What is the difference between horizontal integration and vertical integration?

July 7, 2024 No Comments

A: When a company wishes to grow through a horizontal integration, it is looking to acquire a similar company in the same industry. It may be seeking to increase its size, diversify its product offerings or services, achieve economies of scale, reduce competition, or gain access to

What is the difference between induced consumption and autonomous consumption?

July 7, 2024 No Comments

A: The first step to determining the difference between autonomous and induced consumption is to look at what each of these terms mean. The key difference between autonomous consumption and induced consumption lies in the factor of income. Autonomous Consumption Autonomous consumption is defined as

What is the difference between inelasticity and elasticity of demand?

July 7, 2024 No Comments

A: Inelasticity and elasticity of demand refer to the degree to which supply and demand respond to a change in another factor, such as price, income level or substitute availability. If the change in demand for a given product corresponds closely to a change in one

What is the difference between a value chain and a supply chain?

July 7, 2024 No Comments

A: The difference between a value chain and a supply chain is that a supply chain is the process of all parties involved in fulfilling a customer request, while a value chain is a set of interrelated activities a company uses to create a competitive

What is human capital and how is it used?

July 7, 2024 No Comments

A: Human capital is a loose term that refers to knowledge, experience and skills of an employee. The theory of human capital is relatively new in finance and economics. It states that companies have an incentive to seek productive human capital and to add to

What is market capitulation?

July 7, 2024 No Comments

A: By definition, capitulation means to surrender or give up. In financial circles, this term is used to indicate the point in time when investors have decided to give up on trying to recapture lost gains as a result of falling stock prices. Suppose a

What is QE3 (quantitative easing)?

July 7, 2024 No Comments

A: “Quantitative easing” refers to steps that the U.S. Federal Reserve takes in attempting to boost the country’s lagging economy. Historically, the Fed’s main tool for spurring growth has been lowering short-term rates. However, QE employs expansionary monetary policy, which involves the purchasing of bonds

What is the “percentage off the 52-week high or low”? How is this calculated?

July 7, 2024 No Comments

A: The “percentage off the 52-week high or low” refers to when a security’s current price is relative to where it has traded over the last 52 weeks. This gives investors an idea of how much the security has moved in the last year and

What is the average length of the boom and bust cycle in the U.S. economy?

July 7, 2024 No Comments

A: The boom and bust, better defined as expansion and contraction, business cycles of the U.S. economy averaged 38.7 months in expansion and 17.5 months in contraction between 1854 and 2009. According to the National Bureau of Economic Research, there were 33 business cycles between

What is the best way to measure the total market?

July 7, 2024 No Comments

A: There is a variety of market indices which function as statistical gauges of the market’s activities. Many investors look at the Dow Jones Industrial Average or the Nasdaq Composite Index as benchmarks or representatives of the stock market as a whole. However, these indices

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