Tag Archives: Micro-Economics

Tobin Tax

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 »

Liquidity Trap

A liquidity trap is when expansionary monetary policy (increase in money supply) does not increase the interest rate or income and hence does not stimulate economic growth. A Simple Explanation with Example. Picture a scenario called a “liquidity trap.” It’s a peculiar situation in the world of economics where the usual tricks of the trade… Read More »