Inflation has a negative impact on the time value of money since it reduces the worth of a dollar over time. The temporal value of money is a notion that outlines how money you have today is worth more than money you will have in the future. What effect does inflation have on the value […]
Does Inflation Increase Or Decrease The Value Of Money? Read More »
With the enactment of the New Deal’s National Industrial Recovery Act in 1933, the first federal minimum wage was established. The ultra-right Supreme Court of the time quickly declared it unconstitutional. In 1936, President Franklin D. Roosevelt ran for reelection on the promise of continuing to fight for a federal minimum wage. In contrast, the
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The arrest of former South African President Jacob Zuma on July 7, 2021, sparked a new round of violent riots and looting across the country. At least 200 individuals have died as a result of the incident, more than 2,554 people have been arrested, and 50,000 businesses have been damaged or harmed. While the Zuma
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Although both GDP and GNP conceptually represent the entire market value of all products and services produced during a given period, they differ in how they define the economy’s scope. GDP is a metric that represents the value of products and services generated inside the country’s geographical limits by both Americans and people from other
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Gold has long been thought to be a good inflation hedge. In reality, many people have looked to gold as a “alternative currency,” especially in countries where the national currency is depreciating. When their own currency fails, these countries often resort to gold or other strong currencies. Gold is a genuine, tangible asset that, for
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A recession is a period of economic contraction during which businesses experience lower demand and lose money. Companies begin laying off people in order to decrease costs and halt losses, resulting in rising unemployment rates. Re-employing individuals in new positions is a time-consuming and flexible process that faces certain specific problems due to the nature
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A approaching recession shouldn’t scare you if you’re investing for the long haul. To take some profits off the table, you might wish to sell some stocks. However, selling when prices are low should not be your primary strategy. You might assume you’ll get back in when prices stop falling, but a bottom can’t be
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They lose because they are net monetary creditors. However, they benefit as demand deposit issuers. The second effect may easily outweigh the first with more indexing and more accurate forecasting of future inflation. Bankers have recently learned to recognize and manage interest rate risk. Bankers learned of the need to hedge their balance sheets against
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With nominal and projected inflation, how do you calculate the real interest rate? We subtract the inflation rate from the nominal interest rate to get the real interest rate. For example, if a loan has a 12 percent interest rate and the rate of inflation is 8%, the actual return on that loan is 4%.
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Inflation, or the gradual increase in the price of goods and services over time, has a variety of positive and negative consequences. Inflation reduces purchasing power, or the amount of something that can be bought with money. Because inflation reduces the purchasing power of currency, customers are encouraged to spend and store up on products
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