What are some examples of expansionary monetary policy?

July 8, 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 free market economies?

July 8, 2024 No Comments

A: In a free market economy, the law of supply and demand, rather than a central government, regulates production and labor. Companies sell goods and services at the highest price consumers are willing to pay, while workers earn the highest wages companies are willing to pay

What are some examples of industries that practice price discrimination?

July 8, 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?

July 8, 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?

July 8, 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?

July 8, 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,

What are some examples of the law of demand in real markets?

July 8, 2024 No Comments

A: The law of demand posits a negative relationship between the price of a good and quantity demanded if all other factors are held constant. This cornerstone of microeconomics explains that consumers of a good or service will consume more if the price is lower.

What are some historic examples of hyperinflation?

July 8, 2024 No Comments

A: Hyperinflation is an extreme case of monetary devaluation that is so rapid and out of control that the normal concepts of value and prices are meaningless. Hyperinflation is often described as inflation exceeding 50% per month, though no strict numerical definition exists. This catastrophic

What are some limitations of the consumer price index (CPI)?

July 8, 2024 No Comments

A: The consumer price index, or CPI, is considered one of the most fundamental and critically important economic indicators, not only in the United States but in virtually every other developed nation as well. The release of monthly CPI numbers almost invariably has a significant

What are some of the drawbacks of industrialization?

July 8, 2024 No Comments

A: In economic history, industrialization is the social and economic transformation of the human group from an agrarian society to an industrial society. Environmental drawbacks include high pollution of air, water and soil that can result in significant deterioration of quality of life and life

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