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Questions tagged [government]

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The reality of the multiplier effect

I was just reading my economics notes when I stumbled upon this paragraph: Singapore has a very open economy and imports most of its inputs and necessities, which means that MPM is likely to be ...
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14 views

The U.S. government's red-lines in regulating the banking industry and preserving the health of market competition

The presupposition that pursuing one's interest will eventually result in greater good for the whole society rest upon the underlying assumption that bad behaviors will eventually receive punishment, ...
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24 views

USA exporting inflation

I would like to ask if my understanding is correct: the US Government(more specifically the Fed) can print however much money it wants as they can easily export the inflation since many countries use ...
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27 views

Is it possible to commodify the State?

Karl Marx said that capitalism commodifies everything. So I'm wondering if that rule applies to the very State itself.
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36 views

Breaking Up The Big Banks

How can banks break themselves up? If they refuse to how can the federal government force them to break up or break them up themselves?
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Why having Silver/Gold cover can be bad for bankers?

I was randomly reading on the assassination of John Kennedy. And I found that some of the possible reasons why he was assassinated, is because he was planning to issue some kind of silver cover. Such ...
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2answers
42 views

Economics PhD graduate? [closed]

What are the options for Economics PhD students after graduation? I am aware most students end up going into academia as either professors or researchers. What are the options in the corporate world ...
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1answer
55 views

What are the arguments for banning insider trading?

I can't see any economic argument for banning insider trading. In general, the point of allowing financial securities to be traded is to ensure that they are properly valued. "Insiders" seem better ...
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41 views

Use of DSGE models for the day-to-day government policy decisions? If no - then what are obstacles?

Are DSGE models used for the day-to-day government policy estimation and optimization? E.g. can DSGE model be used for estimation of the return of additional investments in education and how those ...
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1answer
31 views

Relevance of government liabilities to GDP

After Malaysia's national debt was [reassessed][1], its totaled $250bn along with other government liabilities. Now, I'm having trouble understanding the direct relevance of the ratio of goverment ...
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23 views

How to determine the default probability of a county in a bond that is not in its native currency?

Consider the following case: Country P uses the currency Euro and gives p percent interest on a one year bond issued in Euro. Country Q uses the currency TL and gives q percent interest on a one ...
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0answers
18 views

Government efforts in tacking the food crisis

I am a student taking H2 economics at the 'A' levels. Recently, in one of our case study questions in one of the tutorials on the price mechanism and its applications, we covered the food crisis. As I ...
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9 views

Where does the money go when a city government saves on cost?

How would one go about determining when a city government saves money by lowering their cost of product or service procurement, where does that money go? Specifically, how might one establish how much ...
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1answer
70 views

Can't government experiment on price in the case of a monopoly?

In the lecture given by Jon Gruber at MIT, he talks about the governmental regulations on monopolies, and he states that (in short) for government to regulate a monopoly, it needs to know the ...
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1answer
30 views

Why regulate the financial world rather than take over some of the services?

The government regulates some of the behavior of financial markets. Understandably, especially considering the crisis. But would it not be easier if the government overtook some of the aspects of the ...
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1answer
33 views

Generic bond yileds

I was looking on historical sovereign bond yields for a project. I was wondering what is meant by "generic bond yields" mentioned on bloomberg. Somewhere else i found data about the same country but ...
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1answer
47 views

What are the Economic reasons and explanations to make a referendum?

Australia is now conducting a survey on same sex marriage, to decide if they take the vote to the parliament or not. Although it is called a survey, the population is treating it as a referendum. The ...
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1answer
27 views

What branch of Economics does 'e-governance' fall under?

I need to work on a project regarding e-governance in a region of India, and, I need to consult professors in education institutes who would have knowledge in this subject. So, for that I need to know ...
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2answers
150 views

Difference between a 3-months UK nominal spot rate and a 3-months UK treasury bill discount rate?

I am trying to collect data I could use for calibration of a short-rate modeling process, so I need data which represents the historical short-rates. On the Bank of England webpage I came across the ...
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1answer
200 views

How much does a public sector pay rise actually cost the UK government?

This is something that's in the UK news at the moment. Public sector workers have experienced a 1% annual cap on pay increase since 2013. Government ministers are appearing on TV saying that they don'...
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Falling oil prices but no benefits passed on to the end user; government's strategy

Even though the oil prices have fallen rapidly in the recent years, the cost of petroleum products hasn't gone down in India. Apart from raising more revenue, what are the other benefits the ...
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1answer
97 views

How does the government launch of Tomahawk missiles against Syria affect the economy and governmental budget?

Last night an air strike was launched against Syria of about 60 Tomahawk missiles. At approximately $832,000 apiece, this airstrike cost the US gov't about 49 million dollars. Initially, this sounds ...
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3answers
308 views

How can a country ensure its national currency is used by its citizens?

I am wondering how countries are able to force everyone to use its own currency, instead of some external currency (like the U.S. dollar or Bitcoin or cookies or something else not under government ...
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1answer
164 views

Welfare analysis for a military draft

How would the welfare analysis of a military draft look? My intuition tells me that it would look similar to a price ceiling below the equilibrium, with the exception that suppliers (civilians) are ...
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1answer
280 views

Are government income and government employee wages counted in GDP? (income approach) [closed]

The Wikipedia article does not include it nor exclude it.
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Why are “transfer payments” not part of GDP?

It is well-known that transfer payments are not counted in GDP (e.g. wikipedia 1 and wikipedia 2). For instance, exercise 2.c in Chapter 2 of Jones book's Macroeconomics ask to calculate how much GDP ...
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1answer
95 views

Why switch from Gold to Fiat

If I'm not mistaken, gold was used in early days of USA. Why did we switch to fiat, i.e dollar bills. Originally they were backed by gold, so why not keep gold? I'm just trying to understand basics ...
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2answers
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Is the government a producer, a consumer, or both?

Example: A soldier is paid \$50,000 a year to serve in the army. So \$50,000 worth of defense services are produced and consumed. In this example, who is the consumer (C) and who is the producer (P)?...
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37 views

U.S. Bureau of Economic Analysis, when was that created?

I thought that GDP in the United States was computed by the Bureau of Labor Statistics, but I find that now it is made by the "U.S. Bureau of Economic Analysis" which I never heard of. For how long ...
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1answer
55 views

Why does 'government consumption'in NK models not add to utility

In almost all NK models public government consumption (like coastal defences) or private government consumption (like primary and secondary education) is by default 'wasteful'. Government consumption ...
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1answer
3k views

How government borrowing from central bank increases money supply in economy?

Yes, public finance by government may lead to increase in money supply in economy. But, if govt borrows money from central bank, less amount of money is left with central bank to lend it to banks and ...
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15 views

Are there examples of businesses that profit from helping consumers coordinate better?

In economics, its often assumed that individuals are unable to coordinate. Moreover, its often assumed that one of the roles for the government is to help consumers coordinate. However, its also ...
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1answer
48 views

Does the Tax Allowance Benefit Everyone (Regardless of Their Income)? [closed]

Note: This question is in the context of the UK and its policies. I understand that if your income is below the tax allowance (£11,000), you pay no income tax. However, I think my textbook is also ...
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2answers
190 views

How does the ban on surge pricing affect the companies, customers and the economy?

Recently, there has been a ban on surge pricing in two of India's busiest cities, namely Delhi and Bangalore. I understand that surge pricing is a method to ...
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0answers
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Principle of least benefit

What is the name for the phenomenon/principle that a government subsidy or other benefit, tends to fail to reach the people that need it the most or for whom it was intended? The reason being that ...
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36 views

Sanders' Plan to tie health care spending as a percentage of income [closed]

So Bernie Sanders' plan considers healthcare as: Bernie’s plan will cover the entire continuum of health care, from inpatient to outpatient care; preventive to emergency care; primary care to ...
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4answers
347 views

What are taxes for since law forbids printing of money?

This question bothers me for a long time: why government keeps up with the taxes instead of with printing money? This would decrease its operating costs, simplify law and generally raise comfort of ...
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1answer
332 views

Government's intervention question [closed]

Given that demand for a good X is equal to $q_D=393-2p$ and market supply is $q_S=p/4-12$. Find equilibrium price and quantity, consumer and producer surplus and draw a diagram illustrating the ...
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1answer
63 views

Why does state-owned company so aggressive in making profit?

Take China National Petroleum Corporation(CNPC) as an example, almost 86% of its stock is stated-owned. Its senior managers' promotion are related to the company's profit. And since there are ...
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1answer
14 views

Calculations regarding Buffer stocks?

Here's a question which I don't quite know how to answer. Originally, my answer was (D), though when I checked it the correct answer was (A). As far as my knowledge goes, buffer stocks are buying/...
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1answer
31 views

How to find (document) the actual costs of a specific US government social program?

I had an interesting discussion today while volunteering at a food bank program. The individual I spoke with was a retired math professor who stated his research makes him believe that significant ...
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1answer
2k views

Price Producers Receive as a Result of Indirect Taxes

In my economics class, we were introduced to the idea that if the government imposes an indirect tax on a good, the price consumers have to pay increases, but along with this increase in price for ...
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2answers
137 views

When the Fed increases the money supply, does any of the additional supply go directly to the government?

When a central bank increases the money supply, how much of it goes directly into the government purse? Say for example: The money supply is $150 The populace has $100 The government has $50. If the ...
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0answers
82 views

Why might a country with a budget surplus continue issuing bonds - ie borrowing?

Some argue that if a government runs a budgetary deficit, it is a drag on the public finances because taxpayers must fund interest payments to external creditors. If the interest payments were an ...
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1answer
151 views

Why did the price level of government consumption increase in the United States?

From The Penn World Tables (PWT7): Before 1970, the price levels of the three GDP components had been going in parallel. In the late 60s, the price level of government consumption went up (the Nixon ...
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3answers
64 views

Are all country government budgets made up of taxes?

Sorry for my ignorance, but I was doing research and noticed that the US's budget is made up of taxes. Is that for all countries? Where is the line between the economy and the government budget? Are ...
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41 views

How did Switzerland manage to balance its budget?

Why switzerland managed to balance its budget after financial crisis? Why they had a surplus after 2008? I am not able to find comprehensive source for this type of information.
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2answers
350 views

What's quantitative easing?

From what I understand after reading mainstream media, quantitative easing increases the supply of money in the economy without direct government spending (fiscal policy). It seems to have all the ...
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1answer
95 views

Government spending/borrowing difference/ national debt increase disparity

My background in economics is non-existant, I'm just doing some research before the UK general elections and am having some difficulty in understanding certain data. Assuming the figures found in ...
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1answer
76 views

Can government and people spend money foolishly be a main cause of inflation?

Can government and people spend money foolishly be a main cause of inflation? For example if the the arm race happen in two country unwisely, two country will be focus on a military product instead ...