Did the repeal of the Glass-Steagall Act contribute to the 2008 financial crisis?

June 30, 2024 No Comments

A: The repeal of the Glass-Steagall Act was at most a minor contributor to the financial crisis. At the heart of the 2008 crisis was nearly $5 trillion worth of basically worthless mortgage loans, among other factors. Although the repeal allowed for much bigger banks,

Do budget deficits “crowd out” the market?

June 30, 2024 No Comments

A: Government deficits crowd out private investment, although the mechanism through which that occurs can be more or less direct. The crowding out is in a relative, not absolute sense. Like any other economic good, investment capital is scarce. Any government bonds issued to pay

Do CIF charges affect the customs duties?

June 30, 2024 No Comments

A: The abbreviation CIF stands for “cost, freight and insurance.” It is a term used in international trade in reference to transporting goods from one destination to another through maritime shipping. The term has changed to include inland and airline shipments. When a buyer purchases

Do interest rates increase during a recession?

June 30, 2024 No Comments

A: Interest rates rarely increase during a recession. Actually, the opposite tends to happen; as the economy contracts, interest rates fall in tandem. The Federal Reserve has tools to control interest rates. During a recession, the Fed usually tries to coax rates downward to stimulate

Does a stock split lead to the gapping up/down of the stock?

June 30, 2024 No Comments

A: If a company splits its stock, there will be no gapping of the stock due to the split itself. A stock split does not materially affect a company’s value and will not lead to the wide changes in value that are seen in gaps.

Does perfect competition exist in the real world?

June 30, 2024 No Comments

A: First, let’s review what economic factors must be present in an industry with perfect competition. 5 Requirements of Perfect Competition All firms sell an identical product. All firms are price-takers. All firms have a relatively small market share. Buyers know the nature of the

Does QVC accept debit cards?

June 30, 2024 No Comments

A: QVC accepts debit card payments as one of its many payment options. The company, which is the world’s leading video and e-commerce retailer, had sales of $8.8 billion in 2014. Purchases of items from QVC can be made by both Visa and MasterCard debit

Are economic recessions inevitable?

June 30, 2024 No Comments

A: The popular sentiment of financial analysts and many economists is that recessions are the inevitable result of the business cycle in a capitalist economy. The empirical evidence, at least on the surface, appears to strongly back up this theory. Recessions are highly frequent in

Does raising the minimum wage increase inflation?

June 30, 2024 No Comments

A: There are conflicting views on whether raising the minimum wage increases inflation. Tied to this is the question of what effect a higher minimum wage has on employment because historically, high unemployment goes hand-in-hand with high inflation. While raising the minimum wage would help

Are monopolies always bad?

June 30, 2024 No Comments

A: Monopolies over a particular commodity, market or aspect of production are considered good or economically advisable in cases where free market competition would be economically inefficient, the price to consumers should be regulated, or high risk and high entry costs inhibit initial investment in

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