How do fundamental and quantitative analysis differ? In fundamental analysis managers analyze the unique aspects of a firm. For example‚ a manager doing fundamental analysis on Microsoft would study Microsoft’s new products‚ understand Microsoft’s profit margins‚ threats from specific competitors‚ etc. You use this information to forecast the future cash flows of Microsoft to estimate the fundamental value of Microsoft. In quantitative analysis you do not analyze a specific firm. Instead‚ you
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methods to influence the money supply in the United States. Their tools are: open market operations‚ discount lending and the reserve requirement but open market operations are the most essential to the control of the monetary policy. An open market purchase increases not only the monetary base but also the money supply. This in turn lowers short-term interest rates. To accomplish this expansion of the open market the Federal Reserve typically purchases Treasury securities for two reasons. These investments
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Fiscal and Monetary policy. Fiscal policy is used to determine the appropriate level of spending and taxes‚ whereas monetary policy manages the supply of money in the economy. When the economy enters a recession‚ governments stimulate it with deficit spending‚ whereas during an economic growth governments control it with higher taxes to achieve a surplus. These policies are based on the concepts of British economist John Maynard Keynes (1883-1946). Consumers mainly influence fiscal policy by their
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governors and the governor‚ is the policymaking body comparable to the FOMC that makes decisions about monetary policy. The Bank Act was amended in 1967 to give the ultimate responsibility for monetary policy to the government. So on paper‚ the Bank of Canada is not as instrumentindependent as the Federal Reserve. In practice‚ however‚ the Bank of Canada does essentially control monetary policy. In the event of a disagreement between the bank and the government‚ the minister of finance can issue
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2 How does a change in taxes primarily affect aggregate demand? A tax change alters disposable income and consumption spending. Contractionary fiscal policy consists of: decreased government purchases‚ increased taxes‚ decreased transfer payments. Which of the following measures is associated with an expansionary fiscal policy? lowering taxes __________ refers to a chain reaction of additional income and purchases that results in total purchases that are greater than the initial
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com/od/fiscalpolicy/p/deficit.htm Case K.‚ Fair R.‚ & Oster S. (2009) Principles of Macroeconomics. Upper Saddle River‚ New Jersey: Pearson Prentice Hall. Pettinger‚ Teivan. (2010). Monetary Policy vs. Fiscal Policy. Retrieved from http://www.economicshelp.org/blog/2253/economics/monetary-policy-vs-fiscal-policy/
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in Greece‚ its short-comings‚ and how I would remedy the situation if I were in charge. I state that the main problem is Greece’s austerity policy that the government has been enforcing due to the countries large debt burden. I suggest that the country should enact an expansionary fiscal policy to dig them out of recession‚ and I explain how this type of policy would benefit Greece given their situation. The Greek economy is currently in the middle of a depression of the same magnitude of the Great
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The European Central Bank (ECB) is a part of the attempt at European Monetary Union (EMU) and is the single locus of the European System Central Banks (ESCB)‚ which has been formed from the voluntary union of national central banks‚ and the ECB itself. The National banks‚ like the Bundesbank‚ have however not been abolished. They merely become operating arms of the ECB. The ECB assumes responsibility for EU monetary policies‚ but it is the Council of Ministers and the not the ECB which is empowered
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Parkin and Bade’s text "Economics" gives the following definition of the business cycle: The business cycle is the periodic but irregular up-and-down movements in economic activity‚ measured by fluctuations in real GDP and other macroeconomic variables. If you’re looking for information on how various economic indicators and their relationship to the business cycle‚ please see A Beginner’s Guide to Economic Indicators. Parkin and Bade go on to explain: A business cycle is not a regular‚ predictable
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Demand-Side vs. Supply-Side Economics Demand-Side vs. Supply-Side Economics Ever since the 1980s when President Ronald Reagan implemented a form of economic fiscal policy known as supply-side economics‚ there has been a continuing debate over whether a supply-side fiscal economic agenda or a more demand-side‚ Keynesian fiscal economic policy is more effective in promoting short and long-term real GDP growth. Like any analysis in economics‚ there are many variables at work in the economy‚ however the
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