How Do Fiscal and Monetary Policies Affect Aggregate Demand?

July 7, 2024 No Comments

A: Aggregate demand is a macro-economic concept representing the total demand for goods and services in an economy. This value is often used as a measure of economic well-being or growth. Fiscal policy affects aggregate demand through changes in government spending and taxation. Government spending

How Can You Calculate Correlation Using Excel?

July 7, 2024 No Comments

A: Correlation measures the linear relationship of two variables. By measuring and relating the variance of each variable, correlation gives an indication of the strength of the relationship. Or to put it another way, correlation answers the question: How much does variable A (the independent variable) explain

How did the Great Recession affect structural unemployment?

July 7, 2024 No Comments

A: The collapse of the housing bubble in 2007 and 2008 caused a deep recession, which sent the unemployment rate to 10.0% in October 2009 – more than double is pre-crisis rate. As of September 2017, the unemployment rate has fallen to below its pre-crisis

Why does inflation increase with GDP growth?

July 7, 2024 No Comments

A: Reported gross domestic product is adjusted for inflation. The growth of unadjusted GDP means an economy has experienced one of five scenarios: Produced more at the same prices Produced the same amount at higher prices Produced more at higher prices Produced much more at

Why is there a negative correlation between quantity demanded and price?

July 7, 2024 No Comments

A: The law of demand is an economic principle that explains the negative correlation between the price of a good or service and its demand. If all other factors remain the same, when the price of a good or service increases, the quantity of demand

Why do banks write off bad debt?

July 7, 2024 No Comments

A: Banks prefer to never have to write off bad debt since their loan portfolios are their primary assets and source of future revenue. However, toxic loans—loans that cannot be collected or are unreasonably difficult to collect—reflect very poorly on a bank’s financial statements and

Why do commercial banks borrow from the Federal Reserve?

July 7, 2024 No Comments

A: Commercial banks borrow from the Federal Reserve primarily to meet reserve requirements when their cash on hand is low before the close of business. To put itself back over the minimum reserve threshold, a bank borrows money from the government’s central bank utilizing what

Who decides to print money in Canada?

July 7, 2024 No Comments

A: In Canada, new money comes from two places: the Bank of Canada (BOC) and chartered banks such as the Toronto Dominion Bank (TD) and the Royal Bank of Canada (RBC). The Canadian banking system is one of the most respected and stable banking systems

Why do some people claim the Federal Reserve is unconstitutional?

July 7, 2024 No Comments

A: The U.S. Constitution does not mention the need for a central bank, nor does it explicitly grant the government the power to create one. Those who adhere to a strict interpretation of the Constitution believe the government does not have any authority not specifically

Who decides when to print money in India?

July 7, 2024 No Comments

A: The Reserve Bank of India (RBI), manages currency in India. The bank’s additional responsibilities include regulating the country’s credit systems and using monetary policy to establish financial stability in India. The institution is headquartered in Mumbai, India. Before 1934, the government of India had the

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