Currency devaluation means a reduced value of currency with respect to foreign currencies and its reduced purchasing power to foreign goods, which result from monetary policy. In a small open economy, as such the assumptions of the Mundell-Fleming model, currency devaluation can result from expansionary monetary policy, referring to the lower exchange rate instead of … Continue reading Currency Devaluation: Exports > Imports
The IS-LM model basically, is made up of two components: IS & LM curves. The IS curve represents a “[negative] relationship between the interest rate and the level of income that arises in the market for goods and services.” (Mankiw, 2010) IS stands for investment and saving. IS curve represents the market for goods and … Continue reading IS-LM Model – Theories of Short-Run Fluctuations
Currency devaluation is a form of monetary policy in which it reduces the value of a currency with respect to those goods, services or other monetary units that the currency can be exchanged with. Currency devaluation can only be part of a hampered market with a central bank, “[since] the Bretton Woods system the US … Continue reading Currency Devaluation
In this article we will cover unemployment and how it is affected by monetary policy. Firstly, any government policy has a level of uncertainty surrounding it. This can have an influence on the possibility of job seekers finding a job or a firm keeping on many employees. During such an uncertain ruling on a tax … Continue reading Monetary Policy & Unemployment
In the news, the British Government is out of pocket millions on its tax collection duties since February, surrounding VAT and corporation tax. The blame of late payment notices are being send to businesses, yet it was the HMRC’s fault in changing its bank details. “In February, the government department changed its International Bank Account … Continue reading EUROCRATS
That is the question that many people in the UK are asking themselves, however what does it mean? It is given the name Brexit as the term is an abbreviation for British Exit from the EU. Held on Thursday 23rd of June, British voters (citizens in Britain and the Commonwealth of Nations aged 18+) can … Continue reading To Leave or Not to Leave The EU?
Interest is a market participants preference valuation of present goods to future goods. In which one would prefer $10 now rather than $10 in a months time. The monetary unit here ascribes itself to the lenders compensated assurance of placing a premium on present goods, one would prefer $10 now rather than $10 in a … Continue reading A Billion Dollar Time Premium