News Flash – Canadians Don’t Use RRSP Room

News Flash – Canadians Don’t Use RRSP Room

Canadians are expected to contribute a record $38.6 billion towards their RRSPs in 2014 but this number is minuscule compared to the $951 billion in unused RRSP contribution room. The number of contributors from 2013 to 2014 was in fact up 3.2% Fewer than 40 per cent...

Intro to Demand Theory – How to Manage Constraints

Welcome to the next section following a discussion on utility and indifference curves (preferences of consumers). We are now into a discussion on demand theory; the previous posts are linked chronologically at the bottom of this post. Demand theory wants to explore...

Cobb Douglas Function – Demand Theory

In the past installments from DiscussEconomics on demand theory, now we’re venturing into the graphical and mathematical expressions of the Cobb Douglas demand function. Graphically expressed (utility maximizing) with the assumption well-behaved preferences. The...

Demand Theory – Consumer Choice Problem

Normal, Inferior, Neutral, Luxury, Necessary Goods There are three fundamental questions about a consumer’s consumption response: 1. How will demand change for a good i change in response to a increase or decrease in the price of i? 2. How will demand for good i...

Introduction to Macroeconomics – Some key terms

Economics: The Study of how society deals with scarcity. Here is a brief article on the introductory components of any economy with a macroeconomic slant. In the economy we expect to find these four components: resource endowment, technology, preference, institutions....

Government Buying It’s Own Bonds?

Not that they can’t, but why would it be bad policy to raise government revenues by issuing bonds that are then sold to the monetary authority? Here are some thoughts in relation to a fixed exchange system and a floating exchange rate system. There is an...
Explaining Clearing Drains and Currency Drains

Explaining Clearing Drains and Currency Drains

Here is a brief explanation on the nature of clearing drains and currency drains. The applications include part of how banks lend and settle account between each other. Put yourself into a context of the major banks and how they move their money between each other and...

The Impact of Different Interest Rates

Here is a brief example that explain the impact of interest rates. We’ll assume two periods for simplicity sake. Period 1 (Year 1) will be the CURRENT period, and Period 2 (Year 2) will be the FUTURE period. Other notes for this example: A consumer who earns...

National Income Accounting in an Open Economy

This article continues on from a previous entry in our macroeconomic blog category called Balance of Payments explained. This article provides an example of the national income accounting scheme in action within an open economy. Comments are always welcome. Remember...