intrinsic theory of value

Intrinsic Theory of Value

he Intrinsic Theory of Value (also known as the theory of objective value) is any theory of value in economics which holds that the value of an object, good or service, is intrinsic or contained in the item itself. These theories try to explain the exchange value or price of a good or service. Most such…

the lipstick effect

The Lipstick Effect

he lipstick effect is the theory that when facing an economic crisis or the economy is in a recession, consumers will be more willing to buy less costly luxury goods. For example, instead of buying expensive fur coats, women will instead purchase expensive lipstick or luxury cologne. Psychology Behind The Lipstick Effect The underlying implication is that consumers…

the volcker rule

The Volcker Rule

he Volcker Rule refers to § 619[1] (12 U.S.C. § 1851) of the Dodd–Frank Wall Street Reform and Consumer Protection Act, originally proposed by  former United States Federal Reserve Chairman Paul Volcker to restrict United States banks from making certain kinds of speculative investments that do not benefit their customers. Volcker argued that such speculative…

trade finance

Trade Finance

anks involved in commercial lending provide a wide range of financing packages for international trade, commonly called trade finance. Trade finance not only assists the buyer in financing its purchase but also provides immediate cash to the seller for the sale. This is profitable for the lending institution. This mechanism is an important financing or credit…

Introduction to Bill of Exchange

Introduction to the Bill of Exchange

 bill of exchange is a specialized type of international draft used to expedite foreign money payments in many types of international transactions. In addition, a draft is commonly used in the U.S. while a bill of exchange is primarily used outside the U.S. A negotiable instrument is a signed writing, containing an unconditional promise or order to…

letters of credit

Letters of Credit

etters of credit are an obligation of a bank, usually irrevocable, issued on behalf of their customer and promising to pay a sum of money to a beneficiary upon the happening of a certain event or events. Letters of credit are the substitution of the credit and good name of a bank for that of their customer,…

© 2016 Intelligent Economist. All rights reserved.