Efficient Market Hypothesis

Definition of Efficient Market Hypothesis It is the idea that the price of stocks and financial securities reflects all available information about them. If new information about a company becomes available, the price will quickly change to reflect this. Three Types of Efficient market hypothesis Weak EMH. This states all past market prices and data …

Read more

Why Long Boom in House Prices?

Readers Question How do you explain the long boom in house prices from the late 1990s? There were several reasons for the long boom in house prices between 1994 and 2007. Low Interest rates. In the early 1990s, UK interest rates reached 15% and were in double figures for several months. After the 1991 recession …

Read more

Why Does Federal Reserve Buy Treasuries?

Readers Question: Why does the federal reserve buy treasuries? Isn’t that just taking money from one pocket and putting it in another? There are a few reasons the Federal Reserve is buying treasuries. With recession and falling velocity of circulation, the Money supply adjusted for velocity of circulation is showing deflation. Therefore buying Treasures and …

Read more

Oil Price Futures

Oil price futures are financial contracts which involve obligations to buy or sell an instrument in the future at a fixed price. Oil price futures are a derivative, which means their value derives from the price of oil. Typically, people may buy oil futures with a 3 month date from the present time. Oil futures …

Read more

Should We Pay MPs More?

Ignoring the relative merits of claiming £20,000 of taxpayers money for help in cleaning an MP’s moat ( or the 48p for a packet of crisps or £10 for your husband to watch a blue movie) does it make sense to pay MPs more? Firstly, How Much do MP’s Earn? The official salary is £64,766. …

Read more

Question: Do people save more in a recession?

saving-ratio-since-1963-recession-growth

Readers Question: From my studies in economics I have always known that when there is a recession, there is a high tendency for people to borrow at a low interest rate since there is a fall in the mpc due to high unemployment right? In a recession, people tend to borrow less and save more. …

Read more

Richest Countries By GDP

Readers Question: Is Real GDP per head a better indicator of living standards compared to growth of Real GDP? Why? Real GDP per capita shows the average income of a country. If Liechtenstein has 0% growth of Real GDP in 2008, average incomes will reamin $118,000. A country like India may have GDP per head …

Read more

Item added to cart.
0 items - £0.00