# All Questions

7,220 questions
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### Can the USA really change their exchange rate?

I'm reading Martin Wolf's book The Shifts And The Shocks, about the global crisis. In it, there's a section where the author claims that the USA cannot not have an exchange rate policy, since all the ...
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### Mathematical economic

I feel difficulty in tracing the trajectoy of increased money supply, when plotting the phase diagram. Also my dy•/dy >0 which means unstable model , however my dy•/dy <0 which means model is ...
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### Outline the costs and benefits for consumers and producers in the statement below [on hold]

Q: A rent ceiling price of \$500 per month is imposed in a market where equilibrium rent would otherwise be \$650.
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### For a normal good, is the Slutsky compensated demand curve flatter than the Hicksian compensated demand curve, or is it steeper?

Please explain with a diagram, showing both, the effect of increase and a decrease in price of the normal good, and the resulting changes in demand under the Hicksian and Slutsky compensated demand ...
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### Data Set of Bourguignon and Morrison 2002 AER

This question is about the following paper: F. Bourguignon and C. Morrison "Inequality among World Citizens: 1820-1992", American Economic Review, Vol. 92, No. 4. (Sep., 2002), pp. 727-744. On p.730,...
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### Unsure how to go about computing GDP for the following problem

I came across this question where the GDP for the years 1995-1997 is given. Then I was asked to compute the growth rate every year which I'm aware of.The next question was to compute the average which ...
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### Econometrics - help

Need help with Econometrics question using STATA or R. PLEASE SHOW THE COMMANDS THAT YOU USED AND THE OUTPUT. . The basic model you are interested in is the following extended Mincerian earnings ...
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### the competitive equilibrium for the Ramsey commodity taxation

I am trying to drive the competitive equilibrium for Ramsey commodity taxation that max the social welfare of skilled(pi) and unskilled(1-pi) workers subject to the feasibility constraint and the ...
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### Producer's optimization problem

I am trying to solve the firms' profit maximization problem. I am wondering whether this is the right way to solve the problem.
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### Lagrangian Optimization problem

Is this correct way to solve the Lagrangian optimization problem where MRS is not equal to MRT?
128 views

### Showing marginal product of capital is independent of the scale of production

The image is pretty much self-explanatory. To add some context, I'm learning Solow-Swan Growth Theory and my professor said that the marginal product will not change if both capital and labor increase ...
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### What's a « 1-Ratio» ? From a text on Capital's share of GDP

In this article, the writer talks about the «capital share, as a percent of GDP — here just 1 – labor share percentage» What's this 1-labour share percentage?
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### Where relative wages settle in the Ricardian model

Given that an example Home country is 6 times more productive in the production of good A, and 1.5 times more productive in producing good B. Why then, does the home wage relative to foreign wage ...
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### Relationship between private transactions and central banks' interventions

I read that as an accounting identity, the current account balance (CA), the (narrowly defined) capital account balance (KA) and the official settlements account balance (OSB) must sum up to zero. ...
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### When is cost of capital useful as hurdle rate?

Suppose we have an all-equity firm and no tax is assumed. The firm has two divisions, each division generating a growing perpetuity. Assume beta of each division, market risk premium, and risk free ...
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### Obtain F(L,K) given F(L*,K*), K* and L*

The question is, given the optimal production function to maximize profit F(L*,K*)=p/w , and the optimal demands of capital and labour K*=0, L*=(p^2)/(2w^2), retrieve the original production function ...
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### Form of excess demand correspondence

Consider a pure exchange economy with L goods and I consumers. Suppose the utility function is quasiconcave rather than strictly concave, and therefore, the solution to the consumer's utility ...
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### Solve consumer’s problem [on hold]

Suppose a consumer consumes three goods, his utility function is given by $$u=min\{x+y,x+z\}$$ Solve the consumer’s problem i.e. find the optimal consumption bundle. No other information is given in ...
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### why is I included as part of GDP?

GDP = C + I + G + (X-M) If GDP is supposed to count only final goods and services, why include I? Eg if build public roads, can count as G; if build factory, can count when factory produces goods and ...
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### Why would a politician sollicit foreign investors to come and buy real estate?

In the Netherlands we have a shortage of affordable housing. Especially in urban areas, especially housing in the price ranges affordable for young people and middle and low incomes. This is pretty ...
19 views

### How to migrate a cryptocurrency if someone breaks the security?

Ok, this question is subjective, as there's no right answer because and we can't test it. So keep that in mind. Let's say that I found a way to break the SHA-256 encryption, therefore making every ...
25 views

### For a certain good, if there is a one-time fixed cost for a consumer to switch to a different firm, then this good is? [on hold]

For a certain good, if there is a one-time fixed cost for a consumer to switch to a different firm in a later time, then we say this good is ____ (or has property ___). Examples include Consumer: ...
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### How do I find optimal price or maximise profit in a monopolistic market?

How do I find the optimal price for a monopolist given the monopolist's cost function and market demand? I have $Profit(y) = p*y + C(y)$ where $p$ is price, $y$ is output, and $C(y)$ is total cost. ...
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### how to relate prices to demand [on hold]

I have two markets 1 and 2 and two firms A and B,The demand is related as demand for firm A in market 1 is equal to demand for firm B in market 2 and demand for firm A in market 2 is higher than ...
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### Finding Nash equilibrium [on hold]

$n\geq 2$ individuals have to decide how much capital($y$) to put into their firm, they use the following method. Simultaneously each partner $i$ submits a real number $s_i \geq 0$, the amount of ...
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### Kőszegi - Rabin (2006) model problem

First of all, that's a homework question, and I will try to make it as useful to future readers as possible. Problem So, I was given a problem about the model described by Botond Kőszegi and ...
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### Why don't we mint more m0 instead of creating m1 through fractional reserve banking?

From what I understand, m1 money is just as liquid as m0 since an individual can withdraw it from the bank at any time and in any quantity (up to the amount (s)he deposited). Because of this I don't ...
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### Linear Regression Assumptions of Homoskedasticity

When I studied linear regression analysis, one of the assumptions taught was that of homoskedatiscity. I understood that homoskedasticity was required for significance testing on the coefficients. ...
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### Economics of clubs(sport gym, language course, etc)

I am looking for economic research, theory or empirics, on production/profit maximization/competition for firms producing goods with network effects, such as clubs in which every one's utility depends ...
56 views

### Why Certainity Eqivalence in PIH only holds for quadratic utilities

In my current macro economics course, it has been stated that there is certainty equivalence in the random walk permanent income hypothesis ("which implies individuals act as if future consumption was ...
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### Optimation using the Lagrange method [on hold]

How do I solve this problem? Thanks on beforehand.
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### Calculate optimal discount for product bundling

So recently I made some rules with my transaction data. Based on it I can determine which products are profitable to bundle it together. But even though I know e.g. product A→ product B, are there ...
52 views

### not following a step in a paper on rational expectations

Hi: I'm reading a paper by Broze and Szafarz titled "On Econometric Models with Rational Expectations and I don't follow a step in section 3.2 which discusses the method of undetermined coefficients. ...
51 views

### Why doesn't the central bank extend loans directly?

I've been thinking about the credit theory of money lately and how it creates money. Since Banks look for sufficient reserves after extending a loan, and since the central bank always loans out money ...
48 views

### Why don't banks just buy m0 and create unlimited loans?

In fractional reserve banking a bank can buy m0 and use it to create any amount of m1/m2. Why don't they do this? The loans could be just banks lending each other at 0% interest to create unlimited ...
19 views

### multinational corporation to be a good global citizen

What incentives are there for a multinational corporation to be a good global citizen? How does this “fit” with the corporation’s obligation to its shareholders?
18 views

### How to find out competitive equilibrium? [on hold]

Ua=Xa1Xa2 Ub=Xb1+Xb2 Wa=(1,0) Wb=(0,2) given, how to find out competitive equilibrium?
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+100

### Fixed-income investment in a low interest-rate environment

From an investment perspective, it seems to me that a low interest-rate environment can yield to some relatively "un-risky" profits. As the interest-rate can barely go lower, we now it should rise ...
40 views

### Flooding the real estate market with luxury homes: will average prices rise or fall?

If every middle class single-family detached home in a sprawling metropolitan area like Los Angeles were each replaced with two luxury condos over a short period, would average real estate prices rise ...
18 views

### Math behind pro ratio per user price model for SaaS

I'm a developer in one SaaS company and my Boss has asked me to check with the community about the correct way in which a price could be calculated pro actively in a correct manner, since we're ...
56 views

### Why can Iceland setup and maintain a single-payer system but Vermont can't?

Vermont apparently tried to setup a single-payer healthcare system, only to have various healthcare and pharmaceutical companies threaten to ruin them if they did so, at which point Vermont, a state ...
28 views

### Are institutions a crappy explanation [closed]

Insitutions correlate .7 with gdp Race variables correlate .9 Is institutions a vague and bad explanation for income?
50 views

### Probability of simple lotteries in a compound lottery

Suppose there are two bets: 1)B1 or Lottery 1- A fair die is rolled, if it lands on $1,2,$ or $3$ it yields $100$. If it lands on $1,2$ or $3$. $2000$ if it lands on $4$ or $5$ and $3000$ if it ...
39 views

### Why don't banks just buy m0 [closed]

Under fractional reserve banking everything comes from M0. Why don't banks just buy m0 and make infinite money?
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### Open-source app to aggregate financial data and plot them?

I didn't find a policy for this site, so I hope this is not off topic. However it fits here more than a programming site. I started coding an open source app that will aim to Gather financial and ...
59 views

### What are “the fundamental categories of economics”?

I had an introductory class in marketing last week, and the professor wanted to test our previous knowledge of economics (we are juniors). He asked us this simple question: "What are the fundamental/...
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### Imperfect complement indifference curve

Although I've seen many resources about perfect complements, haven't found anything for imperfect ones. Suppose that with x1 and x2, x2 is used only when there are equal amounts of x1. Any excess of ...
22 views

### Automation of macroeconomic modelling (DSGE modelling)

There are automation software https://cloud.google.com/automl/ and https://autokeras.com/ that automatically builds and tunes machine learning models and machine (deep) learning pipelines. Are there ...