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The production possibilities frontier (PPF) for guns versus butter. Points like X that are outside the PPF are impossible to achieve. Points such as B, C, and D illustrate the trade-off between guns and butter: at these levels of production, producing more of one requires producing less of the other. Points located along the PPF curve represent ...
In the United States the unofficial beginning and ending dates of national economic expansions have been defined by an American private non-profit research organization known as the National Bureau of Economic Research (NBER). The NBER defines an expansion as a period when economic activity rises substantially, spreads across the economy, and ...
A banking panic and a collapse in the money supply took place in the United States that was exacerbated by international commitment to the gold standard. [53] [54] [55] Extensive new tariffs and other factors contributed to an extremely deep depression. [56] GDP, industrial production, employment, and prices fell substantially.
The main prewar agricultural products of the Confederate States were cotton, tobacco, and sugarcane, with hogs, cattle, grain and vegetable plots. Pre-war agricultural production estimated for the Southern states is as follows (Union states in parentheses for comparison): 1.7 million horses (3.4 million), 800,000 mules (100,000), 2.7 million dairy cows (5 million), 5 million sheep (14 million ...
The Bank of the United States also contracted its lending. The price of agricultural commodities fell by almost 50 percent from the high in 1815 to the low in 1821. These commodities' prices did not recover until the late 1830s, although to a significantly lower price level. Most damaging was the price of cotton: the U.S.'s main export.
Wicksell's theory did not produce a direct relationship between the quantity of money and price level. According to Wicksell, money would be created endogenously, without an increase in quantity of hard currency, as long as the natural exceeded the market interest rate . In these conditions, borrowers turn a profit and deposit cash into bank ...
Basic economics also teaches that the money supply shrinks when loans are repaid; [13] [14] however, the money supply will not necessarily decrease depending on the creation of new loans and other effects. Other than loans, investment activities of commercial banks and the Federal Reserve also increase and decrease the money supply. [15]
For many years following the Great Depression of the 1930s, when the danger of recession appeared most serious, the government strengthened the economy by spending heavily itself or cutting taxes so that consumers would spend more and by fostering rapid growth in the money supply, which also encouraged more spending. Ideas about the best tools ...