Archives: Terms

Definition of Mutual Fund Separation Theorem The Mutual Fund Separation Theorem is a financial theory suggesting that an investor’s decision on how to allocate their investments between risky and risk-free assets can be separated from their choice of risky assets. In essence, it posits that any investor can achieve optimal […]

Definition of Mutual Fund A mutual fund is a type of investment vehicle consisting of a portfolio of stocks, bonds, or other securities, which is managed by a professional investment company. It pools money from many investors to purchase a diversified portfolio of securities. This allows individual investors access to […]

Definition of Mundell–Fleming Model The Mundell–Fleming model is a fundamental economic theory that describes the relationship between a country’s exchange rate, interest rate, and its economic output in the context of a small open economy with perfect capital mobility. It extends the Keynesian model of aggregate demand to the international […]

### Title: Multiplier Effect and Uncertainty Definition of Multiplier Effect The multiplier effect is a fundamental concept in economics that describes how an initial investment or spending in the economy can lead to a larger increase in total output, income, and expenditure. This effect occurs because the initial spending creates […]

Definition of Moving Equilibrium Theorem The Moving Equilibrium Theorem is a concept in economics that recognizes the continuous change in the equilibrium point of a market due to shifts in demand and supply over time. Contrary to the static analysis, which considers equilibrium at a single point in time, the […]

### **Title: Mortgage** Definition of Mortgage A mortgage is a legal agreement by which a bank, a mortgage lender, or other financial institution lends money at interest in exchange for taking the title of the borrower’s property. The borrower agrees to pay back the borrowed amount, plus interest, over a […]

Definition of MONIAC The Monetary National Income Analogue Computer (MONIAC), also known as the Phillips Hydraulic Computer, is a unique economic model and early analog computer created by New Zealand economist Bill Phillips. Developed in 1949, the MONIAC used fluid dynamics to simulate the workings of an economy, providing a […]

Definition of Monetary System A monetary system is the set of institutions and mechanisms by which a country manages its money supply, including the minting and distribution of coinage and the printing of notes, but also more broadly involving the regulation of credit instruments, banking, and financial markets. This system […]

Definition of Monetary Reform Monetary reform refers to a process of changing the current monetary system to address issues like inflation, currency depreciation, and to improve economic stability and efficiency. It encompasses a broad range of measures including the overhaul of the currency system, adjustment of interest rates, regulatory changes […]

The Monetary/Fiscal Policy Debate The monetary/fiscal policy debate centers around the most effective method for managing an economy—whether through monetary policy, which involves the management of interest rates and the total supply of money by the central bank (or a monetary authority), or through fiscal policy, which refers to government […]