Money Multiplier
What is the Money Multiplier? In a fractional reserve system like we have here in the United States money is loaned out by banks and by law they are only required to have a fraction of the amount they...
View ArticleWhat is the Fiscal Cliff and How is it Affecting the Economy
What is the Fiscal Cliff? The fiscal cliff that is the current hot topic in the news is a combination of automatic spending cuts and tax hikes that are scheduled to go into effect at the end of 2012...
View ArticleInflation Definitions
Inflation- What is the Real Definition of Inflation? What is Core Inflation? What is Hyperinflation? Inflation vs. Consumer Price Index How Do I Calculate the Inflation Rate? What is Deflation? What is...
View ArticleWhat is the Difference Between Micro and Macro Economics?
Microeconomics vs. Macroeconomics- Economics can be described as the social science that examines how people use limited resources to produce, distribute, and consume goods and services to satisfy...
View ArticleWhat is “Leverage”?
Leverage is… The basic definition of “Leverage” is the mechanical advantage available from using a “lever” this idea has been expanded to apply to other types of advantage such as money, finance and...
View ArticleMarginal Utility
In economics, the marginal utility of a good or service is “the perceived value from an increase in the consumption of that good or service”. In other words, how much benefit do you get from using or...
View ArticleWhat Causes Unemployment?
I recently received the following question about unemployment from a gentleman in Tanzania and I thought it was a good question and I would share the answer with you. What Causes Unemployment? I have...
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Inflation and Velocity of Money
How do you define inflation? In some ways it’s a slippery thing, like trying to nail Jell-O to a tree. One common definition amounts to “a general and sustained rise in the price of goods and...
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Agflation- What is it?
Agflation, is a relatively new term coined by analysts at Merrill Lynch in 2007. Back then rising demand for agricultural products started driving up prices. Agflation is simply a combining of the...
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Velocity of Money
What is the velocity of money? Simply defined the velocity of money is the turnover in the money supply. A shop owner can measure how fast his inventory is selling by calculating “inventory turnover.”...
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Money Multiplier
What is the Money Multiplier? In a fractional reserve system like we have here in the United States, money is loaned out by banks and by law they are only required to have a fraction of the amount they...
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What is the Fiscal Cliff and How is it Affecting the Economy
The fiscal cliff that is the current hot topic in the news is a combination of automatic spending cuts and tax hikes that are scheduled to go into effect at the end of 2012 and the beginning of 2013....
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What Impact (if any) Does Disruption have on Inflation?
What is “Disruption”? According to Dictionary.com: forcible separation or division into parts. a disrupted condition: After the coup, the country was in disruption. Business. a radical change in an...
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How the FED Controls the Money Supply
When the government spends more money than it receives in taxes it has a “deficit” situation. In order to deal with this deficit, it engages in some fancy bookkeeping. The government is made up of a...
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