Compound Inflation Rider a long-term care (LTC) insurance policy rider that increases benefits by a rate compounded annually. What exactly is compound inflation? On each insurance anniversary, for example, a daily benefit of $200.00 will increase by $6/day at 3% simple interest. A $200/day benefit for a 55-year-old applicant will be worth $350/day at the […]
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Austrian economists claim that the Great Depression was a foregone conclusion as a result of the Federal Reserve’s monetary policies in the 1920s. The central bank’s strategy of “loose credit” resulted in an unsustainable credit-fueled boom. During this time, money supply inflation caused an unsustainable boom in asset values (stocks and bonds) as well as
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What does the term “investment” or “investment expenditure” signify to economists? The purchase of stocks and bonds, as well as the trading of financial assets, are not included in the calculation of GDP. It refers to the purchase of new capital goods, such as business equipment, new commercial real estate (such as buildings, factories, and
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After grabbing headlines in the United States, the issue has now become a focal point of policy debates in a number of other advanced nations. Twelve-month inflation was above 5% in 15 of the 34 countries designated as AEs by the International Monetary Fund’s World Economic Outlook through December 2021. It has been more than
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Consumer prices rose 5.3 percent in August compared to the previous year, causing some anxiety as the economy recovers from the pandemic. Food prices at home increased by 3%, while food prices away from home (i.e. restaurants) increased by 4.7 percent, according to the Bureau of Labor Statistics’ latest release this week. Rents and energy
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Interest rates and inflation are often inversely associated, with an increase in one usually resulting in a drop in the other. This enables central banks to control inflation by changing short-term interest rates. The idea that lowering interest rates helps consumers to borrow more money underpins this basic principle. As a result, they have more
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The population is divided by the nominal GDP. This is the economy’s “average” per-person output based on current-year prices. Is the GDP per capita real or nominal? 1 The Bureau of Economic Analysis publishes it quarterly, with monthly updates. “Per capita,” which means “per person,” is the third option. Real GDP per capita is calculated
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However, with the Federal Reserve prepared to begin hiking interest rates in an effort to combat growing inflation, the rate at which the Treasury must pay on freshly issued debt will almost certainly climb, raising the overall cost of servicing the federal debt in the near future. The United States is among the most indebted
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Dow futures are financial futures that allow investors to hedge or speculate on the future value of various Dow Jones Industrial Average market index components. E-mini Dow Futures are futures instruments generated from the Dow Jones Industrial Average. What are the implications of stock futures? Stock index futures, such as the S&P 500 E-mini Futures
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A perpetual futures contract, also known as a perpetual swap in finance, is an agreement to buy or sell an asset at an undefined date in the future without the choice to do so. Perpetual futures are cash-settled and differ from conventional futures in that they do not have a pre-determined delivery date, allowing them
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