Net Present Value Definition
Net Present Value (NPV) is the total value of future revenues, subtracted against any cash outflows during the same period.
Net Present Value (NPV) is the total value of future revenues, subtracted against any cash outflows during the same period.
Present value (PV) is the current value of a future sum of money, or stream of revenue. Tihs is calculated by using the discount rate.
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.
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.
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.
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 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.
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.
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 …
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.