Help! Questions about the economy from a beginner.
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Archived from the IMDb Discussion Forums — Economics, Business, Money, Finance
TomCave — 17 years ago(November 08, 2008 05:34 AM)
Hi.
I am quite young, very uneducated on finance and economics but also very interested. So.. could someone please explain (or post some links) what the 'Economy' is. When is it high, when is it low, how do 'we' (citizens) control it, what is the problem right now in America, how can it be fixed, how does the economy become strong or weak, what does Wall Street have to do with anything, how is the Federal Reserve Bank involved, what is the Australian equivalent of the Federal Reserve Bank etc.?
Thanks in advance. -
nakedsteve — 17 years ago(November 08, 2008 06:34 AM)
start here.
http://en.wikipedia.org/wiki/EconomicS
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Dances with Werewolves — 17 years ago(November 21, 2008 12:01 PM)
I am not an economist, so I am putting this into the layman's terms that I understand:
The economy is the system by which people exchange that which they have for that which they want or need. Originally, this was done through bartering. Then we used precious metals (gold, silver, etc.) as a form of money, since people could agree upon the value of these metals. Then we used paper bills that represented a certain amount of those precious metals. Now we use paper bills that are fiat currency, with no inherent value other than that which people believe that they have.
When you speak of highs and lows, you are talking about the stock market, which is, not surprisingly, a market where stocks are traded. The points attributed to the stock market are basically the aggregate values at which the stocks of the respective companies are trading.
Wall Street is also known as the Financial District, where several major stock exchanges (NYSE, NASDAQ and AMEX come to mind; not sure of others) are headquartered.
The Federal Reserve Bank is well, that's complicated. It's the central banking system of the U.S., a private entity created by government to control the currency supply. The purpose was to enhance "elasticity and liquidity", which seems to me to be code for "We want to inflate, or deflate, currency as we need to in order to fund operations when we have no other available source."
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