Category: Uncategorized

  • Understanding the difference between Moral Hazard and Averse Selection

    Understanding the difference between Moral Hazard and Averse Selection

    Moral hazard as well as adverse selection are utilized to describe economics in risk-management and insurance to define situations in which one person is at disadvantage because of the actions of another.   Moral danger is when there’s an asymmetrical knowledge among two people, and an alteration in the behaviour of one of them occurs when an agreement between two […]

  • The Trade Debt: Benefits and Drawbacks

    The Trade Debt: Benefits and Drawbacks

    The economists are divided on the basic issue of whether long-term trade can be sustained. What is a Trade Deficit? A trade deficit happens when the amount of the countries imports surpasses its worth of the exports–with exports and imports are both physical items as well as services. In simple terms the term “trade deficit” means that the country is […]

  • What is Money?

    What is Money?

    Money is the reason that makes the world go around. The economies are based in the trade of cash to purchase goods and services. The economists define the definition of money, its origins from and how much it’s worth. Here are the diverse characteristics of money. Medium of Exchange Before the advent of the currency–that is, money–people used to […]

  • Are We On The Verge Of A Hyperinflation?

    Are We On The Verge Of A Hyperinflation?

    There are those who believe that the U.S. is set to attain an inflation rate that is 1,000% or higher Hyperinflation typically referred to as a series of extreme, out of control price rises, is not common in advanced countries. It’s because true hyperinflation needs to achieve a very high threshold, which is an inflation rate of […]

  • Performativity

    Performativity

    What is Performativity in Economics? The theory of performativity suggests that financial or economic models instead of objectively assessing the reality of a certain aspect but instead, assist in shaping this aspect of reality into what the model portrays. In other words, it is the idea that economic theory doesn’t simply define what the universe is, […]

  • Efficiency Wages

    Efficiency Wages

    What are the Effective Wages? In the field of labor economics efficiency wages are an amount of money which are paid to employees above what is considered to be the minimal wage in order to keep the most skilled and productive workforce. The theory of efficiency wage states that an employer should pay its employees at a high […]

  • The Bullwhip Effect

    The Bullwhip Effect

    What is The Bullwhip Effect? The bullwhip effect describes an instance wherein tiny variations of the demand on the end that is retail of the distribution chain are amplified as you move upwards in to the manufacturing end of the chain. end of the retail chain up to manufacturing. This occurs when a retailer adjusts the quantity of the item it […]