The Federal Reserve

The Federal Reserve (known more informally as “the Fed”) is the central bank of the United States of America. It is made up of a network of 12 regional Federal Reserve banks, but the Fed’s power centers in its New York bank. It has more power than any other economic actor in the country and, by extension, in the world as a whole.As officially…
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Variable Costs

Costs can be divided quite simply into two basic categories: variable costs and fixed costs. Variable costs are those that vary with production levels. As the volume of production increases, these costs increase; likewise, as the volume of production decreases, variable costs also decrease.This is in contrast to fixed costs, which exist…
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What is Economics?

Economics, a discipline and set of methodologies within the social sciences, can be described in a multitude of ways. The field focuses on the distribution, consumption, and production of wealth; one can also say that economists study human behavior and choice regarding buying and selling.Economists use key concepts such as the law of supply…
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The Circular Flow of Income

The Circular Flow of Income shows how different units in an economy interact. It shows how household consumption is a firm's income, which pays for labor and other factors of production, and how those firms provide households with income. The Circular Flow of Income demonstrates how Economists calculate national income or Gross Domestic Product.…
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Economies of Scale

An economy of scale is achieved when increasing the scale of production decreases long-term average costs. In other words, the cost of production per unit decreases as a company produces more units. Reducing the cost per unit of production is the most significant advantage created by economies of scale.For example, if we are producing a video…
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Cornucopia

The term cornucopia has its roots in Greek mythology. Cornucopia translates to the "horn of plenty", which magically supplied its owners with endless food and drink. Thus the cornucopians are sometimes known as "boomsters", and their philosophic opponents—Malthus and his school—are called "doomsters" or "doomers." Theory of Cornucopia in Economics…
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