The Capital Adequacy Ratio (CAR) is a vital metric used to gauge banks’ resilience in absorbing losses and their capacity to manage liabilities and address credit and operational risks. Regulators employ it to evaluate a bank’s resilience to losses. A higher CAR signifies greater capacity to endure losses, translating to lower risk for the bank.… Read More »
Purchasing Power Parity (PPP) serves as a method to gauge the relative purchasing power of various currencies. It involves comparing the prices of a standard basket of goods and services in different countries. PPP finds its utility in assessing and comparing the standard of living between nations and adjusting economic data to account for price-level… Read More »
Tobin tax is basically a tax that is levied on the short term currency transactions in order to discourage the volatility and speculation. It’s like a small fee proposed for certain financial transactions, especially those involving different currencies. A tool used in finance to keep a check on a country’s currency stability. People also call… Read More »
The Laffer Curve is a theory to show the relationship between tax rates and the amount of tax revenue collected by governments. A Brief Explanation A curve named after economist Arthur Laffer, which reveals a fascinating principle about taxes. When tax rates are lowered, it can supercharge economic growth. How does this work? Well, let’s… Read More »