Financial Reform

Fractional reserve banking is a banking system where banks are required to hold only a fraction of their customers’ deposits as reserves. This allows banks to lend out the remaining deposits to borrowers, creating new money in the economy. Key Facts Definition: Fractional reserve banking is a system in which…

Number of Free Trade Agreements The United States has comprehensive free trade agreements in force with 20 countries. These agreements cover various aspects of trade, including the reduction or elimination of tariffs, the promotion of fair competition, and the protection of intellectual property rights. Benefits for U.S. Companies Free trade…

Two-factor authentication (2FA), also known as two-step verification, is a security measure that adds an extra layer of protection to online accounts. By requiring two forms of identification, 2FA makes it more challenging for unauthorized individuals to access accounts even if they have obtained a user’s password. Key Facts Google…

The New Economic Policy (NEP) was an economic policy implemented by the Soviet Union from 1921 to 1928. It was introduced by Vladimir Lenin as a temporary measure to revive the country’s economy, which had been severely damaged by the Russian Civil War and the policies of War Communism. Key…

Institutions are the rules and norms that shape human behavior and economic activity. They can be formal, such as laws and regulations, or informal, such as customs and traditions. Institutions play a critical role in economic growth by providing a framework for economic activity, reducing uncertainty, and facilitating cooperation. Key…

China resisted western influences by declaring wars toward foreign countries. The Opium War between China and Britain was caused by Britain’s ignoring China’s warnings and keeping smuggling opium into China. China lost the war because the technologies of Great Britain were more advanced. How did China resist European influence? Chinese…

Command Economies: Countries and Characteristics A command economy is an economic system in which the government or a central authority controls the production, distribution, and pricing of goods and services. In contrast to free market economies, where supply and demand determine prices, command economies prioritize macroeconomic objectives and political considerations.…

Government deregulation refers to the process of removing or reducing state regulations, typically in the economic sphere. It involves repealing governmental regulations that control and restrict various aspects of the economy. Key Facts Definition: Government deregulation is the process of removing or reducing state regulations, typically in the economic sphere.…

Market failure and government failure are two distinct concepts that can both lead to inefficiencies in the allocation of resources and a loss of economic and social welfare. Key Facts Market Failure: Market failure occurs when the free market fails to allocate resources efficiently, resulting in an inefficient allocation of…

How the FTC Promotes Competition The Federal Trade Commission (FTC) is an independent agency of the United States government that promotes competition and protects consumers. The FTC enforces the nation’s antitrust laws, which are designed to prevent anticompetitive behavior and promote fair competition (FTC, 2023). Enforcing Antitrust Laws The FTC’s…

Centrally Planned Economy: Definition and Characteristics A centrally planned economy is an economic system where the government, or a central authority, makes critical economic decisions regarding the production, distribution, and allocation of goods and services. This contrasts with market economies, where these decisions are largely determined by the interactions of…

Unbundling procedural codes refers to the practice of submitting separate Current Procedural Terminology (CPT) codes for each distinct component of a procedure, rather than using a single code that encompasses the entire procedure. This practice is often employed by healthcare providers in an attempt to maximize reimbursement by billing for…

Consumer sovereignty is a fundamental concept in economics that emphasizes the power of consumers to influence the production and distribution of goods and services. It recognizes that consumers are the ultimate arbiters of their own well-being and that their preferences should guide economic decision-making. This article explores the importance of…

Economic Integration: A Comprehensive Overview Definition and Objectives Economic integration is the unification of economic policies between different states or regions. It involves the partial or full abolition of tariff and non-tariff restrictions on trade (Investopedia, 2023). The primary objective of economic integration is to stimulate trade and increase economic…

Reduced Inequality In a planned economy, the government plays an active role in reducing income inequality by ensuring a fair distribution of resources and opportunities. This can be achieved through progressive taxation, social welfare programs, and policies that promote equal access to education, healthcare, and housing. Key Facts Reduced Inequality:…

A free market economy is an economic system characterized by voluntary exchange, limited government intervention, private ownership, competition, and consumer-driven forces. It operates based on the following principles: Key Facts Voluntary Exchange: In a free market economy, transactions between buyers and sellers are based on voluntary exchange, where both parties…

Banks are financial institutions that accept deposits, make loans, and provide other financial services. There are many different types of banks, each with its own unique set of services and offerings. Key Facts Commercial Banks: These are the most common type of banks that provide a wide range of services…

Value added is a measure of the value generated by producing goods and services. It is calculated as the value of output minus the value of intermediate goods and services consumed in production, before accounting for consumption of fixed capital in production. Key Facts Definition: Value added is the value…