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...

Print Book Industry Relies on Coloring

If you’ve ever taken Econ 101 then you’ll recall in the first-class this simple principle. The entire economic system relies on the foundation of supply and demand. This in turn produces scarcity. The more scare a product or service, the higher the price...

Brexit on the Docket for the UK

An In/Out Referendum takes place Thursday in Britain as voters head to the polls to decide whether or not to stay or exit the European Union. If you need a brush up on the issue here’s a quick summary. As a whole economists seem to be united that the short term...

What are Financial Assets? Securities, Gains

Companies need money to spend but their money comes from more places than just profit. There are a number of methods to raise money to finance activities including the following instruments: a) Debt Securities (contracts to repay with securities) – Bonds:...