The GDP deflator, also known as the implicit price deflator, tracks changes in the prices of goods and services produced in the United States, including those exported to other countries. Import prices are not included. What is the formula for calculating the implicit GDP price deflator? In 2007, the United States’ nominal GDP was $13,807.5 […]
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While interest rates tend to fall early in a recession, credit standards are generally stringent, making it difficult for some borrowers to qualify for the best interest rates and loans. Consider the worst-case scenario: you lose your job, and interest rates begin to rise as the recession fades. Should you pay down debt during a
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Education spending in the United States falls short of worldwide benchmarks set by organizations like UNESCO, of which the United States is a member. Education receives only 11.6 percent of government financing, significantly below the international level of 15.00 percent. However, the United States spends more than any other country on postsecondary education, at $33,180
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The Great Recession was a period of economic slump that lasted from 2007 to 2009, following the bursting of the housing bubble in the United States and the worldwide financial crisis. The Great Recession was the worst economic downturn in the United States since the 1930s’ Great Depression. Federal authorities unleashed unprecedented fiscal, monetary, and
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The United States’ annual inflation rate has risen from 3.2 percent in 2011 to 4.7 percent in 2021. This suggests that the dollar’s purchasing power has deteriorated in recent years. Is inflation at 2% per year? Important Points to Remember The Federal Reserve use monetary policy to attain its 2% inflation target. In the aftermath
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Equilibrium is found in the aggregate expenditures model at the level of real GDP where the aggregate expenditures curve crosses the 45-degree line. As a result, a movement in the curve affects equilibrium real GDP. We’ll look at the magnitude of such shifts in this section. The aggregate expenditures curve depicted in Figure 13.8 “Determining
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Most investors should avoid investing in highly leveraged, cyclical, or speculative companies during a recession, as these companies have the highest likelihood of doing poorly during difficult economic circumstances. Investing in well-managed companies with little debt, high cash flow, and robust balance sheets is a superior recession strategy. In a downturn, counter-cyclical equities do well
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When demand for goods and services exceeds output owing to factors such as greater total employment, increased trade activities, or more government spending, an inflationary gap occurs. When real GDP surpasses potential GDP, what happens? If real GDP exceeds potential GDP (i.e., the output gap is positive), the economy is producing more than it can
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Trinidad and Tobago’s economy is the third richest in the Caribbean and the fifth richest in the Americas in terms of GDP (PPP) per capita. The World Bank classifies Trinidad and Tobago as a high-income country. The country’s economy, unlike most of the English-speaking Caribbean, is predominantly industrial, with a focus on petroleum and petrochemicals.
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When markets decline, many investors want to get out as soon as possible to avoid the anguish of losing money. The market is really improving future rewards for investors who buy in by discounting stocks at these times. Great companies are well positioned to grow in the next 10 to 20 years, so a drop
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