In this article we will discuss about:- 1. What is Market Mechanism 2. Efficiency under Market Mechanism 3. Examples 4. Graphs. What is Market Mechanism: Market mechanism is often interpreted as a 'free' market system. For a layman 'free' means that when you go to a market, there is no restriction - you can buy as much as you want [...]
Interest rate parity is the result of arbitrage in financial markets. If US bonds and UK bonds are similar in every respect the currency used to pay the principal and interest, then they should yield similar returns to bondholders. If US investors can earn a higher return from UK bonds, they are going to buy more UK bonds and fewer [...]
The following article will guide you to learn about how does a market system work. Let us take a few examples to show how such a system might work. We can start with an increase in demand. Assume that there is an increase in the birth rate in India. Other things being equal, this will mean that producers of products [...]