What's is: Trade restriction refers to the various barriers that make the flow of goods and services between countries immobile. If the barriers come from government policies, we call it trade protection.Trade restrictions affect the demand
Economic Context
Financial Economics: Meaning, Concepts and Topics
What's it: Financial economics is one of the branches of economics that focuses on money. It is the intersection between financial studies, financial markets, and economics. In other words, this study pays greater attention to the monetary side of an
Cartel: Goals, Examples, Characteristics, Effects, and Reasons for Failure
What's it: A cartel is a formal agreement between several parties to increase economic benefits. It can appear on both the market demand and supply sides, although the latter is more common.Cartel objectivesA cartel is a form of
Potential GDP: Definition, Calculation, Determinants, Importance
What's it: Potential GDP refers to the maximum output an economy can produce using its existing economic resources. It represents an economy's long-run aggregate supply. At this level of output, the economy will fully utilize all its resources and
Market Economy: Meaning, Characteristics, Pros, and Cons
What's it: A market economy is an economic system in which market mechanisms determine economic activity. In other words, the economy is based on the power of supply and demand, where individuals and businesses take the central role in making
Cournot Model: Concept, Assumption, Solution, and Criticism
What's it: A Cournot model is one of the economic models to explain the oligopoly market. This model assumes that the firm independently decides the profit-maximizing level of production. I mean, they don't depend on how many competitors are
Foreign Direct Investment (FDI): Benefits, Drawbacks & How Countries Attract FDI
What's it:Â Foreign direct investment (FDI) is a type of capital flow where investors from outside a country invest in its productive assets. Investors can come from companies or individuals. Companies they become multinational companies because they
Economies of Scope: Meaning, Formula, and How to Calculate
What's it: Economies of scope is a reduction in the unit cost of production when companies produce two or more products using the same production facilities or resources.The example is more or less like this. Automakers use one production
International Trade: Your Guide to the Global Economy
International trade fuels the global economy, driving the exchange of goods and services across borders. It plays a critical role in our daily lives, from the smartphone in your pocket to the clothes on your back. But how exactly does international
Exchange Rate Systems: Fixed vs. Floating & Popular Variations
The exchange rate system plays a critical role in the global financial landscape, dictating how currencies are valued against each other. In essence, it's the framework a country adopts to manage its currency's exchange rate. This guide will explore
Trade Barriers Explained: Types, Why They Exist – Impacts on Economy, Consumers, Business
A trade barrier is any obstacle that limits the movement of trade flows between countries. Generally, this measure protects the domestic economy.There are various kinds of trade barriers, including tariffs, quotas, embargoes, sanctions, and
Perfect Competition: Characteristics, and Implications
What's it: Perfect competition is a theoretical market structure concept with many companies producing identical goods or services. In other words, each company offers goods that substitute each other entirely.The perfect competition enables