Moral Suasion

Definition: A moral suasion is an influential approach through which the central bank appeals, advise, pressurize and convince the commercial banks from acting or refraining to act in a certain demeanour. It is often mistaken as a legal action however, it is just a persuasive move whereby general interaction is carried out. Being a combination […]

Demand-Pull Inflation

Definition: Demand-pull inflation is that form of inflation where an upsurge in consumer demand outperforms the supply of goods within the country. When the supply of the goods falls short to accommodate this outpaced demand, the cost of living upsurges, resulting in inflation. Demand-pull inflation affects the country on a macro-level by increasing the consumers’ […]

Paradox of Value

Definition: Paradox of value is a puzzle raised by Adam Smith who was one of the great economists in 1700s. Diamond-Water Paradox is defined as the difference between the value in use and the exchange value of any product. Smith questioned the enigma of a diamond being less useful than water, still, it has a […]

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