Author Archives: NYC Journals Staff

The types of securities are as follows:• security deposit• lien• suretyship and guaranteeThe security deposit is a form of financial collaterals. If security deposit is offered for the insurance of an obligation, the holder can satisfy his claim directly from the amount of security deposit in case of non-compliance or non-contractual compliance of the contract.Continue reading “Collateral”

The financial position of an agent can be defined as the difference between its incomes and expenditures in a given time period. As someone’s income is simultaneously someone else’s expenditure, the aggregated financial position of all economic units is always zero ex post, which gives rise to perfect financial intermediation, i.e. deficits can be financedContinue reading “Financial Agency”

Market prices reflect the private costs and private benefits of producers and consumers. But sometimes production or consumption imposes costs or benefits on third parties—on those who are neither suppliers nor demanders in a market transaction. For example, a paper mill fouls the air breathed by nearby residents, but the market price of paper failsContinue reading “Externality”

In any market, the price is what suppliers receive and what demanders pay. In financial markets, those who supply financial capital through saving expect to receive a rate of return, while those who demand financial capital by receiving funds expect to pay a rate of return. This rate of return can come in a varietyContinue reading “Supply and Demand Returns”

Markets to provide liquidity are created on several levels of the monetary system, by deficit and surplus agents. Amounts paid for shipments in wholesale trade can be large enough not to let them rest on suppliers’ accounts but to be tied up in the form of short- term deposits or short-term securities. Banks must beContinue reading “Market Liquidity”

Types of FirmsThere are about 25 million for-profit businesses in the United States.Two-thirds are small retail businesses, small service operations, part-time home-based businesses, and small farms. Each year more than a million new businesses start up and almost as many fail. Entrepreneurs orga- nize a firm in one of three ways: as a sole proprietorship,Continue reading “Types of Business”

What Goods and Services Will Be Produced?Most of us take for granted the incredible number of choices that go into deciding what gets produced—everything from which new kitchen appliances are introduced and to which roads get built and which movies get made (for example, movie studios pay for about 10,000 scripts a year but makeContinue reading “Economic System Questions”

Given the resources and the technology available in the economy, the production pos- sibilities frontier, or PPF, identifies possible combinations of the two types of goods that can be produced when all available resources are employed fully and efficiently. Resources are employed fully and efficiently when there is no change that could increase the productionContinue reading “PPF”

Economic Analysis Is Marginal AnalysisEconomic choice usually involves some adjustment to the existing situation, or status quo. Amazon.com must decide whether to add an additional line of products.The school super- intendent must decide whether to hire another teacher.Your favorite jeans are on sale, and you must decide whether to buy another pair. You are wonderingContinue reading “Marginal Benefits”

Rational Self-InterestA key economic assumption is that individuals, in making choices, rationally select alterna- tives they perceive to be in their best interests. By rational, economists mean simply that peo- ple try to make the best choices they can, given the available information. People may not know with certainty which alternative will turn out toContinue reading “Self Interest”

Goods and ServicesResources are combined in a variety of ways to produce goods and services. A farmer, a tractor, 50 acres of land, seeds, and fertilizer combine to grow the good: corn. One hundred musicians, musical instruments, chairs, a conductor, a musical score, and a music hall com- bine to produce the service: Beethoven’s FifthContinue reading “Goods and Services”

Economic Models Economists have developed a number of sophisticated models designed to simulate the changes in economic conditions that could be expected from a trade agreement. These models, which are based on modern economic theories of trade, are helpful where the barriers to trade are quantifiable, although the results are highly sensitive to the assumptionsContinue reading “Economic Regression Modeling”

ResourcesResources are the inputs, or factors of production, used to produce the goods and services that people want. Goods and services are scarce because resources are scarce. Resources sort into four broad categories: labor, capital, natural resources, and entrepreneurial ability. Labor is human effort, both physical and mental. It includes the effort of the cabContinue reading “Resources”

The Economic Effects of Trade Liberalization The objective of reducing barriers to trade, of course, is to increase the level of trade, which is expected to improve economic well-being. Economists often measure economic well-being in terms of the share of total output of goods and services (i.e., gross domestic product, GDP) that the country producesContinue reading “Economic Effects of Trade”

Terms of Trade An important concept in international trade theory is the concept of “terms of trade.” This refers to the amount of exports needed to obtain a given amount of imports, with the fewer amount of exports needed the better for the country. The terms of trade can shift, either benefiting a country orContinue reading “Terms of Trade”