Governments play a critical role in the world of finance. Through legislation, they set the basic boundaries for what is permissible and what is not; through fiscal and monetary policy, they manage the evolution of the economy as a whole; and through their own financing needs, they exert an enormous effect on the financial markets.
It [...]
The exchange rate is the rate at which one currency can be traded for another. Over the years, governments have adopted many different ways of managing exchange rates, including setting them by fiat and influencing them through central bank intervention. Today, most exchange rates in the developed world are freely floating, meaning that they are [...]
The Rate of Inflation is the rate at which prices are rising within the economy in general within a one year period. It is regarded as one of the most important economic indicators. Of course, it is not practical to measure changes in price for all goods which are sold within an economy so governments measure [...]
Consumer spending is a measure of the amount of money used by ordinary people to make purchases in an economy in a period of time. It is one of the most important drivers of a modern economy. Consumer spending is affected by a number of factors. In part, it is seasonal in nature. In Western [...]
Gross Domestic Product (GDP) is a measure of the total economic value of everything produced in a certain area (usually a country) in one year. The wealth of a country is usually measured as GDP per capita. This figure is arrived at by taking the total gross domestic product and dividing it by the number [...]
The term economy is usually used to describe the sum total of transactions – the buying or selling of goods or services - within a defined geographic area, usually a country, over a period of time. Economists have devised a number of concepts for measuring the size of an economy. Among these are the Gross [...]