How the Federal Reserve Increases Money Supply

To understand how the Federal Reserve increase money supply, it is important to first understand the meaning of money supply, which we will think of as: money which is available (in the economy) for use. Second, you must remember the three parties that influence the money supply:  The Federal Reserve Banks Households that deposit money It will [...]

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List of Economic Indicators to Guide Your Investment Decisions

Economic indicators are useful in telling us whether the economy is doing well or not.  They indicate whether an economy is heading in or out of a recession, or if the economy is experiencing a boom.  There are a lot of economic indicators and sometimes they may contradict one another.  Thus, it is important to look at [...]

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Real Interest vs. Nominal Interest: What’s the Difference?

Start talking about money and interest rates come into the equation.  Get a mortgage, buy a house, or get an auto loan---you will hear about interest rates.  But what you may not know is that the interest rate referenced most of the time is the nominal interest rate, and not the real interest rate.  So [...]

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What is the Business Cycle and How Does it Work?

The business cycle affects everyone, from the busy banker to a simple utility worker. These two words mean a lot in daily broadsheets because the effects can be tremendous enough to shake the entire stock market and bring people out of job. What actually is a business cycle and how does it work? If it [...]

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What Happens When Gold Prices Drop

Although gold is no longer a standard form of currency in the vast majority of countries, it is still of extreme macroeconomic importance. The price of gold is tied to many currencies and currency pairs. Here is what happens to the major currencies when gold prices drop: US Dollar: The US Dollar and gold have [...]

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How Does the Forex Market Work?

The foreign exchange market, most commonly known as the Forex market, is home to the global decentralized trading of international currencies--specifically where trillions of U.S. dollars are traded each day. If you need Japanese yen, you buy it through the Forex market. Participants trade not in one huge platform but rather through electronic communication networks [...]

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Recessions in the US Since the 20th Century and What Caused Them

Recession is defined as the deterioration of a country’s economic activity for two successive quarters. The United States, although widely considered as an economic power, has not been immune to the scourge of recession. In fact, the nation has experienced a number of economic setbacks since the beginning of the 1900s. Here are the various [...]

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Can You Make Money in the Stock Market?

Can you make money in the stock market? Or is it all just one big gambling scheme? The short and unequivocal answer is: yes can make money in the stock market. Otherwise, happenings at the New York Stock Exchange won’t make any difference on day-to-day economic events. You may have already learned from history that [...]

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