The Environmental Kuznets Curve

The Environmental Kuznets Curve is used to graph the idea that as an economy develops, market forces begin to increase and economic inequality decreases. More specifically that as the economy grows, initially the environment suffers but eventually the relationship between the environment and the society improves. The Environmental Kuznets Curve…
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The Laffer Curve

The Laffer Curve was conceptualized for modern economies by Arthur Laffer during a meeting in which he argued against President Gerald Ford's tax increase. The Laffer Curve shows the relationship between tax revenue collected by the government and tax rates paid by citizens. The tax rates depicted on a Laffer Curve range from 0% to 100%. The…
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Inheritance Tax

An Inheritance Tax is a tax paid by the individual who inherits a deceased person's property or money. Keep in mind that an inheritance tax is different from an estate tax. An estate tax is a tax imposed on a deceased individual's assets. There are two other types of taxes as well: indirect taxes and direct taxes (also known as an income tax).…
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Liquidity Preference Theory

The Liquidity Preference Theory says that the demand for money is not to borrow money but the desire to remain liquid. In other words, the interest rate is the 'price' for money. John Maynard Keynes created the Liquidity Preference Theory in to explain the role of the interest rate by the supply and demand for money. According to Keynes, the…
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Types of Monetary Systems

A Monetary System is defined as a set of policies, frameworks, and institutions by which the government creates money in an economy. Such institutions include the mint, the central bank, treasury and other financial institutions. There are three common types of monetary systems - commodity money, commodity-based money and fiat money.…
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Income Elasticity of Demand (YED)

Income Elasticity of Demand (YED) is the responsiveness of demand when a consumer's income changes. It is defined as the ratio of the change in quantity demand over the change in income. YED is useful for governments and firms to help them decide on what goods to produce and how a change in overall income in the economy affects the demand for…
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