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Currency Exchange Rates and How They Are Determined or Calculated?

You will likely have noticed that currency exchange rates don’t tend to be static; in fact they can vary greatly from day to day. Some people actually use the fluctuation currency exchange rates as a means to make a profit; buying at one rate and selling at another. You may be wondering though, how exactly are these currency rates decided in the first place. Who decides how much a dollar is worth when compared to the Euro? You may also be asking yourself why they just don’t pick an exchange rate and just stick with it; instead of this constant fluctuation.

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What is the World Bank and What Does it Do?

Anyone who watches the news is sure to have heard about the World Bank, but there may be some uncertainty as to what this institution actually is. Confusion about the World Bank is understandable as it is unlike any other bank people will be familiar with. In fact many would argue that it isn’t even a bank at all and more an agency that specializes in providing leveraged loans.

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The Dream of a Steady State Economy

There are many different groups around the world who would love to see a steady state economy. This ambition is of particular importance to environmentalists who see it as a way to help protect the world from global warming.  There are claims that such an economy would be ethically on a sounder footing and would create more happiness for citizens.

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The Economics Concept of Diminishing Returns

Diminishing returns is probably one of the most important concepts in Economic theory. It is so famous that it has now entered common everyday speech. Some people do get confused with diminishing returns but it is actually quite a simple idea.

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What are Economies of Scale: Examples of Internal Economies and External Economies

An important idea in economic theory is economies of scale. If it wasn’t for the existence of this phenomena it is doubtful that the world economy would look anything like it does today.  The reason large companies and multinationals exist is because they take advantage of economy of scale.

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How Game Theory Applies To Economics

Anyone who saw the award winning film “A Beautiful Mind” will probably have heard of “game theory”. This film was based on the true story of John Nash and his battle with schizophrenia. This inspirational figure managed to overcome his mental health problems to go on to win a noble prize. The prize was awarded for his contribution to economics in the form of John Nash game theory; in particular his idea of the Nash’s equilibrium.

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What is Keynesian Economics?

Those who listen to the financial news may have heard the term ‘Keynesian economics’ floated around. There may be some confusion as to what this is actually referring to. Discussions about the validity of this theory can become heated among economists so it is worth having some idea as to what is behind it all.  A basic explanation will be provided here.

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What is Economics…And Why Should I Care? Part 2

Yesterday, In Part 1 we discussed economics terminology as it relates to your household budget. Today, let’s create a real example of the terminology in action.

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