This article discusses the different price indexes used to measure inflation and changes in the cost of living. Price indexes are important economic tools used to track the price changes of goods and services. Governments, businesses, and investors use them to make informed decisions about policy, pricing, and investment. consumer price index (CPI): The first…
Inflation refers to the general increase in the price level of goods and services in an economy. They calculate the percentage change in the Consumer Price Index (CPI) which tracks the prices of a basket of goods and services commonly consumed by households to measure it. Inflation can be both good and bad, depending on…
Fractional banking is a banking system in which banks are only required to hold a fraction of the total amount of deposits made by customers. The remaining amount can provide loans and earn interest. This system allows banks to make more loans than they could with the actual amount of deposits they have received. Understanding…
What Is Stagflation, and Why Is It Bad? Stagflation is an economic phenomenon that occurs when an economy experiences stagnant growth, high unemployment, and rising prices simultaneously. This phenomenon is a challenging economic condition can have severe consequences on an economy. In this article, we will discuss what stagflation is, its causes, its effects, and…
Introduction: Basic Economics is a book written by renowned economist Thomas Sowell, first published in 2000. The book summarizes the basic principles of economics and how they apply to various real-world scenarios. This article will summarize the key concepts and ideas presented in the book, highlighting the most important points in each chapter. Chapter 1:…