What is one benefit of a centrally planned economy? What is one advantage of a centrally-planned economy? Why isn't money an economic resource? Why is macroeconomics important? What was the primary purpose of p
How is consumer price index related to micro economics? In economics, what is the role of a consumer? In economics, of what use is the retail price index? What are the fundamentals of macroeconomics, and how do they affect the average consumer?
When commercial banks face cash-flow problems, they can exchange their short-term bills and foreign exchange notes with the central bank. This means to borrow at a higher discount rate from the central bank, which is actually exercising a contractionary monetary policy to limit the money supply....
Macroeconomics. Changes in U.S. political leadership, Federal Reserve interest rate hikes or cuts, recessions, and even natural phenomena are among many outside events that can change company fortunes and often require an EPS estimate refresh. How vulnerable is a company to events outside its co...
A target rate is a key interest rate that a central bank uses to guide monetary policy toward the desired economic outcomes. A central bank can choose its target based on official discretion or specific policy rules with the intent of influencing economic variables, such as employment or inflatio...
This is why bonds sell at a premium or a discount.The market rate can change because of economy factors, inflation, or even risk. For instance, the market rate for auto loans is different than the market rate for building loans. This is because each of these transactions carries a ...
A risk premium is a return above and beyond the risk-free rate that investors expect when they take on greater risk. The risk premium of any particular investment is simply the difference between its return and the risk-free rate. Analysts can also use risk premium to study historical data ...
which is the interest rate that the Fed will lend to banks through the so-called discount window. The discount rate is always set higher than the federal funds rate target, and so banks would prefer to borrow from one another rather than pay higher interest to the Fed. However, if the ...
The dynamic of the Tunisian exchange rate is governed by the heterogeneity among investors and policy changes. The presence of multiple regimes in the Tunisian exchange rate implies that monetary policy cannot affect the exchange rate dynamic through central bank interventions. Therefore, this study ...
A second – but behavioral – channel through which inflation might affect stock returns is money illusion (Fisher, 1928). Modigliani and Cohn (1979) argue that investors discount real stock cash flows with nominal discount factors, thereby undervaluing equities in times of high inflation and vice...