The central bank uses monetary policy to reduce inflation by making money less available, influencing the rate at which people want to borrow money for investments (interest rates) and how much currency is in circulation (money supply). Monetary policy is generally used when fiscal policy fails. The type of policy used by …
Oftentimes, economists contrast fiscal policy with monetary policy which a country’s central bank enacts and not the elected government officials. Fiscal policy is a highly politicized aspect of an economy because it is the government that has sole control over it. In essence, it encompasses the things that the government decides to …
What is sales promotion? Sales promotion refers to a marketing strategy where a business makes use of short-term campaigns to spark up the interests of the public and create demand for a product, service, and other offers. Primarily, businesses make use of sales promotion to influence consumer behavior and motivate target consumers …
What is Financial Management? Financial management refers to the act of planning, organizing, directing, and controlling financial activities such as the acquisition and utilization of funds of an enterprise. In other words, it is the application of general management principles to the enterprise’s financial resources or possession. This activity is vital to …
What is deflation in economics? Deflation refers to a general decrease in the prices of goods and services which typically has to do with a decrease in the supply of money and credit in the economy. In essence, deflation occurs when the prices of goods and services begin to decline in the …
What is the balance of payments (BOP)? The balance of payments refers to a statement or record that provides information regarding all the transactions that took place between a country and the entire world over a definite period of time. This period of time can be quarterly or yearly. In other words, …
Depreciation meaning What is depreciation in accounting? The term depreciation in accounting refers to the method a company uses in the allocation of the cost of a tangible or physical asset over its life expectancy or useful life. It is a representation of the rate at which the value of an asset …
What is monopolistic competition? Monopolistic competition is a market structure whereby there are many sellers or firms in the market or industry that offer similar products or services but not perfect substitutes. In other words, these many firms offer similar commodities but these commodities are not homogeneous or identical. The reason why …