What's it: Net tax equals government tax revenue after deducting transfer payments. It represents the remaining revenue to finance government spending. Changes in net taxes are closely related to economic growth. For example, tax revenue
Macroeconomics
Nominal GDP: Meaning, Formula, Importance, Difference With Real GDP
Nominal GDP is the monetary value of output produced in a country for a certain period (a year or quarter), measured at current prices. It contrasts with real GDP, which measures the same output but using constant prices, instead of current prices.
Inflation: Types, Importance, How To Calculate, Policies to Affect It
Inflation is an increase in the general level of prices of goods and services in the economy over time. If the price of one item or several items rises, it is not inflation. If inflation exists, the prices of all goods and services increase, as
Aggregate Demand: Formula, Components and Determinants
What's it: Aggregate demand (AD) is the sum of demand for goods and services in the economy at a given price level and a certain period. In the open economy, it comprises demand from four macroeconomic sectors: households, businesses, governments,
Aggregate Supply: Types, Curves, and Determinants
What it's: Aggregate supply (AS) is an economy's total goods and services. It behaves differently in the very short run, short run, and long run. Each has a different elasticity. Short-run aggregate supply determines actual real
Very Short-Run Aggregate Supply: Its Curve and a Brief Explanation
What's it: Very short-run aggregate supply refers to the aggregate supply in which firms change the output to a limited extent without changing prices. It has a perfectly elastic curve, a horizontal line. What is the difference between the
Business Sector: Roles, Ownership, and Types
What's it: The business sector is a private economic actor dealing with producing goods or providing services. It covers all businesses, from small to giant, across industries. Together with the household sector, it forms the private sector. And
Gross Domestic Product (GDP): Three Approaches, Importance, How to Calculate
Gross Domestic Product (GDP) is the total market value of all final goods and services produced in the domestic economy during a certain period. Alternatively, we can also define GDP as the total expenditure or total income in the
Currency Depreciation: Meaning, Causes, Impacts
Currency depreciation is a decrease in the purchasing power of domestic currency against other currencies. Currency depreciation has considerable impacts on the economy, particularly international trade and international financial