Simple Definitions That You Need to Know with ValueMags
With more and more requests for business and finance related magazines coming in, ValueMags is beginning to realize that their magazines readers want to have access to low-cost magazines that are educational. Educating the population is therefore one of ValueMags newest initiatives. The magazine distribution and marketing agency is looking to invest in and partner with publishers that write business and finance magazines now. ValueMags did a little more research and found that the majority of North Americans that listen to the news do not know what is going on in the economy. They lack the knowledge of simple definitions that could make them understand current realities a whole lot better. Here are a couple of simple definitions provided by ValueMags researching departments:
- Anticipated inflation: the rate of inflation that individuals believe will happen in the future.
- Unanticipated inflation: the rate of inflation that differentiates for the expectation (can have an adverse economic impact). Inflation matters because the purchasing power of money is negatively related to the price levels and it is hard to forecast inflation accurately which adds the uncertainty of economic life.
- What is COLA (cost of living adjustment): an automatic increase in wage rates to take into account the increase in price levels (about 2% per year). This is to preserve the purchasing power of the working population.
It is additionally important says ValueMags researchers, that citizens understand that is happening with their investments when inflation rises. Some of the causes o inflation include: demand pull inflation (emanated from the demand or aggregate demand – expansionary fiscal policy to increase disposable income of the population) and cost push inflation (emanates from the supply or rise in prices of inputs – rise in the cost of production (cost per unit)).
Interest rates have a strong correlation with inflation. These are also prices that individuals do not pay attention to. When most go buy a home or insurance, they do not understand the composition of the interest rats that go along with them. Some more necessary definitions include:
- Interest rate: the price of borrowing funds – the percentage amount per period established
- Nominal interest rates: expressed in money terms with current prices
- Real interest rates: expressed in terms of purchasing power with base-year prices
For more information regarding financial basics and the necessary tools to understanding the essentials of economics for business, stay tuned for ValueMags partnerships and new business and finance magazines on the ValueMags official website.