Eric huang

Expansionary monetary policies are actions taken by central banks to stimulate economic growth. Central banks, such as the Federal Reserve in the U.S., employ these policies to strengthen the economy. The key steps include decreasing the discount rate, purchasing government securities, and reducing the reserve requirement. These actions aim to expand the money supply for […]

When discussing the top savers among nations, we refer to those with the highest savings rates, not necessarily the highest incomes. For instance, a country with an average income of $10,000 and savings of $2,000 has a 20% savings rate, similar to another country saving $20,000 out of $100,000 income, also at 20%. Saving can

Response lag, also known as impact lag, is the time it takes for monetary and fiscal policies to affect the economy after their implementation. These policies are designed to smooth out the economic cycle or respond to an adverse economic event. The concept of response lag is crucial for understanding how policy changes are noticed

A stimulus check is a payment made by the U.S. government to taxpayers, intended to encourage spending during economic contraction. These checks can be delivered via paper check or direct deposit and are often part of a larger federal stimulus package. The CARES Act in 2020 and the American Rescue Plan in 2021 included such

Moral suasion is a method of influencing behavior through persuasion and implicit threats, rather than coercion or force. In the realm of economics, central banks often employ moral suasion to shape market and public sentiment. Central bankers use moral suasion to convince entities to act in ways that align with economic policy goals. This involves

Currency is a medium of exchange for goods and services. It is generally money in the form of paper and coins, usually issued by a government and accepted at its face value as a method of payment. Currency serves as the primary medium of exchange in the modern world, having replaced bartering as a means

The United States imported $336.7 billion in goods in May 2024. That’s a decrease of $1.2 billion from the previous year, according to the U.S. Bureau of Economic Analysis (BEA). The U.S. goods and trade deficit increased 0.8%, or $75.1 billion, from just one year before. What was all that stuff we bought? The raw

Foreign exchange intervention is a monetary policy tool used by central banks to actively influence the exchange rate of their national currency. This is typically done using the bank’s reserves or its authority to generate currency. Central banks, particularly in developing countries, intervene in the foreign exchange market to build reserves or provide them to

The monetary base represents the total amount of a currency in circulation or held in reserves. This includes money held by the general public and commercial bank deposits, as well as any money held in reserves by these institutions at the central bank. While this measure of the money supply is not often cited due

Foreign exchange reserves are assets held by a central bank, denominated in a foreign currency. These reserves serve multiple purposes, primarily to back liabilities and influence monetary policy. They can include banknotes, deposits, bonds, treasury bills, and other government securities. Key Takeaways: – Foreign exchange reserves are held by a nation’s central bank in foreign