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Both of them are consistent. The economic profit is the total revenue $TR$ minus total cost $TC$ but in economics costs must include also opportunity costs not just accounting ones. However, for all standard market structures $TR>TC$ happens only if the marginal revenue or price $P$ is above marginal costs $MC$. Also if there is positive economic ...


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Let's address your question in a canonical manner. Say that: the required rate of return of (private) investors is denoted by $r$. the interest rate or the cost of debt is denoted by $r_D$ (naturally $r_D < r$) the share of debt in the capital structure of the company is denoted by $X\%$ the corporate tax rate is denoted by $T_c$ It follows that the ...


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I think it will help to fill in some of the missing causal elements in this picture. Suppose a classical economy at equilibrium, and understanding "growth" as growth in nominal GDP, When growth and inflation are primarily driven by aggregate demand... All else equal, a positive demand shock (rightward shift) leads to higher consumption (growth) and ...


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When growth and inflation are primarily driven by aggregate demand, nominal bond returns tend to be negatively correlated with growth Actually, the above sentence is the explicited version of what you have in mind, i.e. the links between nominal (vs real) returns, (demand-driven) inflation and growth. when growth and inflation are primarily driven by ...


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