the inner part of the roots of the person heart with ultimate objective to lead and sustain him/her in a sinful situation until his/her death. Τhey try to take advantage from the fact that passions are recrudescent. Thus, they are trying to guarantee that the individual’s will get eternal hell rather than salvation of his/her soul.

Finally, it is the already corrupted human nature after the fall from paradise and recorded as the ancestral sin. The purity of the soul, intellect and innocent understanding of life has been eroded and shacked substantially. The evil thoughts started to occupy a predetermined place in the mind, heart and soul of various persons. The lack of proper faith, in terms of a Greek Orthodox Approach, that is trying to find an equilibrium point to reconcile the damage, has resulted to even worse results. People are loosing their identity in a daily basis. Globalization of different cultures, ideas and nationalities without an integrated roof of clear guidelines of a viable religious approach has created further complexity. The success of decisions making in terms of economic, social, and religious outcomes will have to be based

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upon our interaction with the Orthodox Church primarily. For a detailed analysis of the manipulation of thoughts and senses please refer to Saint Nikodemos the Hagiorite (1819).

Section 3 describes the price elasticity of demand, income, cross elasticity, supply elasticity, the factors that affect it and the interrelation with the Greek Christian Orthodox approach

Price elasticity of demand measures the extent of a change in the demand for a product in response to a change in its price. The mathematical formula is as follows:

(1)

Where are changes in the quantity demanded. are changes in the prices. Q0 is the initial quantity. Q1 is the new quantity. P0 is the initial price. P1 is the new price.

For example, the initial price of an alcoholic bottle is P0 = 5.25 Euro. The new price is P1 = 7.15 Euro. The initial quantity is 140 and the new quantity is 120. By substituting the values into equation 1, the mathematical formula will be as follows:

The fact that 0.39 is less than one means that the price elasticity of demand over its price is inelastic and the demand for this alcoholic beverage is not responsive to the price changes. Thus, increase in prices creates a small percentage change in quantity and a fall in total government revenue. The downward demand curve is steeper. The main idea is that by increasing the price of the bottle of Whisky, Vodka, beer etc, and imposing duty the government aims to reduce consumption. The government target to reduce the quantity of this alcoholic product that creates many problems to the households that are used to drink alcohol regularly. A lot of students in Europe drink a lot of alcohol as a temporary solution to their problems. Finally, they get behavioural and socialization problems and hurt their kidney. The government taxation measure should be associated with the Greek Christian Orthodox approach. The purpose is to strengthen the faith of the individual towards the Holy Trinity and towards the mother, Theotokos, of Jesus – Christ. In addition the great canon of Saint Andreas from Crete is a powerful tool to help the students to understand the complexity and the results of a sinful lifestyle based on alcohol and cigarettes.

Graph 1 shows the movement along the demand curve due to changes in prices.

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Price (P) P1

Change in prices Elastic demand

P0

Relatively small change in quantity 0 Q1 Q0

Quantity (Q) Government should use elasticity’s for indirect taxation to affect the quantity demanded and not to increase government revenue. Examples that we could mention are duty on tobacco, duty on illegal drugs, duty on a pint of Welsh beer, duty on a bottle of Tennessee Whisky, duty on a bottle of Amstel and Heineken beer, duty on a bottle of Australian Whisky, duty on a bottle of Bacardi, duty on a bottle of Stolichnaya Vodka, duty on a bottle of Dewar’s Whisky, duty on blended Irish Whisky, duty on a bottle of CuttyShark, duty on the alcoholic liqueur Kahlua. The purpose is to increase taxation to affect the quantity demanded, to safeguard the health of the individual and align him/her with the principles of the Greek Christian Orthodox approach. The objective of the government is to make sure that the Orthodox households have strong faith towards the Holy Trinity and the mother of Jesus - Christ Virgin Mary. In addition, they have to make sure that the Orthodox variables are in place such as repentance, confession, Holy Communion, prayers, fast, prostrations, vigil, almsgiving, rejection of personal will, appreciate Byzantine music, humility, strong believe that Jesus- Christ was resurrected. Alcohol and cigarettes affect the central nervous system and the lungs negatively. The individual starts to depend on them as a means of relaxation and to escape from his/her daily problems. The things get worse as the time passes and the individual get addicted to bad habits, passions and finally the health problems start to appear. The purpose of the individual is to save his/her soul and enjoy his/her life within the 10 commandments of the Gospel. Enjoyment has to be based on the principles of the Greek Christian Orthodox approach and not to seek enjoyments based on a sinful and wrong lifestyle. Repentance, confession and Holy Communion associated with prayers and fast should take place regularly and be the ultimate objective of the Orthodox individual until he/she passes away. Any deviations are associated with spiritual falls and health problems and costs. Precaution is better than the cure.

The spiritual goods or variables that constitutes and support the faith of the Orthodox individual are strong faith towards the Holy Trinity, Virgin Mary, repentance, confession, Holy Communion, prayers, fast, prostrations, vigil, almsgiving, rejection of personal will, appreciate Byzantine music, humility and strong belief that Jesus – Christ was resurrected.

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Graph 1 Adjustments with the help of Faith towards the Holy the spiritual father through Trinity repentance, confession and Holy Communion.

TimeThere are cases that the adjustments took long time for the individual to adjust and are supported from continuous prayers and fasting from the spiritual father.

Graph 2 Adjustments with the help of theFaith towards Virgin spiritual father through Mary repentance, confession and Holy Communion.

Time

There are cases that the adjustments took long time for the individual to adjust and are supported from continuous prayers and fasting from the spiritual father.

The same applying for the rest of the variables that constitutes the Christian Orthodox approach. The only difference is the variable humility, which has a downward curve.

Graph 3 Humility

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Of the Orthodox individual Adjustments through the help of the spiritual father.

Time

There are cases that the adjustments took long time for the individual to adjust and are supported from continuous prayers and fasting from the spiritual father.

The tax revenue that the government is getting should not be at the expense of the individual’s health. Factors that could affect the price elasticity of demand are products, which can replace other products, the time span and the pricing strategies of other competitors. In addition, through elasticity’s the government affects the base interest rate and direct income taxes. For example, the government by adopting a reflationary fiscal policy, it could reduce the lower tax rate from 10% to 8%. It could reduce the basic rate of tax from 22% to 20%. It could reduce the top rate of tax from 40% to 30%. It could reduce the base interest rate by 1 percentage point. Finally, it could increase government expenditure by 3%.

We are going to mention few additional examples of price elasticity of demand between Whisky, beer and cigarettes .The government imposed a duty or indirect tax of 30% on every pack of cigarettes. If the demand of cigarettes or tobacco decreases by 2%, then, the elasticity of demand of cigarettes will be as follows:

For simplicity, let’s assume that the Greek government would like to calculate the elasticity change between two products such as Whisky and beer to determine if they are elastic or inelastic and if there is increase or decrease in total revenues.

Whisky

The current price of Whisky is 20 Euro and the demand is 2,000 bottles. If the government make the mistake and decreases the price to 15 Euro, then, demand will increase to 4,000 bottles.

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The price elasticity of demand of 4 is elastic, as it is greater than 1 and a fall in price would result in a large increase in quantity demanded and the total revenue will increase. The revenues at the initial price are 20 x 2,000 = 40,000 Euro. The revenues at the final price are 15 x 4,000 = 60,000 Euro. Thus, increase in total revenues is 20,000 Euro.

Beer

The current price of beer is 3 Euro and the demand is 1,000 bottles. If the government increases the price to 8 Euro, then, demand will fall sharply to 100 bottles. In this case, the government took a wise decision to protect the spiritual integrity of the Orthodox individual.

In this case, the price elasticity of demand of 0.54 is inelastic, as it is less than 1 and a fall in price would result in a small increase in quantity demanded and the total revenues will decrease. The revenues at the initial price are 3 x 1,000 = 3,000 Euro. The revenues at the final price are 8 x 100 = 800 Euro. Thus, decrease in total revenues is -2200 Euros. The Greek government should always remember that the aim is not to increase revenues at the expense of the health of the ignorant or addicted households or students. The purpose is to help them to align their life with the principles of the Christian Greek Orthodox religion. Sources of revenues could be obtained from the Financial Derivatives market. Please check my Derivatives book for further details.

The income elasticity of demand for a product indicates the changes of demand in relation to household incomes. The mathematical formula is as follows:

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For example, if the quantity demanded for an alcoholic product increases for 12% in relation to a 8% increase in income, then, the income elasticity of demand would be 12 / 8 = 1.5. Income elasticity is defined in terms of positive or negative value. For example, cigarettes and alcoholic beverages should have a negative income elasticity of demand as income rises. They should be considered as inferior goods. Similarly, negative income elasticity should apply for luxury goods that create more needs and consumption and create conflict with the principles of the Christian Greek Orthodox religion. For example, spending on luxury boats, cars or travelling overseas to New Zealand from Europe will be more elastic as more income is needed to cover the expenses. These expenses are unnecessary and the money could be used to help the local beggars, the poors and the prostitutes. Spending of income should focus to cover all necessary products such as bread, milk sugar, flour and butter. Thus, these products usually have inelastic elasticity of demand as the amount spent is very low.

Income should be aligned with the principles of the Orthodox approach to balance the consumption of products with the taxes imposed from the government.

Cross elasticity is defined as the responsiveness of demand for one product to changes in the price of another product. The mathematical formula is as follows:

If the products are complements, then cross elasticity will be negative and a fall in the price of one product will increase the demand of the other product. In contrast, if the products are substitutes, then, a fall in the price of one product will reduce the amount required for the other. For example, if a 10% increase in the price of Whisky decrease the quantity of Whisky demanded by 20% and increases the quantity of beer demanded by 12%, then, the cross elasticity of demand between Whisky and beer is as follows:

There should be government adjustments to produce more beverages with no alcohol by including only wheat and sugar additives.

Elasticity of supply shows the change of supply to a change in price. The mathematical formula is as follows:

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Supply is elastic when the % change in the quantity supplied exceeds the % increase or decrease in price. The opposite apply for inelastic demand. The Greek government should pay particular attention to the spare capacity that companies have to produce alcoholic beverages. It should increase the cost of production to decrease output and restrict it finally to non-alcoholic beverages.

Section 4 summarizes and concludes

To achieve Greek Orthodox economic fairness, we have to adjust the tax rate based on household disposable income and consumption. The different elasticity’s across the range of the different products allow the government to adjust the indirect tax rate and calculate the increase or decrease of revenues according to if the product is elastic or inelastic. The Greek government should pay particular attention not to increase taxation revenue by promoting cigarettes and alcoholic beverages. The situation around Europe is very terrible and a lot of persons are addicted to a sinful lifestyle with wrong manipulation of thoughts.

The Greek government by adopting a reflationary fiscal policy, it could reduce the lower tax rate from 10% to 8%. It could reduce the basic rate of tax from 22% to 20%. It could reduce the top rate of tax from 40% to 30%. It could reduce the base interest rate by 1 percentage point for companies and increase it by 3 percentage points for the households. Finally, it could increase government expenditure by 3%. Ignorance of the Orthodox approach and the related variables create excessive consumption, negative effects in the household’s lifestyle and a sustainable sinful condition without positive prospective for changes.

Bibliography

Mperati Theodoros, (2005). The son of tears, (the Sacred Augustine). Edited by the theological brotherhood Sotir.

Saint John Sinaet, (2006). The Ladder. Edited by the Holy monastery Paraklitou.

Saint Nikodemos the Hagiorite, (1819). Consulting Manual. It was first published in 1819, in the first book named interpretation of the fourteen manuscripts of Saint-Paul.

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