Macroeconomics

bimetallism
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Bimetallism

imetallism is a monetary standard in which the value of the monetary unit is defined as equivalent both to a certain quantity of gold and to a certain quantity of silver; such a system establishes a fixed rate of exchange between the two metals. Characteristics of Bimetallism Both gold and silver money are legal tender in unlimited amounts. Highly popular use of currency…

the pigou effect
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Pigou Effect

he Pigou effect is an economics term that refers to the stimulation of output and employment. This is caused by increasing consumption because of a rise in real balances of wealth, particularly during deflation. Real wealth was defined by Arthur Cecil Pigou as the sum of the money supply and government bonds divided by the price level….

real and nominal interest rate
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Real And Nominal Interest Rate

he difference between the real and nominal interest rate is that the real interest rate is approximately equal to the nominal interest rate minus the expected rate of inflation. Difference Between the Real And Nominal Interest Rate Nominal Interest Rate The nominal interest rate is the simplest type of interest rate. It is the stated interest…

laffer curve
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The Laffer Curve

he Laffer Curve, created by Arthur Laffer, shows the relationship between tax revenue collected by the government and tax rates paid by citizens. It implies that as tax rates rose, tax revenues also increased till a high point and then tax revenues began to decline. History of the Laffer Curve During the mid 1970s, the United States…

Liquidity Preference Theory
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Liquidity Preference Theory

he Liquidity Preference Theory says that the demand for money is not to borrow money but the desire to remain liquid. The interest rate is the ‘price’ for money. The Liquidity Preference Theory was created by John Maynard Keynes in to explain role of the interest rate by the supply and demand for money. According to Keynes, the demand for money is…

Tax Systems
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Tax Systems

here are three types of tax systems: progressive, proportional and regressive. Direct and Indirect Taxes  irect taxes are taxes on wealth, profit and income. Indirect taxes are placed on goods and the burden of the tax can be divided between the buyer and the seller. Example: The sales tax in California is 8.75% Types of…

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