Why are the factors of production important to economic growth?

June 30, 2024 No Comments

A: Real economic growth only comes from increasing quality and quantity of the factors of production, which consist of four broad types: land, labor, capital and entrepreneurship. Saving and discovery are the two basic ways to improve or increase the factors of production. Saving occurs

Why are the factors of production important to economic growth?

July 7, 2024 No Comments

Why are there no profits in a perfectly competitive market?

June 30, 2024 No Comments

A: The “perfectly competitive market” is an abstract theoretical construction used by economists. It serves as a benchmark to compare existing competition in real markets. Under perfect competition, firms can only experience profits or losses in the short run. In the long run, profits and

Why are there no profits in a perfectly competitive market?

July 7, 2024 No Comments

Why did the New York Stock Exchange report prices in fractions before it switched to decimal reporting?

June 30, 2024 No Comments

A: Before April 9, 2001, when the Securities and Exchange Commission ordered all U.S. stock markets to switch to the decimal system, prices were reported and stocks were denominated in fractions—in one-sixteenths to be exact. While it seems silly that it took so long for the

Why did the New York Stock Exchange report prices in fractions before it switched to decimal reporting?

July 7, 2024 No Comments

Why do banks securitize some debts, and how do they sell them to investors?

June 30, 2024 No Comments

A: Banks may securitize debt for reasons that include risk management, balance sheet issues, greater leverage of capital and to profiting from origination fees. Debt is securitized by the pooling of certain types of debt instruments and then creating a new financial instrument from the

Why do banks securitize some debts, and how do they sell them to investors?

July 7, 2024 No Comments

Why do banks write off bad debt?

June 30, 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 banks write off bad debt?

July 7, 2024 No Comments

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