Carmelle The profitability index (PI) rule is a basic guideline for making investment decisions. It states that the NPV of an investment should be positive in order for it to be accepted. In other words, an investment should only be accepted if it is expected to generate a positive return. The PI rule is a simple … Read more
. The Velocity of Money: Definition and Examples What is money supply formula? M = C + B M is the money supply, C is the amount of currency in circulation, and B is the amount of commercial bank deposits. What is M2 money velocity? M2 money velocity is a measure of the rate at … Read more
What is a liquidity trap? A liquidity trap is when people are holding onto cash because they believe that it will be worth more in the future. This can happen for a variety of reasons, but typically happens when there is high inflation or when the economy is in a recession. What is liquidity with … Read more
