The term economic indicators summarizes key figures with the help of which the development of an economy can be represented or described over a certain period of time. They provide numerical values and comparative series for forecasting, describing and analyzing an economy. Business indicators: leading indicators, presence indicators & lagging indicators In this lesson we…
Author: top-mba-universities
What is Keynesianism?
Keynesianism is a school of thought from economics, which goes back to the economist John Maynard Keynes (1883-1946). The theories of Keynesianism are essentially based on Keynes’ 1936 published book “General Theory of Employment, Interest and Money”. The school of thought itself emerged in the course of the criticism of the neoclassical and is often…
What is inflation?
Inflation is a sustained increase in the price level for goods and services, which is accompanied by a corresponding inflation and a loss of purchasing power. Depending on the trigger, the level of the inflation rate and the awareness of the market participants, different forms of inflation can be distinguished from one another. In this…
What is prohibitive price?
With the prohibitive price, the economic price is determined at which a seller does not sell any goods. The quantity requested corresponds to the value zero. Goods that are offered at this price do not make consumers willing to pay. Prohibitive price This lesson covers the prohibitive price. You will find out what the prohibitive…
What is hyperinflation?
Hyperinflation is an extremely strong form of inflation. The inflation rate in the period of hyperinflation is 50% and more. The price level is rising at a very rapid pace, the currency of the national economy is losing its hold. This reduces the purchasing power of the citizens. The only possible countermeasure is currency reform….
What is boom?
The boom ( “Boom” ) is an economic cycle as part of the economic cycle. Essential characteristics of the boom are full employment, production at the limit of capacity, strong demand and rising prices. This is why it is also known as a boom. In terms of the business cycle, the boom is the turning…
What is real income?
Real income is an indicator that shows purchasing power taking inflation into account. It therefore describes the amount of goods that can be purchased on the market with the nominal income. In this lesson we explain the meaning of real income and the real wage index and how they are calculated. Following this lesson, we…
What are trade barriers?
Trade barriers are economic measures that make the exchange of goods and services more difficult. In particular, trade between two different economies is inhibited. A distinction is made between tariff and non-tariff trade barriers. This lesson covers the barriers to trade. You will get to know the meaning of trade barriers and we will show…
What is demand inflation?
Demand inflation is when the price increase associated with inflation is due to a significant change in demand. Four types of demand inflation can be distinguished from one another. What they all have in common is that they can be dealt with by means of contractive measures. In this lesson we explain the main characteristics…
What is Giffen goods?
According to sportingology, the hallmark of Giffen goods is that as prices rise, so does the demand for these goods. This contradicts the actual market conditions. If a company wants to sell a new product, it sets a sales price. If the demand is too low, the company lowers the price. If more consumers want…
What is monopoly of demand?
According to theinternetfaqs, the demand monopoly is a market form and at the same time a variant of the monopoly. In the case of a monopoly of demand, several suppliers face a single customer. In this lesson, we explain the most important features of the demand monopoly, the behavior of the individual market participants and,…
What is fair distribution of income and wealth?
The term “income” summarizes all income that the natural and legal persons of an economy receive at regular intervals. A household’s asset includes all tangible and intangible goods that are of value to the owner. A fair distribution of income and wealth can only be achieved in an economy if certain aspects are taken into…
What is demand oligopoly?
The demand oligopoly is a variant of the oligopoly. It is characterized by the fact that many providers want to sell their products, with the demand being low. The challenge of a demand oligopoly is to arouse customers’ interest in buying. This is often only possible through lower prices. The market form can often be…
What is recession?
The recession is an economic phase during which the economic performance of an economy continuously declines. This phase is primarily characterized by falling order numbers, rising unemployment and a generally more pessimistic climate. The recession is preceded by the boom and it itself leads to the depression. In this lesson we explain the most important…
What is nominal gross domestic product?
The nominal gross domestic product evaluates the production of goods and services that were produced within a period and within a country at the currently valid market prices. The total value is made up of the amount of goods and services produced as well as their prices. In this lesson we introduce you to the…
What is real gross domestic product?
According to healthknowing, the real gross domestic product is a variant of the gross domestic product (GDP), which is independent of price fluctuations. The real gross domestic product can thus be described as the gross domestic product with constant prices. In this lesson we explain the importance of the real domestic product, its calculation and…
What is market economy?
A market economy is an economic order in which both planning and control of all economic processes are coordinated via markets with the help of price mechanisms. The task of the state lies primarily in the definition of suitable framework conditions with the help of which the competition can be coordinated in a meaningful way….
What is money supply?
The money supply is the entire money supply of an economy. The money stock means the cash and book money that is in the possession of non-banks. All public administrations, companies and private citizens are considered non-banks. The money that is managed by the banks does not play a role in determining the amount of…
What is open inflation?
With open inflation, every market participant can see the rise in the general price level. This term is mainly used in connection with or to differentiate it from hidden inflation. Open inflation is the rule of inflation, at least in Germany, as the inflation rate is measured permanently. In this lesson we explain the concept…
What is galloping inflation?
Galloping inflation is a type of inflation that is particularly evident. The price level rises rapidly, while at the same time the value of money decreases rapidly. In this lesson we will show you the main characteristics of galloping inflation, typical reactions of market participants and give you an impression of their effects on an…
What is macroeconomics?
Alongside microeconomics, macroeconomics is one of the two sub-areas of economics and deals with the macroeconomic behavior of the individual economic sectors, analyzes macroeconomic markets and their interrelationships. In this lesson we give you an overview of the importance of macroeconomics in economics and its relationship to microeconomics. We will also introduce you to their…
What is frictional unemployment?
Frictional unemployment is caused by frequent job changes. This type of unemployment occurs when an employee does not find a new job immediately after the termination of an employment relationship. If the employee terminated the employment himself, the frictional unemployment is to be added to the voluntary unemployment. If he has been given notice, unemployment…
What is magic square?
As an economic concept, the magic square is intended to ensure overall economic equilibrium. It consists of the economic policy objectives: steady and reasonable growth of the economy Stability of the price level high level of employment external balance In this chapter you will learn what the magic square is and when it plays a…
What is free market economy?
The free market economy is a form of economy in which the market is regulated solely by the price mechanism ( supply and demand ) and not by state intervention. The individual market participants are given the right to develop unrestrictedly. In this lesson, we describe the most important features of a free market economy,…
What is production calculation?
The production calculation is a method for calculating the gross domestic product and gross value added. It is used to calculate the economic performance of an economy. This lesson explains the meaning and use of the production analysis to calculate gross value added and gross domestic product. This is then illustrated using Germany as an…
What is duopoly?
The duopoly characterizes a type of market in which two providers satisfy the needs of many customers. The competition between the two companies results in price fixing and volume competition. The duopoly is different from the monopoly and other forms of market. Overview of market types: duopoly This lesson introduces the duopoly. You will find…
What is depression?
The depression is a phase of economic activity that is primarily characterized by a weak economy. This is mainly expressed in the low number of orders, low national income and a decline in gross domestic product. The depression follows the downturn ( recession ). It is followed by the upswing phase (expansion). This lesson describes…
What is deflation?
According to etaizhou, the term deflation describes a sustained and noticeable decline in the general price level for the goods or services produced in an economy. In this chapter we will show you what exactly defines deflation, how it occurs and what effects it can have. With the help of our subsequent exercises you can…
What is gross value added?
The gross value added is an economic indicator that only records the added value created in the production process. It is calculated by deducting intermediate consumption from production values and is valued at production prices, i.e. without taxes and taking into account subsidies on goods. As part of the production approach can be selected from…
What is gross domestic product?
The gross domestic product is a measure of the total economic performance of an economy within a certain period of time. It serves as an important indicator for the performance of an economy, as it provides information about value added, i.e. the production of goods and services minus intermediate consumption and domestic imports. In this…