How Does Quantitative Easing Work
Quantitative Easing works in 5 sequential steps: Central Bank Creates Money, Central Bank Purchases Debt, Interest Rates Decline, Businesses/Consumers Borrow More, and Businesses/Consumers Spend More.
Macroeconomics
Pros and Cons of Cryptocurrency
What is Cryptocurrency Cryptocurrency Definition Cryptocurrency Pros and Cons Cryptocurrency Alternatives Pros and Cons of Cryptocurrency WRITTEN BY ABBY COLLINS | Updated 12 January 2022 What is Cryptocurrency Cryptocurrencies have become this decade’s most successful financial disruptor. Despite being a speculative digital currency, Pew Research states that 16% of all Americans have invested and traded crypto. This …
Mercantilism Definition
Mercantilism is an economic policy whereby a nation aims to maximize exports and minimize the imports. It originates from the term ‘mercantile’, which refers to merchants and trade.
Per Capita Definition
Per capita originates from the Latin language – meaning ‘by head’, or ‘per person’. In economics it is used primarily with GDP to find measurements such as GDP per capita, real GDP per capita, GDP (PPP) per capita, and Gross National Income (GNI).
What is a Trade Deficit
A trade deficit occurs when a nation imports more goods than it exports. In other words, a nation buys more from other countries, than it sells to other countries.
3 Types of Money
Money is a medium of exchange. It allows two people to trade without needing what the other wants. This can come in all types and forms. So long as people trust and accept a certain form of money; it can be used as a medium of exchange. For example, gold was historically used as a form of monies. Farmers would go to market and sell their cows in exchange for a certain amount of gold. This gold could then be exchanged by the farmer for a loaf of bread from the baker.
How is Inflation Measured
So now we have looked at what money essentially represents, let us look at how inflation is measured. Inflation is usually measured through the CPI, which is based upon a basket of goods.
Free Market Definition
A free market is where the people in an economy are free to engage in economic activities and transactions without government interference.
Fiscal Policy Definition
Fiscal policy refers to governments spending and taxation. So how much income it has coming in through taxes, and how much it has going out through spending such as welfare, defence, and education.
The Multiplier Effect Definition
The multiplier effect refers to how an initial injection of money into the circular flow of income can stimulate economic activity in excess of the initial investment.
