How Does the Government Make Money? The primary way that the United States government makes money is through taxation. In Section 8 of the first article of the Constitution, the U.S. Congress is afforded the right to assign and collect taxes. There are several sources of tax revenue. The breakdown of the federal government’s tax…
What is the National Average Wage Index (NAWI)? The National Average Wage Index (NAWI) is a benchmark used as a metric of inflation – tracking wage growth among American workers. The Social Security Administration (SSA) calculates the NAWI annually, using it for two primary purposes: To make updates to the Old Age, Survivors and Disability…
What is the Natural Gas Storage Indicator (EIA Report)? The Natural Gas Storage Indicator is an estimate of working gas in storage at both the national and regional levels, as reported by the U.S. Energy Information Administration (EIA). The EIA Weekly Natural Gas Storage Report is released at 10:30 a.m. EST on Thursday every week….
What is a Natural Hedge? A natural hedge refers to a strategy that reduces financial risks in the normal operation of an institution. It is typically done by investing in different assets and financial instruments with negative correlations among them. The conventional financial hedging strategy usually contains derivatives and forwards. The natural hedging strategy does…
What is the National Association of Real Estate Investment Trusts (NAREIT)? The National Association of Real Estate Investment Trusts – more commonly known as NAREIT – acts as the voice for equity and mortgage REITs, REITs traded on all major stock exchanges, as well as non-listed and private REITs. NAREIT’s primary focus is to act…
What is Virtual Currency? Virtual currency is a type of unregulated digital currency. It is not issued or controlled by a central bank. Examples of virtual currencies include Bitcoin, Litecoin, and XRP. Digital currencies are stored in and transacted through designated software, applications, and networks in digital form. Virtual currencies are typically issued by private…
What is the Economic Crash of 2020? The economic crash of 2020 was precipitated by the COVID-19 pandemic. The sudden appearance of the virus, its rapid spread, and uncertainty about how communicable and how lethal it might be sent financial markets and economies spiraling down worldwide. The Market Crash At the beginning of February, the…
What is Adverse Selection? Adverse selection refers to a scenario where either the buyer or the seller has information about an aspect of product quality that the other party does not have. Adverse selection is a common scenario in the insurance sector, where people in high-risk lifestyles or those engaged in dangerous jobs sign up…
What is Normal Distribution? The normal distribution is also referred to as Gaussian or Gauss distribution. The distribution is widely used in natural and social sciences. It is made relevant by the Central Limit Theorem, which states that the averages obtained from independent, identically distributed random variables tend to form normal distributions, regardless of the…
What are Point Estimators? Point estimators are functions that are used to find an approximate value of a population parameter from random samples of the population. They use the sample data of a population to calculate a point estimate or a statistic that serves as the best estimate of an unknown parameter of a population….
