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One term that is very relevant to today’s world is inflation, which will be the topic of this newsletter. Over time the buying power of currency goes down. 100 years ago, 1 dollar was far more valuable than 1 dollar … Continue reading
Category Archives: Economics
November was a good month. Everyone was up. When inflation is extremely high as it was in November, one organization that is extremely relevant is the Federal Reserve. In this newsletter we will define what the Federal Reserve is and … Continue reading
The stock market over the last month is up a little bit. The Dow is up roughly 513 points or about 1.9%. The quarter is about flat. The topic of this newsletter will be currency and inflation. Let’s start with … Continue reading
Definition of Internal Rate of Return Internal Rate of Return is a way of determining the value of a project. It is simply the discount rate that makes the Future Value of a series of cash flows equal to the … Continue reading
Definition of Net Present Value Net Present Value is a way of determining the value of a project. It is simply the Present Value of a series of cash flows. Before we talk more about that, we should review the … Continue reading
Definition A barrier to entry as the name indicates is whatever factors that are in place that prevent some companies from entering an industry. The most common barrier to entry is cost. As mentioned in an earlier post, a company … Continue reading
Statement: Increased competition brings down consumer costs The statement is not necessarily true. What is true is that competition between suppliers will always apply downward pressure on consumer cost. In complete isolation, the statement is completely correct. However, in real life … Continue reading
Introduction Economically, a minimum wage is simply a price floor. The minimum wage employees are the suppliers of labor (they are selling their time) and the companies are the demanders of labor (they are buying that time). So we can … Continue reading
In Short Economics is the study of how people make decisions when in a state of scarcity. It is people choosing one option for another and the allocation of scarce resources. What is Scarcity? In life, people cannot get everything … Continue reading
What is the Forced Rider Problem? A forced rider is when someone is forced to pay for a good/service that they do not benefit from. The forced rider problem is that the good/service is thus overprovided. Assuming that other people don’t … Continue reading