by TheBusinessProfessor | Feb 23, 2025 | Economic Analysis & Monetary Policy
What is Neoclassical Economics?Neoclassical Economics argues that, as the consumers goal is utility maximization and the organizations goal is profit maximization, the customer is ultimately in control of market forces such as price and demand. The theory relates the...
by TheBusinessProfessor | Feb 23, 2025 | Economic Analysis & Monetary Policy
What is Neoliberalism?Neoliberalism is an ideology and policy model that advocates for the free market economy and argues in favor of transferring the power of controlling the economy from public sector to private sector. What are the Principles of Neoliberalism?The...
by TheBusinessProfessor | Feb 23, 2025 | Economic Analysis & Monetary Policy
What is Capital Formation?Capital formation refers to the accumulation of capital goods, financial capital, and human capital. Economic Views of Capital FormationThere are two divergent view on the role of capital formation: Liberal economists: They think that capital...
by TheBusinessProfessor | Feb 23, 2025 | Economic Analysis & Monetary Policy
What is the Ricardo-Barro Effect?The Ricardo-Barro Effect, also known as Ricardian equivalence, is a microeconomic concept that suggests when there is a reduction in government spending and an increase in taxation; in response, households and businesses increase their...
by TheBusinessProfessor | Feb 23, 2025 | Economic Analysis & Monetary Policy
What is the Ratchet Effect?The Ratchet Effect refers to the escalation of production, price, or wage that tends to self-perpetuate and resist fall back. People are influenced by the previous best or highest level, which makes it difficult to reverse the change. For...
by TheBusinessProfessor | Feb 23, 2025 | Economic Analysis & Monetary Policy
What is the Real Effective Exchange Rate? The Real Effective Exchange Rate (REER) is the weighted average of a country’s currency against a basket of other major currencies (after adjusting for inflation differentials). The REER is expressed as an index number...
