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Under normal circumstances, when there is an increase in the money supply the interest rate should decrase because money is more abundant hence the cost of borrowing is low. In a liquidity trap the int...

Monetarists believe that prices and money wages are flexible and can adjust quickly, meaning that the real wage is at the right level to achieve long run equilibrium in the labour market. All unemployment...

The Gini Coefficient measures the area between the Lorenz curve and the line of absoluate equality in an economy. The bigger the Gini Coefficient, the greater the inequality in a single country. Fiscal po...

The Phillips curve shows the inverse relationship between unemployment a...

Economies of scale and scope

The concept of economies of scale were introduced by Adam Smith as a part of his famous works on division of labour. The main idea behind i...