Economics Content List
Consumer Price Index or CPI is a measure of average change of prices of the various essential consumer goods and services purchased by households over a period of time. It is calculated by periodically collecting the prices of sample items from sample locations. It plays an important role in all the financial decisions of banks […]Continue Reading... Comments Off on Consumer Price Index – CPI
Foreign Exchange rate is the price/value of a foreign currency expressed in another base currency. Exchange rates may either be fixed or flexible depending on the strategy taken by the respective governments. An exchange rate is flexible or free to move when two countries agree to let the external and other market forces establish the rate […]Continue Reading... Comments Off on Currency Pegging
The Repo rate and Bank rate are almost similar except the difference that Repo rate is applicable to short-term lending specially for overnight lending to banks by the central bank and governed by the short term interest rate and inflation target but Bank rate is applicable to long term lending by the central bank and […]Continue Reading... No Comments.
Cash Reserve Requirement (CRR) Cash Reserve Requirement or Cash Reserve Ration (CRR) mandates the banks to hold a certain percentage of the deposit in the form of cash or cash equivalents. Banks can lend the rest of the money to the lenders after maintaining the reserve ratio or requirement. Banks do not normally keep the […]Continue Reading... No Comments.
Bank Rate Bank rate is the rate at which the central bank provides money to the other financial institutions or banks. Bank rate enables the financial institutions (or banks) to borrow money from the central bank to fund any money need. Increase in bank rate leads to higher prime lending rate, the rate at which […]Continue Reading... No Comments.
Monetary Policy is another important part of economics which is used by the Government or the central bank to maintain the liquidity in the market and keep long term interest rate stable. It also provides the favorable monetary platform for economic growth and stability with the aim of stable prices and low unemployment. The central […]Continue Reading... No Comments.
The balance of trade is an important term of macroeconomics. Balance of trade is defined by the difference between the total value of export and import of an economy over a period of time. If export is more than import, then the difference between export and import is called as “Trade Surplus”. On the contrary, […]Continue Reading... No Comments.
So how come government fund the Fiscal Deficit? Government can fund its Fiscal Deficit by the following ways: Extra taxation or impose of new excise duty. Print new currency as per the balance of payment surplus. Borrowing money from the domestic and global investors across the world by issuing government bonds and treasury bills. By […]Continue Reading... No Comments.
Fiscal Policy refers to the Government spending and income to run a country and support the growth. It mainly deals with the Budget allocation, Government spending, Government income, taxation, fiscal deficit, Government borrowings, current account deficit and surplus and trade deficit and surplus. All these terms will be explained in much detail. Let us first […]Continue Reading... No Comments.
The economic cycle is characterized by the fluctuations in economic activities and overall GDP growth. The GDP growth fluctuates with time and it does not growth at the uniform speed over a long period of time. The economic cycle phase is mainly determined by GDP, unemployment rate and industrial activity. The main two phases of […]Continue Reading... No Comments.