Galloping inflation isn't just an economics term from textbooks – it's a harsh reality that can wreak havoc on economies and everyday lives. Imagine prices skyrocketing by 20%, 50%, or even higher in a single year. That's the hallmark of galloping
Economic Context
Demand Curve: Types, How to Draw It From a Demand Function
What's it: A demand curve is a two-dimensional graphical representation to illustrate the relationship between quantity demanded and price. It uses price as the Y-axis and quantity as the X-axis.The curve shows the quantity demanded at any
Demand Function: Example, Linear vs. Nonlinear
What's it: A demand function is a mathematical equation representing the relationship between demand and its determinants. The function shows us how the demand for a product is affected by factors such as its own price, buyer income, and
Ability to Pay Principle: The Who Pays What?
The ability-to-pay principle states that taxation should be based on the taxpayer's ability to pay. Lower-income individuals should pay less because they have a lesser ability to pay taxes. Conversely, wealthy or high-income individuals should bear a
Labor Mobility: Types and Impacts on Individuals, Businesses and Economy
Labor mobility is the freedom of workers to move between jobs, companies, and even countries. This movement is crucial for both individual career advancement and a healthy, functioning economy. In today's globalized workplace, skilled labor shortages
Economic Boomlet? What’s It? Explanation and Causal Factors
What's it: An economic boomlet refers to a brief period of rapid growth in economic activity. Output increases as demand grows. In addition, households see their financial prospects strengthening due to increased employment and cheap
How Capacity Utilization Impacts Businesses and the Economy
What's it: Capacity utilization refers to the extent to which existing production capacity is used. It may refer to a company's machinery or production facilities. Or, we might find it to describe an industry or an economy aggregate.What is
How Business Confidence Drives (or Deters) Economic Growth
What's it: Business confidence describes how optimistic or pessimistic businesses are about their current and future operating and financial conditions. Several factors influence it, including economic conditions, consumer confidence, demand,
Consumer Confidence: Its Effect on Aggregate Demand and the Economy
What's it: Consumer confidence describes how optimistic and pessimistic consumers are about their daily lives. It is usually associated with their economic and financial condition. When consumers are optimistic about their economic and financial
L-Shaped Recovery: Understanding Slow Economic Recoveries
An L-shaped recovery presents a particularly challenging scenario within the realm of economics. It's characterized by a sharp decline in economic activity, followed by a period of prolonged stagnation, visually resembling the letter "L" on a graph.
Money as a Store of Value (Pros & Cons) | Inflation & Alternatives
Money, as a store of value, plays a crucial role in any economy. It allows us to save and accumulate purchasing power today, confident that it will retain its worth when we need it in the future. This ability to preserve value over time is essential
Understanding the Statistical Discrepancy in GDP
Economists have a valuable tool for measuring a nation's economic health: Gross Domestic Product (GDP). But what if the calculations for GDP don't always match up perfectly? Enter the statistical discrepancy, the unexpected difference that arises