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In Short Elasticity is how behavior in a market changes in response to a change in price. A demand curve can be described as elastic or inelastic. A supply curve can be described as elastic or inelastic. See post on … Continue reading
Category Archives: Definitions
Introduction Previously I talked about supply and demand. In short, supply is how much of a good is being offered on the market. Demand is how many people want to buy that good. Equilibrium will tell you in a market … Continue reading
In Short A bubble is when the price of an asset rises far above any measure of its intrinsic value. People think prices will go up forever and buy (paying any price) because they think it will be able to … Continue reading
What is Economics? Economics is the study of the interaction between people within a market context. For example: Person A sells chairs, how do they maximize their profit? What is the Market? A market in the context of economics refers … Continue reading
In Short It’s the most important rule in economics. Basically the more there is of a particular item, the less valuable each individual item is. The less there is, the more valuable each item. Example of Supply and Demand Imagine … Continue reading
In Short The stock market is a place where people can buy ownership in various companies around the world. It’s a marketplace. The same way someone would go to the supermarket to buy an apple, a person goes to the … Continue reading
In Short Real estate is an asset class with its own unique curve. It has advantages and disadvantages when compared to stocks. It should be a part of every portfolio. What is Real Estate? Real Estate is land and the … Continue reading
In Short Currency is a medium of exchange that improves the efficiency of transactions. An Improvement Over Barter Before currency existed, people obtained what they needed from others via barter. Basically if I have a chicken and you have a … Continue reading
In Short All equity financing involves purchasing ownership of a company. The only difference is where the company is offered for sale. Public Equity This is the area that I focus in. It is companies (stocks) that are offered for … Continue reading
In Short It is the central bank of the United States. It controls the amount of currency within the economy via open market operations, inter-bank loan rates (Discount Rate), and the banking reserve requirements. All of these things control how … Continue reading