AD stands for aggregate demand (consumer spending, investment levels, government spending, exports-imports) AS stands for aggregate supply (Productive capacity, the efficiency of economy, labour productivity) To increase economic growth 1. An increase in total demand Lower interest rates lower borrowing costs and boost consumer spending and investment. Increased real wages when nominal salaries rise faster […]
During a recession, stock prices frequently fall. In theory, this is bad news for a current portfolio, but leaving investments alone means not selling to lock in recession-related losses. Furthermore, decreased stock prices provide a great opportunity to invest for a reasonable price (relatively speaking). As a result, investing during a downturn can be a
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The US Inflation Rate is the percentage increase in the price of a selected basket of goods and services purchased in the US over a year. The US Federal Reserve uses inflation as one of the indicators to assess the economy’s health. The Federal Reserve has set a target of 2% inflation for the US
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Healthcare, food, consumer staples, and basic transportation are examples of generally inelastic industries that can thrive during economic downturns. During a public health emergency, they may also benefit from being classified as critical industries. What should you put your money into during a downturn? During a recession, you might be tempted to sell all of
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Natural gas futures dropped Thursday as the latest government inventory report surprised to the downside after climbing more than 77.0 cents in the previous three days. Prices were further pushed by some softening in the early March projection, with the March Nymex contract finishing 23.1 cents lower day over day at $4.486. The price of
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The inflation target is determined by the National Treasury, in cooperation with the SARB, and serves as a baseline against which price stability is monitored. The SARB then sets its own monetary policy in order to meet this goal. How is inflation kept under control? Governments can fight inflation by imposing wage and price limits,
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Personal consumption, business investment, government spending, and net exports are the four components of GDP domestic product. What are GDP’s five components? (Private) consumption, fixed investment, change in inventories, government purchases (i.e. government consumption), and net exports are the five primary components of GDP. The average growth rate of the US economy has traditionally been
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Governments can fight inflation by imposing wage and price limits, but this can lead to a recession and job losses. Governments can also use a contractionary monetary policy to combat inflation by limiting the money supply in an economy by raising interest rates and lowering bond prices. Another measure used by governments to limit inflation
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The total number of futures contracts held by market participants at the end of the trading day is known as open interest. It’s a tool for determining market mood and the strength of price movements. What role does open interest play in futures? Traders in the futures and options markets frequently use open interest as
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Each contract for crude oil ends on the third business day before the 25th calendar day of the month preceding the delivery month. Trading ceases on the third business day previous to the business day before the 25th calendar day if the 25th calendar day is a non-business day. When do oil futures contracts expire?
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