Paul Boyce

Paul is a Business Economics graduate from the UK and currently an editor at Boycewire

Illusory Correlation Definition

Illusory Correlation Definition

Illusory correlation occurs when we incorrectly believe that two variables have a relationship with each other. The connection between the two variables is, in effect, an illusion.

3 Tools of Monetary Policy

There are three main tools of monetary policy – open market operations, reserve requirements, and the discount rate. These are decided by central banks such as the Federal Reserve.

Types of Fiscal Policy

3 Types of Fiscal Policy

There are three types of fiscal policy; neutral, expansionary, and contractionary.
A neutral policy refers to a balanced budget. In other words, government brings in enough taxation to pay for its expenditures.
Expansionary fiscal policy is where government spends more than it takes in through taxes.
Contractionary fiscal policy is where government collects more in taxes than it spends.

Exchange Rate Definition

Exchange Rate Definition

An exchange rate is the value by which two currencies are swapped with each other. In other words, it is the rate or value at which one currency can purchase another currency.

Social Capital Definition

Social Capital Definition

Social capital refers to the links and bonds formed through friendships and acquaintances. These links can form through friendship groups, i.e. knowing a friend of a friend.

calculator and pen showing a budget deficit

Budget Deficit Definition

A budget deficit is where we spend more than we receive. If our monthly salary is $1,000, but we spend $1,100; our budget deficit is $100. This is because we are spending $100 more than we receive from our salary. Budgets deficits apply to any person or entity.

comparative advantage example table

Comparative Advantage Definition

What is Comparative Advantage Comparative Advantage Examples Absolute Advantage vs Comparative Advantage How to Calculate Comparative Advantage Comparative Advantage Definition WRITTEN BY PAUL BOYCE | Updated 25 April 2022 What is Comparative Advantage Comparative advantage is where a nation is able to produce a product at a lower opportunity cost. In other words, a nation …

Comparative Advantage Definition Read More »

Central Bank Definition

Central Bank Definition

A central bank controls the supply of money as well as how it reaches the consumer. It can not only print and inject money into the economy, but also regulate commercial banks distribution of it.