Connect with us

Stock Market

Taco Bell menu brings back another fan favorite

Avatar

Published

on

number election result will make everyone is happy But democracy You must be respected Even when it comes to fast food menus.

More and more fast food companies are taking the democratic path and Hear the opinions of fans About what temporary upgrades should be permanent or which discontinued items should be returned.

10 days later online Vote campaign Above which menu item the retiree should appear again, Yum! Trademarks (yes) Proprietary Taco Bell announced that Inchirito beat the double-decker taco with 62% of the vote.

Advertisement



Source link

Continue Reading
Advertisement
Click to comment

Leave a Reply

Your email address will not be published.

Stock Market

What is the opportunity cost of financing? Definition, formula and significance

Avatar

Published

on

In a financial sense, the opportunity cost of one decision is the financial return of its best alternative.

What is the opportunity cost?

As individuals, we make countless choices every day. We decide what we wear to work, where we have lunch, who we see socially with, and what we do in our spare time. Due to factors such as time and money, many of these options are mutually exclusive, which means that once we choose a particular option, we lose out on the opportunity to choose the alternative.



Source link

Continue Reading

Stock Market

Larger protests are under control at Foxconn’s main iPhone factory in China

Avatar

Published

on


© Reuters. FILE PHOTO: The Foxconn logo is visible on a glass door of its office building in Taipei, Taiwan, November 12, 2020. REUTERS/Ann Wang

TAIPEI (Reuters) – Larger protests at Foxconn’s main iPhone factory in China were under control, a source said on Thursday, and the company continued to communicate with employees involved in smaller protests.

Footage uploaded to social media showed hundreds of workers joining protests at China’s main iPhone factory Zhengzhou this week, with some men smashing security cameras and windows.

Source link

Advertisement
Continue Reading

Stock Market

What is money supply? Definition and historical examples

Avatar

Published

on

The Federal Reserve can increase the supply of money in circulation by purchasing government securities.

What is money supply?

The money supply represents the total amount of money in circulation, including cash, coins, account balances held in banks, and money that cannot be quickly converted into cash. Since the collapse Bretton Woods system In the 1970s and the abandonment of the gold standard, the US dollar and the currencies of many countries became fiat currencies (currency issued by the government not tied to a commodity), and more money was put into circulation.

Who controls the money supply?

A country’s central bank usually controls the money supply. in the United States , Federal Reserve He supervises a part of money known as the monetary base, which it forms balance sheet.

Advertisement

What are the types of money supply?

Money in circulation in the form of a cash base represents the most liquid assets. But there are other types of money held in different types of accounts which cannot be quickly converted into cash, and they are categorized as M1 and M2.

monetary base

The monetary base represents the currency in circulation and deposit balances held by depository institutions with the Federal Reserve. The Federal Reserve increases or decreases the monetary base by buying or selling securities in the open market.

For example, the Federal Reserve buys US bonds with a check deposited at a bank that has an account with the Federal Reserve. The amount on the check adds to the Federal Reserve reserves, and this increases the monetary base. The monetary base decreases when the Fed sells bonds and receives a bank check. When this check is deposited, the bank’s balance with the Federal Reserve decreases.

The monetary base, often referred to as M0, serves as the Federal Reserve’s balance sheet.

m 1

M1 is a broader version of the money supply. They include base cash and other types of money, namely checkable – or demand – deposits and traveler’s checks. However, demand deposits and travelers checks require time to convert into cash, and they are not as easy to monetize as currency and coins.

Advertisement

m 2

M2 consists of M1 plus savings deposits, time deposits and money market funds for individuals. Term deposits are usually in amounts less than $100,000.

m 3

M3 includes M2 but has broader measures of money supply, including institutional money market mutual funds and repurchase agreements. The Fed stopped publishing data about M3 in 2006, saying that M3 provided little additional information on economic activity than M2 did, and that it no longer played a role in making a decision about Monetary policy.

How does the cash supply work?

There are various ways in which the amount of money circulating in an economy can change.

The money supply can increase when banks take deposits and use some of the deposits as loans. This is also known as fractional lending.

One way the Federal Reserve can quickly increase the money supply is by purchasing government securities issued by the US Treasury. The securities purchased can sometimes be worth tens of billions of dollars, injecting large amounts of cash into the financial system.

Advertisement

For example, when the Fed decides to buy $1 billion in 10-year bonds from a bank that is a primary dealer, funds are essentially created, and $1 billion is transferred to the bank’s reserve account. However, this amount of money is recorded on the Federal Reserve’s balance sheet.

Example: the financial crisis of 2007-2008

distance The financial crisis of 2007-2008To keep the financial system afloat and to prevent the economy from collapsing, the Fed embarked on a purchasing program known as Quantitative easing (QE). As shown in the charts below, the monetary base increased from about $850 billion before QE in August 2008 to $6.4 trillion after QE in December 2021 – a 7.5-fold increase and the largest expansion of money in US history.

M1 and M2 – the broader categories of money supply – exceed $20 trillion in 2021. To reduce the money supply, the Federal Reserve can buy back those securities, in what is known as quantitative tightening.

Graph showing the increase in the monetary base from 1959 to 2022.

The period following the financial crisis of 2007-2008 saw the largest creation of dollars in US history.

Graph showing the increase of M1 and M2 from 1959 to 2022.

M1 and M2 are two broader money supply categories, each of which exceeded $20 trillion in 2021.

Advertisement

Example: Lessons from Big disappointment

The Federal Reserve learned from its mistakes during the Great Depression when money was not circulating in the financial system. Banks collapsed because of their exposure to the stock market, and there was no federal guarantee on deposits. Account holders suddenly saw their wealth disappear, and the amount of money in circulation decreased.

With the money supply declining, economic growth falters, The unemployment rose, contraction occurred, Industrial production The value of the dollar fell. It was also difficult to access credit, which made it difficult for companies to invest and spend for many Americans.

The Federal Reserve failed to rescue the ailing economy by not increasing the money supply through open market operations and not trying to prevent banks from collapsing. The central bank avoided making the same mistake in the aftermath of the 2007-2008 financial crisis by increasing the money supply through quantitative easing.

Questions and answers (FAQ)

Here are answers to some of the most common questions investors ask about the money supply.

How does the money supply affect the economy and inflation?

When more money is injected into the financial system, spending is stimulated, which in turn can boost the economy. However, too much money getting into the system too quickly can cause this to happen inflation To speed up.

Advertisement

What is not included in the money supply?

The foreign currency in the hands of the people is not part of the nation’s money supply. In fact, countries usually only monitor their own currency. Gold stored as bullion in bank vaults is also not counted as part of the money supply, but minted gold coins are.



Source link

Continue Reading
Advertisement

Trending