# All Questions

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### How can intermediate goods and final goods be differentiated?

The calculation of GDP(using expenditures) is: $C+I+G+Xn$, where we calculate the spending on final goods and services within a country. However, how exactly are final and intermediate goods ...
1answer
318 views

### What does it mean to have a strictly increasing transformation in consumer theory? [closed]

We're discussing utility functions
1answer
24 views

### Who performs the checks for regulatory compliance at trade borders? [closed]

Customs officers check for tax compliance at trade borders. But who performs the checks for regulatory compliance at trade borders? Is it simply the various Government ministries (eg the one ...
1answer
44 views

### Negative growth rate with positive job growth

As per CARE RATINGS for India, in FY18 half of the formal sector firms are showing negative sales/growth but positive job growth? Explain please.
1answer
161 views

### Money supply and Capital Flows

I have a super basic question on international macro. I read that an increase in the capital inflows (say because of favorable macro enviroment) can increase the domestic money supply. However, it is ...
1answer
59 views

### Difference between “Level” and “Flow” in the Z.1 Fed data

The Z.1 Fed data can be found in FRED. I notices that many similar data sets are labelled "Flow" or "Level". For example, Financial business; total liabilities, Flow Federal government; total ...
1answer
598 views

### Is there any formal definition of a relationship between resource availability and demand?

I do not have any background on economics. So my question might sound too simple and I hope it to be clear enough. I am curious about the following: Is there any formal definition of a relationship ...
1answer
242 views

### Prove that $u$ is a utility function for $\succsim$

If X is finite, define this function $u : X \rightarrow \mathbb{R}$ by $u(x) = |\{z\in X:z \prec x \}|$. Prove that $u$ is a utility function for $\succsim$. Is it sufficient to prove that the ...
1answer
73 views

### Well-informed citizen can contribute better to country's economy?

As the title stated, how can a person from the general public contribute to country's economy by being well-informed? I understand one of the reason would be tax. If a person understands the ...
1answer
48 views

### Why in maximization in OLG model with 1 generations we assume that both consumptions are positive?

I have an OLG model with constant level of technology and population. The utility of agent who is born in period t is: U() = c1,t + 1/1+pC2,t+1 My textbook asks me to write the maximization problem ...
1answer
61 views

### Income Elasticity and Convexity of Demand in Income

What needs to be true about the demand function $z(y)$, where $y$ is income, for the income elasticity $\varepsilon = \frac{dz(y)}{dy}/\frac{z(y)}{y}$ to be always greater than one (so that the good ...
1answer
1k views

### Deriving equation for income offer curve

Sorry if this is a basic question, however I have no idea on how to derive an equation for an income offer curve. All the explanations I'm getting is the graphical one where you just connect the ...
1answer
15 views

### Why wouldn't an arbitrageur who shorts an overpriced security, and longs a substitute company, break even?

A Random Walk Down Wall Street (2015 11 ed, but an 2019 ed. is upcoming). p. 249 Top.   Suppose irrational investors cause an oil company security to become overpriced relative to both its ...
1answer
48 views

### Why can anyone buy insurance of an, without owning the, underlying asset?

A Random Walk Down Wall Street (2015 11 ed, but an 2019 ed. is upcoming). p. 100 Top.   To make matters even more complicated, there was not just one bond issued against a package of mortgages. The ...
1answer
33 views

### Is it correct to say that import tariffs are unilateral?

Is it correct to say that import tariffs are unilaterally decided by the nation or bloc applying the tariff?
1answer
38 views

### What does it mean when someone says “2 trillion wiped off markets”?

After a major global event, sometimes the markets move and headlines are written saying something like “2 trillion wiped off markets”. But what does this actually mean? Does it mean the aggregate ...
2answers
57 views

### What is the relation between probability of default and country's interest rates?

Is probability of default expected to increase with increase in the interest rates set by the central bank?
1answer
300 views

### tariffs and inflation

tariffs lead to inflation; is this the same as inflation from supply constraints or demand drive, given that the tariff is removed from the money supply? How should the fed be thinking about this in ...
1answer
47 views

### Help with undergrad econometric project

I am working on undergrad research in econometrics and am seeking some advice/help in terms of finding data sets and picking variables. I have an idea chosen for my topic, but I need to make a ...
1answer
26 views

### What would an investment bank have to gain by warning of an impending financial crisis?

After reading a recent article and a discussion with a friend, I was left wondering what an investment bank would have to gain by claiming that a financial crisis is coming. I can see an obvious ...
2answers
92 views

### Why can an increase in inflation rate, increase interest rates?

A Random Walk Down Wall Street (2015 11 ed). pp. 224 Bottom - 225 Top.   Changes in the rate of inflation will similarly tend to have a systematic influence on the returns from common stocks. This ...
1answer
30 views

### How are robocallers able to make international calls profitable? [closed]

I have read that robocallers are untraceable because they are usually companies in India or the Phillipines. I don't understand how this is possible. If I call India or the Phillipines, it is very ...
3answers
49 views

### Can we get rid of banknotes and coins?

this is more a theoretical question, nowadays with Internet, Debit/Credit cards and Cryptocurrencies, why should we keep printing/making more physical money? granted not everybody has access to ...
1answer
53 views

### What is a digital platform?

In context of European research projects, they invest into development of digital platforms. Here is a source to give a definition but not really, and every time people refer directly or indirectly ...
2answers
51 views

### Efficient revealed preference check of whether two preferences over lotteries are the same?

I want to find conditions under which two utility functions can be known to be linear transformations of each other. Consider a (possibly finite) arbitrary set of outcomes $X$ (Not necessarily ...
1answer
19 views

### How to understand the USDA Demand/Supply report ?

Need you help .. Have couple questions about the Wheat Report M Acres stands for ? Million acres ? Yield Bu/Acre , can anybody explain this calculation ? Stocks use ratio % , how the calculation ...
1answer
106 views

### Why would a rise in the discount rate stop foreign gold drain and make banks fail?

I am reading "Capitalism and Freedom" by Milton Friedman. In Chapter 3, "The control of Money", Dr. Friedman explains how the Fed exacerbated the Great Depression of the 1930s. In particular: In ...
4answers
219 views

### Does fiat currency disprove labor theory?

From what I understand. LTV predicts that fiat currency, which requires zero labor to produce, should have zero value. Empirically, fiat currency does not have zero value. Would this prove that the ...
1answer
223 views

### GDP Calculation and treatment of Personal Savings

While calculating GDP of nation, how personal savings which is not invested in economy or has become part mandatory reserve ratio of government is treated? Similarly do we include import and export of ...
1answer
115 views

### Can the Fed raise the M1 money supply permanently w/o helicopter money?

I just read parts of an introductory economics book. I read about the monetary system in the U.S. and came up with the following question: Can the Fed raise the M1 money supply permanently without ...
1answer
2k views

### Short run Aggregate supply curve is horizontal or positively sloped?

I want to understand the adjustment process from Very short run production decision to Short run production decision to Long run production decision. As far as I've understood: consider an increase in ...
1answer
387 views

### Syndicated Loans Terminology - Borrower & Sponsor

I am trying to understand what is the difference between the Borrower and the Sponsor entities in a syndicate loan agreement. Namely, it looks like quite often, the Borrower entity will be a Company ...
1answer
66 views

### Market Theory: Upper limit of capital/weatlth accumulation?

Politicians often bicker about how big the government should be when it comes to redistributing wealth. Question: My question is simple; would a laissez-faire approach to the market always result in ...
1answer
58 views

### Yield curve and cash rate (multiple choice)

I'm working on this supposed to be a simple multiple choice question: The yield curve indicates? A. the relationship between existing short, medium and longer term interest rates, independent of ...
1answer
74 views

### What does it mean if country X has a higher GDP at Purchasing Power Parity (PPP) than country Y?

I understand the implications of having a higher/lower GDP at market exchange rates. I also understand what PPP measures. But, what does a difference in GDP, at PPP, indicate in terms of differences ...
1answer
65 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 ...
2answers
159 views

### Are there any countries in which post-dated cheques are commonly used in trade?

I am reposting from the Personal Finance & Money Stack Exchange because my question was flagged as being about economics and off-topic. The post-dated cheque is the most common payment instrument ...
1answer
22 views

### who is responsible as international court to solve economic conflicts between countries and is it obligatory? [closed]

you know turkey was one of the 7members of F-35 joint strike fighter program..its engine is being manufactured in turkey.turkish government made all legal obligations to program and paid 35 billion ...
1answer
23 views

### Question related to conjoint analysis [closed]

I am studying for an exam in marketing, and there's the following sample question: The main reasons that people choose products in category X is: 1. Brand 2. Price. Where the importance ranking is 50%...
1answer
47 views

### What policies are in place to police financial speculation in the modern era?

Maynard Keynes in section VI in chapter 12 of his General Theory of Employment, Interest & Money writes: If I may be allowed to appropriate the term speculation for the activity of forecasting ...
1answer
21 views

### Do mechanisms always result in a series of strategic games being played out?

Mechanism design is an offshoot of game theory, and many call it "inverse game theory", since it involves the use of incentives to ensure that the end result of the game being played out is beneficial ...
2answers
65 views

### A few questions in paper Chong 2007 [closed]

I think it is hard to derive Eq(5) in paper Chong (2007). (http://www.bgu.ac.il/~grade/inst_ineq.pdf) Could anyone share any ideas on its derivations or intuitions behind it? Let's discuss it in more ...
1answer
47 views

### prove that $M_xM_1 = ?$

Let $\mathbf{y} = \mathbf{X_1}\mathbf{\beta_1}+\mathbf{X_2}\mathbf{\beta_2}+\mathbf{u}$. Let $\mathbf{X} = [\mathbf{X_1} |\mathbf{X_2}]$. Define $\mathbf{M_i}$ to be the complementary projections ...
2answers
39 views

### A maximization program expressed by per capita variales - Ramsey model

I have a problem to be maximized with the following program $$max\int_{0}^{\infty}\left\{ u\left(C\right)+\beta S^{\chi}\right\} e^{-\rho t}dt$$ s.t $$\dot{K}=AK-C$$ \dot{S}=\left(1-S\right)S-\...
1answer
45 views

### Should publishers of scientific papers such as Elsevier be regulated by the government?

To get a pdf copy of a paper published in Elsevier is quite difficult. You need to pay a high price. Publishers like Elsevier used to have good reasons to charge people a lot: before the invention of ...
2answers
58 views

### when a=0, would economy accumulate more physical capital? Why?

Utility function is $U(c_t,l_t)=(1-a)ln(c_t)+aln(l_t)$ $l_t$ is leasure time $c_t$ is consumption Production function is $y_t=k_t^e(1-l_t)^{1-e}$ $k_{t+1}=i_t+(1-\delta )k_t$ where k is ...
2answers
485 views

### Why does the government need to control interest rates?

Context As far as I understand, economic cycles are mostly dependent on the amount of demand (which is influenced by money supply, which is in turn influenced by the availability of credit). Since ...
1answer
461 views

### Why do central banks print money? [duplicate]

If a country's central bank prints money, it causes inflation. However, apparently, small amounts of inflation is a good thing. Why is the case? What would happen if central banks stopped printing ...
1answer
215 views

### Difference between the minimum selling price and the actual selling price

I'm actually wondering what the correct name for the difference between the minimum selling price and the actual selling price is? Let's say I'm having an product A. After all calculations(costs, ...
1answer
33 views

### Price Derivation in a Production Function

Here is a composite goods production function: And here is the price ratio of Ys and Yg, derived from their marginal products: Then the author normalized the price of final goods Y to 1 and somehow ...

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