Economix-101

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Microfinance !!?

Poverty is one of the difficult challenges that face world economies around the globe with more than 3 billion people who live on less than $2.50 a day. More than 1.3 billion live in extreme poverty and less than $1.25 a day, numbers can say it all. However, regardless of all the difficulties involved in this situation, a light at the end of the tunnel exists. Prior to the establishment of its sound regulation and experiments in 1970’s by the Grameen Bank founded by Mohammad, Yunus microfinance saw the light and proved its abilities to elevate a large scale of people from poverty. Microfinance represented a mechanism of lending credit designed specifically to the world’s unprivileged populations and a variety services that can of a beneficial outcome. Today, this industry faces every day a new challenge from regulation and policies to commercialization and communication. Microfinance was a form of a voluntary help when first started in th

Commercial Banks in the US

Commercial Banks in the US between History and Financial Implications T he rapid growth of a country in its various sectors of the economy is positively correlated to the sound and effective role of the banking system of that country. Commercial banks nonetheless play an active and essential role in the economic development of the country. The significance of the commercial banks in the economic development is derived from its visible influence on the money supply and the rate of investments within the economy. Commercial Banks is defined as a bank that offers services to the general public and to companies. According to Prof. Kinley, “A bank is an establishment which makes to individuals such advances of money as may be required and safely made, and to which individuals entrust money when not required by them for use.” These institutions gained this name primarily in the US to merely get distinguished from the investment banks, however, and through the years this latter

UNEMPLOYMENT!!!

Introduction A job loss means a lower living standard in the present, anxiety about the future, and reduced self-esteem. A country that saves and invests a high fraction of its income enjoys more rapid growth in its capital stock and its GDP and a higher living standard. An even more obvious determinant of a country’s standard of living is the amount of unemployment it typically experiences. When a country keeps its workers as fully employed as possible, it achieves a higher level of GDP. The problem of unemployment is usefully divided into two categories—the long-run problem and the short-run problem. The economy’s natural rate of unemployment refers to the amount of unemployment that the economy normally experiences. The designation natural does not imply that this rate of unemployment is desirable. Nor does it imply that it is constant over time. It merely means that this unemployment does not go away on its own even in the long-run. C ycl

SAVING , INVESTMENT AND THE FINANCIAL SYSTEM

Introduction Investment is financed by saving. There are various ways to finance capital investments: Borrow the money, from a bank or from a friend or relative.Alternatively, convince someone to provide the money in exchange for a share of future profits. Use own savings. In all cases, investment is financed by someone else’s saving . The financial system consists of those institutions in the economy that helps to match one person’s saving with another person’s investment. FINANCIAL INSTITUTIONS The financial system moves the economy’s scarce resources from savers (people who spend less than they earn) to borrowers (people who spend more than they earn). Savers supply their money to the financial system with the expectation that they will get it back with interest at a later date. Borrowers demand money from the financial system with the knowledge that they will be required to pay it back with interest at a later date. The financia

PRODUCTION AND GROWTH

Introduction The average person in a rich country has an income more than ten times as high as the average person in a poor country. Large differences in income are reflected in large differences in the quality of life (better nutrition, better health care, and longer life expectancy). Even within a country, there are large changes in the standard of living over time. A growth rate of GDP per person by 2% (7%) per year implies that average income doubles every 35 (10) years. Growth: 1% 2% 3% 4% 5% 6% 7% Time: 70 35 23 18 14 12 10 Growth rates vary substantially from country to country. In some East Asian countries (Singapore, S K, China), average income has risen about 7% per year. Average income doubles every 10 years. These countries have, in the length of one generation, gone from being among the poorest in the world to being among the richest. By contrast, in some African countries, average income has been stagnan