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What are the Industry Life Cycles

A typical industry life cycle might be described by four stages: a start-up stage, characterized by extremely rapid growth; a consolidation stage, characterized by growth that is less rapid but still faster than that of the general economy; a maturity state, characterized by growth no faster than the general economy; and a stage of relative decline in which, the industry grows less rapidly than the rest of the economy, or actually shrinks.

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How Funds Are Sold

Most mutual funds have an underwriter that has exclusive rights to distribute shares to investors. Mutual funds are generally marketed to the public either directly by the fund underwriter or indirectly through brokers acting on behalf of the underwriter. Direct marketed funds are sold through the mail, various offices of the fund, over the phone, and, increasingly, over the Internet. Investors contact the fund directly to purchase shares. For example, if you look at the financial pages of your local newspaper, you will see several advertisements for funds, along with toll-free phone numbers that you can call to receive a fund’s prospectus and an application to open an account with the fund.

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Why currency appreciates in real terms during inflation stabilization?

A common thread in the exchange rate-based stabilization experiences we have reviewed is a real currency appreciation accompanied by a growing deficit on current account. Only countries like Israel and Chile, which have avoided drastic real currency appreciation, have been able to reduce inflation without generating subsequent crisis and pressures for policy reversals. Thus, an understanding of why real appreciation occurs after the government targets the exchange rate is central to understanding why many stabilization efforts fail. There are three main theories explaining real appreciation. Read the rest of this entry »

What are Present Value and Future Value

calculation of present value in financial decisions Finance is all about time and risk. It’s basically a study of how people make decisions regarding the allocation of resources over time and the handling of risks of them. Playing with it requires some very fundamental techniques and strategies, which are all indispensable if not enough for success in financial markets. And the idea of present value is one of the most important that will help you value financial assets over time thus making choices between current resources and future gains.

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Macroeconomic Unemployment Explained

Could the bee ever be unemployed? While many of us surely don’t appreciate it from a personal perspective, unemployment is unavoidable in any economy. However, it is not necessarily harmful. In a healthy economy, a certain degree of unemployment indicated as a percentage reflects the fact that there constantly are job seekers and employers voluntarily running after better opportunities for their own good.

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EconGuru Economics and Finance Knowledge Base

Since its inception in 2006, EconGuru has never stopped in delivering useful and original content for eager minds that crave Economics and Finance knowledge. Just yesterday we decided to migrate the entire CMS of EconGuru from hand shaped SSI and PHP scripts to the blogging platform WordPress. It’s one of the finest CMS we can find on the web that is easy to use and customize, secure and handily facilitates multi-authoring. Say goodbye to custom coding and embrace the era of blogging.

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