Protectionism Definition
Protectionism is whereby nations aim to prevent or restrict the supply of goods coming into the country. In other words, it employs various tools to prevent international competition competing with local businesses.
Macroeconomics
Capital Markets Definition
Capital markets are where savers come to invest their capital in long term investments such as corporate debt, equity-backed securities, and government bonds.
Foreign Direct Investment (FDI) Definition
A foreign direct investment (FDI) is where an individual or business from one nation, invests in another. This could be to start a new business or invest in an existing foreign owned business.
Absolute Advantage Definition
Absolute advantage is where a nation is more efficient at making a product than another. In other words, it requires fewer resources to make a final good or service.
What is a Business Cycle
The business cycle is whereby a nations Real GDP goes from growth (expansion) to decline (recession) and back again in a repeating fashion.
Commodity Money Definition
We can define Commodity money as a physical good that consumers universally use to trade for other goods. In other words, it is like the money we use today, but has an actual value.
Globalization Definition
Globalization, also known as globalisation, is the process by which nations becoming increasingly connected between each other. This is defined as the increase in interaction and integration between nations people, companies, and governments.
Aggregate Demand Definition
Aggregate demand refers to all the goods produced and brought within the economy. Economists calculate this using values at a specific point in time. In other words, the monetary value of the exchange is registered over the course of a month, quarter, or year.
Barriers to Entry Definition
A barrier to entry is simply an obstacle that new businesses face when entering the market. This can come in the form of high start-up costs, or strong branded competitors.
Discount Rate Definition
The discount rate is the interest rate by which the central bank charges commercial banks to borrow money or cover short-term liabilities. In other words, the central bank lends money to the likes of Goldman Sachs, and in turn, they pay interest of that loan. The interest paid is known as the discount rate.
