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Who gives transfer payments?

Transfer payments are given by government of various levels to under-privileged society members┬álike unemployed workers, the elderly who’s unable to maintain a decent life by inability to work and such.

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Current GDP, GNP of United States and other countries

As of the most up to date data from authoritative sources such as International Monetary Fund, World Bank and CIA World Fact Book, below is the worldwide nations ranked by GDP. United States is ranked second immediately after EU with a GDP of more than 13,000 billions in 2007. Read the rest of this entry »

What are the Causes of Economic Recession

What is an economic recession?

In a perspective as broad as nation wide, or macroeconomically, a recession is a slightly obvious decline in Gross Domestic Product (GDP, just think of it as the total wealth or wellness all people within a nation produce within a given year) compared to previous quaters, or in a business cycle. A decline is only regarded as a recession if it has lasted more than 2 quarters. Also, the decline should not be too apparent as to be an economic depression (approx. 10% drop of GDP) or even more devastating as to be a economic collapse.

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Resource circulation in the macroeconomic loops

This flow-chart diagram illustrates how governments, households, corporations and international entities interact in 3 major markets to run the economy as a whole: workforce market, financial market and commodity market.

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How to Read a Stock Listing / Quote

Examine the table below. The first two columns in the listing provide the highest and lowest prices at which the stock has traded in the last 52 weeks. The next two columns give the name of the stock and its symbol. The next figure is the dividend payout. The 4.84 means that the firm paid shareholders an annualized cash dividend in the last quarter of $4.84 per share (i.e., the actual quarterly dividend was $1.21). Read the rest of this entry »

3 Dimensions of Risk Transfer: Hedging, Insuring and Diversifying (Differences Compared)

One is said to hedge a risk when the action taken to reduce one’s exposure to a loss also causes one to give up of the possibility of a gain. For example, farmers who sell their future crops before the harvest at a fixed price to eliminate the risk of a low price at harvest time also give up the possibility of profiting from high prices at harvest time. So, they are hedging their exposure to the price risk of their crops.

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What are Insuring and Hedging (Comparison)

There is a fundamental difference between insuring and hedging. When you hedge, you eliminate the risk of loss by giving up the potential for gain. When you insure, you pay a premium to eliminate the risk of loss and retain the potential for gain.

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What are Junk Bonds

Junk bonds, also known as high-yield bonds, are nothing more than speculative-grade (low-rated or unrated) bonds. Before 1977, almost all junk bonds were "fallen angels, " that is, bonds issued by firms that originally had investment-grade ratings but that had since been downgraded. In 1977, however, firms began to issue "original-issue junk."

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