In the 1970s, there were two economic recessions, one dominating the years 19741975 and the other dominating the years 19791982. They are linked by the fact that they were all triggered by rises in oil export prices enforced by the Organization of Petroleum Exporting Countries (OPEC) (OPEC). OPEC quadrupled the price of oil exports in […]
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In the United States, C + I + G + (Ex – Im) equals nearly $10 trillion. That means the US produces more than $10 trillion in products and services each year within its boundaries. Consumer spending, often known as consuming or consumption expenditure by economists, accounts for the vast majority of GDP in the
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Inflation isn’t going away anytime soon. In fact, prices are rising faster than they have been since the early 1980s. According to the most current Consumer Price Index (CPI) report, prices increased 7.9% in February compared to the previous year. Since January 1982, this is the largest annualized increase in CPI inflation. Even when volatile
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The Federal Reserve has not set a formal inflation target, but policymakers usually consider that a rate of roughly 2% or somewhat less is acceptable. Participants in the Federal Open Market Committee (FOMC), which includes members of the Board of Governors and presidents of Federal Reserve Banks, make projections for how prices of goods and
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A recession is a macroeconomic phrase that denotes a considerable drop in overall economic activity in a specific area. It was previously defined as two consecutive quarters of economic contraction, as measured by GDP and monthly indicators such as an increase in unemployment. The National Bureau of Economic Research (NBER), which officially declares recessions, claims
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Bonds may perform well in a downturn because they are in higher demand than stocks. The danger of owning a firm through stocks is higher than the risk of lending money through a bond. More investors will choose the fixed-income guarantees of bonds over the capital gain prospects of equities when times are uncertain. In
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Are you putting money down for retirement? For the education of your children? Any other long-term objective? If that’s the case, you’ll want to understand how inflation can affect your money. Inflation is defined as an increase in the cost of goods over time. Inflation rates have risen and fallen over time. At times, inflation
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The rate of change in the prices of anything from a bar of Ivory soap to the cost of an eye exam is characterized as inflation. In the United States, the consumer price index (CPI) is the most often used measure of inflation. Simply explained, the index measures the average cost of a basket of
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Currency futures are futures that are exchanged on an exchange. Traders often have accounts with brokers who place orders to purchase and sell currency futures contracts on multiple markets. In order to place a trade in currency futures, a margin account is typically used; otherwise, a large sum of money would be necessary. Traders use
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At the end of 2019, the yield curve was nearly inverted, indicating that a recession would start in 2020. However, the COVID-19 lockdowns resulted in an economic slowdown in early 2020, rather than an usual cyclical recession. Is there going to be a recession in 2021? Unfortunately, a worldwide economic recession in 2021 appears to
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