What are some examples of expansionary monetary policy?

June 30, 2024 No Comments

A: Examples of expansionary monetary policy are decreases in the discount rate, purchases of government securities and reductions in the reserve ratio. All of these options have the same purpose—to expand the country’s money supply. This is a tool employed by central banks to stimulate

What are some examples of industries that practice price discrimination?

June 30, 2024 No Comments

A: Many industries practice price discrimination, including the entertainment industry, the consumable goods industry and the client services industry. Each one of these industries provides a good example of the three types of price discrimination, which is the act of charging different prices for the

What are some examples of inelastic goods and services that are not affected by the law of supply and demand?

June 30, 2024 No Comments

A: The laws of supply and demand affect all goods in the market. The degree to which prices respond to changes in supply and demand is known as price elasticity. Goods that are highly inelastic react less dramatically, but that does not mean the laws

What are some examples of moral hazard in the business world?

June 30, 2024 No Comments

A: Moral hazard is a situation in which one party to an agreement engages in risky behavior or fails to act in good faith because it knows the other party bears any consequences of that behavior. For example, a driver with an auto insurance policy

What are some examples of positive correlation in economics?

June 30, 2024 No Comments

A: Positive correlation exists when two variables move in the same direction. A basic example of positive correlation is height and weight—taller people tend to be heavier, and vice versa. In some cases, positive correlation exists because one variable influences the other. In other cases,

Is the retail sector also affected by seasonal factors?

June 30, 2024 No Comments

A: Generally speaking, the retail sector is highly seasonal. Almost invariably, sales in the retail sector are highest in the fourth quarter, or October through December, and peak at Christmas. According to the Census Bureau’s Monthly Retail Trade Report, the most seasonal retail markets are

What are key economic factors that can cause currency depreciation in a country?

June 30, 2024 No Comments

A: Currency devaluation can occur in absolute and relative senses. A relative devaluation occurs when the foreign exchange value of one currency drops against the exchange value of other currencies. For example, the British pound sterling may trade for more U.S. dollars today than it

Is the substitution effect negative for consumers?

June 30, 2024 No Comments

A: The substitution effect is both positive and negative for consumers. It is positive for consumers because it means that they can afford to keep consuming products in a category even if their incomes decline or some products rise in price. It is also negative

Is the United States a Market Economy or a Mixed Economy?

June 30, 2024 No Comments

A: The United States has a mixed economy. It works according to an economic system that features characteristics of both capitalism and socialism. A mixed economic system protects private property and allows a level of economic freedom in the use of capital, but also allows for governments to intervene

Is there a correlation between inflation and house prices?

June 30, 2024 No Comments

A: There is a correlation between inflation and house prices. In fact, there are correlations between inflation and any good with a limited supply. To illustrate, consider an economy that has a money supply of only $10 and five identical houses in the whole economy. Each

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