Ford Motor Company’s struggle to stay afloat during the Great Recession has been well documented: a lucky $23 billion loan saved the company from bankruptcy, allowing it to focus on strengthening its core brand and investing in small cars, fuel-efficient engines, and lightweight, aluminum-bodied trucks. How did Ford weather the storm of the Great Recession? […]
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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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With the exclusion of debt and transfer payments like Social Security, government purchases encompass any spending by federal, state, and municipal agencies. Government purchases account for a significant portion of a country’s gross domestic product (GDP). Government purchases, according to Keynesian economic theory, are a mechanism for boosting total expenditure and correcting a weak economy.
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When inflation is high, value stocks perform better, and when inflation is low, growth stocks perform better. Is the stock market safe in an inflationary environment? Stocks. “Stocks can be a wonderful long-term inflation hedge,” Arnott says, “but they can suffer in the near term if inflation jumps.” If you’re new to investing, it’s easier
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In 2019, Somalia’s gross domestic product (GDP) was estimated to be approximately $5.06 billion USD. What is the average income in Somalia? In 2020, Somalia’s GDP per capita was $309, down 3.32 percent from 2019. The GDP per capita in Somalia in 2019 was $320, up 1.75 percent from 2018. In 2018, Somalia’s GDP per
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Interest rate levels will be affected by inflation. The higher the rate of inflation, the more likely interest rates will rise. This happens because lenders will demand higher interest rates in order to compensate for the eventual loss of buying power of the money they are paid. Why does increasing interest rates cause inflation to
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But, according to Tara Sinclair, an economics professor at George Washington University and a senior fellow at Indeed’s Hiring Lab, one of the finest investments you can make to recession-proof your life is obtaining an education. Those with a bachelor’s degree or higher have a substantially lower unemployment rate than those with a high school
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The Universal Basic Income (UBI) is a proposed system that would give individuals with a minimal income to help prevent poverty and close economic gaps. Some proposals propose that a UBI be paid to anybody earning up to a certain amount of money (e.g., $50,000 per year), whether or not they are employed. Other suggestions
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When calculating the gross domestic product, economists ignore intermediate products (GDP). The market worth of all final goods and services generated in the economy is measured by GDP. These items are not included in the computation because they would be tallied twice. What are the intermediary goods that aren’t counted in the GDP? What are
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Firms’ profit margins shrink during a recession on a microeconomic level. When revenue declines, whether through sales or investment, businesses try to eliminate inefficient processes. A company might, for example, stop making low-margin products or lower staff salaries. It may also renegotiate with creditors to secure interest relief on a temporary basis. Unfortunately, organizations may
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