What is the Home Market Effect? The home market effect is a trade theory that argues that countries that exhibit higher demand for some products locally tend to record higher sales of the same products in foreign markets. The home market effect hypothesis was first hypothesized by Stephan Linda (1961) and later formalized by Paul…
What are Monetary Aggregates? Monetary aggregates are measures of the money stock in a country. Central banks measure money aggregates and present them in the form of end-of-month national currency stock series. In the U.S., monetary aggregates are conventionally labeled as M0, M1, M2, and M3. The categories come with different definitions, as follows: M0: The sum of…
What Does Monetize Mean? The word “monetize” is used to refer to the process of converting an item into cash. In the banking sector, monetize may be used to mean the process of turning an asset into legal tender. It can also be used informally to mean the exchange of possession for a cash equivalent…
What is Money? Money refers to any verifiable record that is accepted as a medium of exchange for payment of goods and services and repayment of debts in a specific country. Throughout history, governments adopted different forms of money, such as gold, silver, coins, and banknotes. The value of money is not necessarily derived from…
What is Money Flow? Money flow is a technical indicator used to assess the future movement of prices based on demand and supply. It is used to construct the difference between uptick and downtick dollar trading volume. Money flow, whether flowing in or out, indicates the current excess supply or demand. Traders determine whether the…
What is a Home Mortgage Interest Deduction? A home mortgage interest deduction is an itemized deduction that allows homeowners to deduct any interest on loans that are used to build, improve, or purchase their primary residence, and sometimes, second homes. Taxpayers are required to itemize their deductible mortgage interest on Form 1040 to claim mortgage…
What is a Home Office Expense? A home office expense refers to the costs incurred through the performance of business activities within a primary residence. When work performed in the home office produces outside income, the Internal Revenue Service allows business owners to make a tax deduction from the annual tax return if they meet…
What is a Home Warranty? A home warranty is a contract provided to the homeowner covering repairs and replacement services for a certain period of time. Home warranty requires a house buyer to comply with the maintenance schedule verified by periodic inspection from the contract’s date. It can be compared to a home insurance contract,…
What is a Home Equity Loan? A home equity loan is a type of consumer borrowing that allows homeowners to borrow and use personal equity in residential property as collateral. Such a type of loan is also known as a second mortgage or home equity installment. The loan amount is determined by the current market…
What is Hollowing Out? Hollowing out is a phrase used to describe conditions and trends in the economies of developed nations that are the result of many middle-class, blue-collar manufacturing jobs being outsourced to developing countries. The outsourcing, or “offshoring,” of both manufacturing and low-level service jobs, is considered one of the predominant trends in…
