The term blue chip stock originates from the card game poker, where different colors of chips are used to represent different dollar amounts. In the game of poker, the blue-chip surpasses the red and white chips and is usually the one with the highest value of all. In 1923, the blue-chip concept was first used … Read more
The features of capitalism are the distinctive attributes observed in capitalist countries. They are also known as the characteristics of capitalism. These features distinguish capitalism from other economic systems like socialism and feudalism. Definition of capitalism Capitalism is a type of free market economy where private individuals own and control the means of production with … Read more
Ordoliberalism definition Ordoliberalism is a political and economic theory that emphasizes a free market economy with government interference only for protecting the market from monopoly. It accepts some aspects of laissez-faire economics but permits government interference only for protecting the market. It is opposed to communism, socialism, and other forms of government control over the … Read more
Fordism definition Fordism is a production system in which workers are organized into large, hierarchical teams that carry out specific tasks. Under this system, the workers are tightly controlled by their supervisors and are required to follow a set schedule. The term Fordism was widely used to describe the way that Ford companies operate. Henry … Read more
Definition of Dirigisme Also known as Dirigism; the French word dirigisme, meaning “management of the economy” was introduced in the 1930s. The theory of dirigisme is based on the idea that a country’s economic stability and growth can be improved by having a government manage the economy directly. Dirigisme is not limited to France or … Read more
Value stocks are those types of stocks that trade at a lower price than what the company’s performance may indicate. Because, the price of the stock may not match the performance of the company, value investors attempt to capitalize on inefficiencies in the market. They look for inefficiencies in the market that make the stocks … Read more
The concept of absolute advantage has been used throughout history to justify the privileges of certain countries or businesses. For example, during the Industrial Revolution, England was said to have an advantage over other countries because of its abundant natural resources. Today, absolute cost advantage is still used to explain why some countries or businesses … Read more
Comparative advantage examples When we think about comparative advantage, we might think of it as a way for two different countries to benefit from their differences. For example, France might have a comparative advantage in wine production because they have good soil and the right climate, while Germany has a comparative advantage in automobile manufacturing … Read more
Laissez faire capitalism is characterized by the absence of government intervention in the economy ( even government subsidies are not allowed by this economic system); it is also known as unregulated capitalism. The invisible hand of the market (demand and supply) should be allowed to determine how to run the economy. It is a good … Read more
The enterprise value multiples formulas are some of the valuation multiples in finance. They are often used in the valuation analysis of a company to determine whether the shares are over or undervalued. They are some of the most accurate methods of analyzing a company and determining the value of the shares in order to … Read more
