» Macroeconomics
John Maynard Keynes called gold “the barbarous relic”. Now, long after Keynes’ school of economics became unfashionable, gold is once again in fashion, hitting an all time dollar record even when other metals and commodities have dived in price as a result of poor industrial demand. So what is driving the gold price?
Quantitative Easing is essentially the creation of money. As we live in a digital age, the money is not even printed any more but simply created on computers. How come we aren’t seeing prices rise?
From a macroeconomic perspective, households, government and firms (corporations) are the 3 fundamental players of money and resources. This flowchart diagram below illustrates how they interact and exchange resources.
Firms and households interact and exchange resources in the big Circular Flow of Income illustrated by the diagram below.
Transfer payments are given by government of various levels to under-privileged society members like unemployed workers, the elderly who’s unable to maintain a decent life by inability to work and such.
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 »
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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