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68 views

Calculating economic scope

The costs of running a university are $C = F + m_{1}*q_{1} + m_{1}*q_{1}^{2} + m_{2}*q_{2} + m_{2}*q_{2}^{2}$ where $ q_{1} $ is the number of students taking courses during the academic year and $q_{...
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1answer
59 views

What is a Stock exchange? [closed]

What is a stock exchange, I understand that it is a place where one buys and sells shares but I would like to know in more detail.
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1answer
1k views

Corporate Finance: From External Financing Needed(EFN) to Sustainable Growth Rate

Well in this link I get the EFN definition that I know of, with the spontaneous liabilities term included. I'm trying to derive the Sustainable Growth Rate for a corporation, from this definition of ...
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0answers
519 views

Interpreting coefficient in the disutility function as disutility tolerance?

I am studying a model that relates incentives (money) and a set of actions. Let $f(x) = k\frac{x^2}{2}$ be the disutility function of the agent, where $x$ is the level of effort that the agent is ...
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1answer
48 views

Real and nominal value interpretation

When price is deflated according to some base year, what does the real value mean? E.g. if we are deflating \$5.000 from year 2000 (base year, deflator=1) to 1980, using the CPI 1.6 from 1980, we get \...
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0answers
112 views

Fuel trading a market with near-perfect competition

Can I classify the fuel trading market (wholesalers buying and selling fuel by phone) as a market with near-perfect competition? It is a market with many sellers and buyers, the product is ...
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0answers
24 views

Beveridge Curve: Add a Variable for Young Share

A beveridge curve show the relationship between unemployment and vacancy. Some papers add additional variables like Real GDP, real interest rate, etc to test for the matching efficiency of the BC. ...
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0answers
45 views

Keynesian consumption law not applicable in USA ?

I was looking at some numbers and saw that in USA in 2010 consumption was at 70% but savings were close to zero and that even places were there is high income savings are still low while the keynesian ...
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0answers
58 views

Project Financing Evaluation and accounting

While evaluating the whole entrerprise value of Falck Renewables using the discounted cash flow method I end up with a negative continuing value and economic profit due to the negative spread between ...
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0answers
227 views

Principal agent question

Principal is interested in buying lake. The revenues of operating the lake as a camping site are determined by the weather (a random parameter $w$ distributed uniformly on $[0, 1]$) and by the ...
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0answers
2k views

Finding the covariance of a stock portfolio

So my question goes like this, I have the returns of 3 different stocks AAPL, NKE and BBRY I make 4 portfolios out of them as follows: and the question asks me to compute the correlation coefficient ...
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1answer
61 views

Isolating single campaign effects over a sales series

I'm trying to wrap my head around the concept of advertising effectiveness and hit a wall when I tried to measure the quantitative effect of an advertising campaign on the sales tendency of a business....
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0answers
76 views

How is Comparative Advantage a superset of Absolute Advantage? [duplicate]

Source: 'The Theory of Comparative Advantage - Overview', Prof Steven M. Suranovic Advantageous trade based on comparative advantage, then, covers a larger set of circumstances while still ...
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2answers
46 views

Do capital goods have to be valued so that (discounted) real expected return on capital goods equal current present value of capital goods?

Let $P_k$ be the value of 1 quantity of a capital good. If one does not sell the capital good and keep it, the good provides interests. In such a case, does standard macro say that all expected ...
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0answers
59 views

Optimal taxation and substitute commodities

Reading Ramsey's paper: a contribution to the theory of taxation. It says that when we are dealing with rival goods we look if the tax that is going to be applied leave unchanged the proportions in ...
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1answer
50 views

How does an increase in domestic interest rate increase capital inflow?

What I have typed in the title is all I want to know.
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0answers
163 views

Data Reduction using Principal Component Analysis

I have performed PCA over a data set containing 25 items (variables). PCA was performed in a view to reduce the number of items (variables) from the data set, so as to move forward with analysis. ...
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2answers
20k views

What is the difference between a free trade agreement and a preferential trade agreement?

What is the difference between a free trade agreement and a preferential trade agreement? What is the difference between a free trade area and a free trade agreement?
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0answers
29 views

Measuring Integrating Capital Market

There are several methods measuring integration capital market. What best to measure for integration capital market?
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1answer
29 views

Stimulus (Rescue) Package [duplicate]

With regard to the recent 2 trillion dollar coronavirus package, is the money just being printed or borrowed? A gentleman from the tax payer union claims the taxpayer will eventually be on the hook.
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2answers
48 views

Is there an “ideal” ratio of tax revenue to GDP? Or, at least, can I assume a higher ratio is better?

At the link below, you can see countries have a huge difference in ratios of tax revenue to GDP. Is it fair to assume that a higher ratio is better? Does raising a substantial portion of your GDP in ...
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1answer
16 views

Does Medicaid or Medicare represent a higher risk to the Federal Government Solvency and Debt going forward?

I'm trying to understand not only which program is expected to be larger in terms of costs, but which one has the least capacity to adjust (reduce benefits if revenues for the program fall).
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1answer
42 views

Can't we measure the growth in the income levels of poor?

Inflation has been a challenging aspect of policymaking. In such situations growth in the income levels of the population living below the poverty level can never be measured accurately (due to ...
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1answer
29 views

Why the source profit is not only trade markups?

I'm researching the source of profit. In Marx I've found the following passage: If then, speaking broadly, and embracing somewhat longer periods, all descriptions of commodities sell at their ...
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2answers
73 views

Is a loan lent with a rate under the inflation rate free money?

Suppose we have an inflation in a country with an annual 2% and we get a loan for an annual 1% (real interest). Is the money we receive free? This is a common practice in some European countries, ...
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1answer
30 views

Economics of disparity in wages and in 'financial quality of life'

I am seeking a quantitavely and logically satisfying answer to the question I will outline below. It could be in a form of a book/article reference and ideally have as little ideological bias as ...
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votes
1answer
35 views

what is the Relationship between Zero nominal interest rates and liquidity traps

So I'm reading mankiw"s principles of economics and I'm in the chapter about the influence of monetary and fiscal policy on Aggregate demamd. The part about nominal Interest rates and liquidity traps ...
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2answers
52 views

Price and cross price Elasticity of demand [closed]

The question is: Prove or disprove, if the price elasticity of a demand of a good is unitary then the cross price Elasticity of demand of that good is zero. Any hints on how to approach this?
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2answers
256 views

Why don't economists recommend voluntary childlessness to fight poverty?

Please see the titled question. Poverty obviously demands pressing solutions, let alone a stopgap. Dasgupta beneath refers to "the best Desta’s world can do": isn't Voluntary childlessness and ...
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4answers
283 views

What is economics?

It has been disturbing me since the first year of college that the meaning of economic is express too much as it is too less. "Study of scarcity, utilize the limited resources to satisfy unlimited ...
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1answer
32 views

Do the efficiency savings of mergers indicate a type of waste or inefficiency in a market?

In this BBC News article about the merger of Tata Steel and Thyssenkrupp, the following figure is reported: The merged group anticipates it will make costs savings of between £350m to £440m a year. ...
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1answer
76 views

What is the best example social norm effect economy?

Here is my example. I read the paper called "Social norms and Energy Conservation" (2010) by Hunt Allcott, about the energy conservation of households by providing them with the amount of energy ...
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2answers
113 views

Interrelationship between inflation and foreign capital flow

For the below let's assume domestic currency is ₹ and foreign capital is in \$ Foreign Capital Inflow => ₹ Appreciates (Because of more \$) But consider this, Foreign Capital Inflow => More ₹ in ...
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1answer
93 views

Anything written on the process behind “multiplicative” production function?

Intuitively, one might make a naive first guess that the production function of the economy, or of a firm, should be a "leontief" production function: "for example, you need both a factory and a ...
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1answer
498 views

Does Average Total Cost (ATC) include implicit opportunity costs?

Does the average total cost include opportunity costs? If so, are these opportunity costs considered fixed costs or variable costs? How are they calculated.
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1answer
202 views

Okun's law nominal GDP growth

Does Okun's law also work for nominal (not real) GDP growth?
0
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1answer
53 views

Human capital for under developed countries

I am currently undergoing a study on economic growth in 11 countries: Bangladesh, Egypt, Indonesia, Iran, Mexico, Philippines, Pakistan, South Korea, Turkey and Vietnam. I plan to use panel regression....
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1answer
37 views

Revealed preferance: elementary question

When the market prices are Rs 5 per apple and Rs 6 per orange a person buys 16 apples and 28 oranges. When the prices are Rs 4.4 per apple and Rs 6.4 per orange ,the person buys 20 apples and 25 ...
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1answer
111 views

Do minimum wage laws bring more bad than good? [duplicate]

Let me begin by saying I know nothing about economics. In the past couple of days I've been listening to some lectures by Milton Friedman. They are of non-technical nature. In one of them he makes an ...
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1answer
27 views

What is the government's ideal rate of growth for property prices?

If property prices raise too quickly, it can price people out of the market, cause mortgage stress and financial hardship and create a property bubble. If property prices fall too quickly, it can be ...
0
votes
1answer
49 views

Do current Central Banks need to target a monetary aggregate as they set interest rates for a target inflation? [closed]

On reading a textbook, the author state that after the 80's, and the serious consequences of thinking that inflation could be controlled by just targeting a monetary aggregate, modern central banks(CB)...
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1answer
67 views

Doesnt the fact that cash reserves go down in recessions contradict Keynesianism?

It seems cash reserve is procyclical. Also anyone have the financial cash reserve data?
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1answer
78 views

What would be the economic effects of a reduction in the general level of protectionism on the Australian economy?

Protectionism methods including: tariffs, subsidies, quotas, local contents rules and export incentives Would would be the effects of a reduction of these methods, not complete free trade.
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1answer
44 views

Strictly increasing function transformation

I have utility function given by: $U(x_1, x_2) = \begin{cases} x_1+x_2 & \text{if $x_1+x_2<6$} \\ 6 & \text{if $6\...
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2answers
94 views

Private Investment Impact on Bond Yields

From Japan to the US to Germany, we are currently seeing longer term bond yields falling at an alarming rate. I tune into a fair bit of economic commentary, and can often come to some sort of ...
0
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2answers
78 views

How are the price signals of stocks in the stock market centralized?

We can look up the price of a stock, like that of Google, and it gives a particular figure. I would like to know how the price signal is "centralized". What I mean is: if the trades happen between ...
0
votes
2answers
174 views

Free market vs high income [closed]

While answering this question I was doing some research and found that the high-income world has Free Markets. Is it that because they are high-income, they have free markets, Or, is it that their ...
0
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1answer
44 views

Extension on the suspension of national debt ceiling

So I just want to make sure i got this right, The national debt ceiling was suspended, i.e. the government can now freely spend until Dec.8, which they "say" was for providing $15bn in hurricane ...
0
votes
1answer
216 views

How does an elastic Money Demand affects the effectiveness of fiscal policy?

From my notes: 'The elasticity of Money Demand reduces the impact on the interest rate of the increase in government spending...' My question is: if the Money Supply is inelastic, the elasticity of ...
0
votes
1answer
44 views

MLE estimation with serially correlated errors

I want to estimate the parameters of $a_t = a_{t-1}+\theta+\epsilon_t$ using MLE. Assume errors $\epsilon_t$ are serially correlated, then how would I choose the likelihood function?

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