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06-12-2013, 05:13 PM
RE: Ask an Economist
(26-05-2013 04:25 PM)Thomas Wrote:  I teach and hold an advanced degree in Economics.
If you have any questions on economics I'll attempt to answer them.
Always willing to help if I can.
But please, I can't do your take home exam for you.

Seems pointless since there are people with the same degrees you have who disagree with you.

The problem with economic theory is that it does not follow an evolutionary diversity on a ecosystem scale.

Everything sounds nice on paper either way. "Individualism" vs "socialism".

The problem is that it never takes into account diversity and like religion the advocates argue for their own self interests.

The other problem with economics is that it is far to often treated like a checkbook without the psychology.

Nothing is every "either/ or" for me. Individualism sounds nice and so does the idea of being concerned with others.

In our species history and even outside our species evolution is BOTH the individual and cooperation. I don't think you can make it all or nothing. Some things are suited to the private sector better while government is suited for others. But since both are run by humans both are subject to abuse and monopolies of power.

Poetry by Brian37(poems by an atheist) Also on Facebook as BrianJames Rational Poet and Twitter Brianrrs37
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21-01-2014, 06:36 PM
RE: Ask an Economist
Hey Thomas!

I'm trying to help my little bro with an economics question. The first two parts seem pretty straight forward and I think I can explain them to him but the rest is a bit difficult. Can you please help out being an expert an all?

Robert is currently single, unemployed and leaving alone. He is receiving government
allowance (similar to Newstart) but looking for a job. He found a job that pays $15 per hour, but he is confused how accepting the job will affect his entitlement to the government assistance. Your job is to help Robert to figure it out. (Allowance is usually per fortnight, but we will look at per day for simplicity).

a) Suppose that Robert has 16 hours a day available for work. If he doesn’t work at all, he receives $81 per day from the government (that includes $58.50 plus $22.5 value of rent assistance and health care card). He can spend these money on “other goods”, which have price equal to one. Show this point A on a diagram with leisure on horizontal axis and “other goods” on vertical, as in lecture 3.
b) If Robert earns less than $9 per day in his job, he can keep all his allowance and his earnings from the job. How many hours and minutes would it take him to earn $9? Show new point B (where he earns $9) on the same diagram as in a).
c) If Robert earns more than $9 but less than $21 per day in his job, he will lose 50c for each dollar earned between $9 and $21. For example, assume that Robert earns $13 per day. Then his government allowance will decrease by (13-9)*0.5 = $2. How long will it take Robert to earn $21? How much money is available to spend on other goods in that case? Show new point C on the diagram.
d) If Robert earns more than $21 but less than $96 per day in his job, he will lose 70c for each dollar earned between $21 and $96. That’s in addition to 50c per dollar loss for $9 to $21 range. If he earns $96, how much leisure is he enjoying? How much money is available to spend on other goods? Show this point D on the diagram.
e) If Robert works even one minute more than at point D, he will lose all government
allowance (including rent assistance and health care card worth $22.50 per day). Draw his budget line when he works more than at point D.
f) Draw Robert’s overall budget curve (for all values of leisure).
g) Draw Robert’s indifference curves such that he prefers to accept full time job (8 hours per day). Show his optimal choice on a diagram.
h) Peter (who otherwise is exactly in the same situation as Robert) earns just under $96 per day from his job. Draw several Peter’s indifference curves and show his optimal choice on a diagram.
i) Mary (in similar situation to Robert and Peter) earns $19 per day from her part time work. Draw several Mary’s indifference curves and show her optimal choice on a diagram.
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30-01-2014, 10:16 AM
RE: Ask an Economist
I have a question regarding exchange rates.

If a country's currency depreciates, this makes imports more expensive and exports more attractive. So that country's imports should decrease and exports should increase. This means that the demand for that country's currency increases (due to increased exports), and the supply of that country's currency decreases (decreased imports).
If this happens, the value of that currency should increase, leading to appreciation!

It seems to me that any depreciation in the value of a currency will automatically lead to appreciation.

Could you please explain this apparent contradiction?

Thanks!
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30-01-2014, 10:19 AM
RE: Ask an Economist
(30-01-2014 10:16 AM)sadhana Wrote:  I have a question regarding exchange rates.

If a country's currency depreciates, this makes imports more expensive and exports more attractive. So that country's imports should decrease and exports should increase. This means that the demand for that country's currency increases (due to increased exports), and the supply of that country's currency decreases (decreased imports).
If this happens, the value of that currency should increase, leading to appreciation!

It seems to me that any depreciation in the value of a currency will automatically lead to appreciation.

Could you please explain this apparent contradiction?

Thanks!

The OP hasn't been here since late last year. Maybe they'll return or perhaps another user can answer your question.

In any event welcome to the community.


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It's hard to make believe you're happy when you're gray
Baby, when you're feelin' like you'll never see the mornin' light
Come to me..Baby, you'll see -- The Four Seasons

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30-01-2014, 12:29 PM (This post was last modified: 30-01-2014 05:31 PM by Cathym112.)
RE: Ask an Economist
(30-01-2014 10:19 AM)Momsurroundedbyboys Wrote:  
(30-01-2014 10:16 AM)sadhana Wrote:  I have a question regarding exchange rates.

If a country's currency depreciates, this makes imports more expensive and exports more attractive. So that country's imports should decrease and exports should increase. This means that the demand for that country's currency increases (due to increased exports), and the supply of that country's currency decreases (decreased imports).
If this happens, the value of that currency should increase, leading to appreciation!

It seems to me that any depreciation in the value of a currency will automatically lead to appreciation.

Could you please explain this apparent contradiction?

Thanks!

The OP hasn't been here since late last year. Maybe they'll return or perhaps another user can answer your question.

In any event welcome to the community.

First off, try not to confuse the demand for stuff (i.e. exports) to be the same as the demand for money. These are two difference concepts.

The value of money is determined by the supply and demand of the money. If the dollar depreciates, it is because there is too much money in circulation, and the money supply is considered to be loose. Contributing factors depend on the balance of payments (i.e., are we exporting more than importing).

Imagine a bucket and water. Exports pours water (money) into the bucket, while imports pour water (money) out of the bucket. When the water is being poured into the bucket faster than it is getting poured out of the bucket, the bucket overflows.


Exports increasing, pumping more money into the US currency system. Imports are decreasing, which means the money stays in the US currency system

So the supply of money is increasing faster than the demand, which is why an increase in exports does not appreciate the dollar. The only way to balance the depreciation is the dollar is to tighten the money supply to reduce the amount of money in circulation. This means raising interest rates, raising reserve requirements for banks, and the FED selling securities to bank reserve accounts, which decreases the funds they have available.

make sense?

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05-02-2014, 09:07 AM
RE: Ask an Economist
Hi Thomas,

I am guessing that this is a common question but I just don't know the right keywords for a search.

It seems to me that it just doesn't take all of us to provide necessary goods and services for all of us anymore. There is a sign outside Kansas City on I-70 that I remember passing as a kid. Then, it said, "One Kansas farmer feeds 28 people plus you." Over the years, that number has steadily increased. Now, they appear to have given up and it says "...more than 128 people...". My point is that it takes fewer farmers to feed us all.

I call this the George Jetson scenario. George is the sole employee of Spacely Sprockets and his only job is to come to work each day and push a button to activate the entirely automated factory. It seems to me that we are slowly progressing towards a George Jetson world.

Granted, we seem to be finding things for people to do but the jobs are either highly technical or mind-numbingly menial. The jobs in the middle are being automated out of existence. Also, the jobs being created are what I would classify as unnecessary to our mutual survival.

All this strikes me as an unstable system. If the economy hits a bump in the road, we all pull back and stop buying those unnecessary things. It seems to me that an economy based on the unnecessary is one that will see much greater boom and bust cycles. If everyone were engaged in critical work, the cycles would be much shallower.

Taking the premise a step further, does this cause a problem for an economy based on merit. You contribute a lot so you are paid a lot. But what if George Jetson has the only job in an otherwise automated world?

I remember reading once about Henry Ford and a union boss walking through the factory. Ford was going on about some new machinery that had replaced some workers. The union guy asked Ford how many Fords those machines would buy.

(26-05-2013 04:25 PM)Thomas Wrote:  I teach and hold an advanced degree in Economics.
If you have any questions on economics I'll attempt to answer them.
Always willing to help if I can.
But please, I can't do your take home exam for you.
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03-03-2014, 09:19 PM
RE: Ask an Economist
(30-01-2014 10:16 AM)sadhana Wrote:  I have a question regarding exchange rates.

If a country's currency depreciates, this makes imports more expensive and exports more attractive. So that country's imports should decrease and exports should increase. This means that the demand for that country's currency increases (due to increased exports), and the supply of that country's currency decreases (decreased imports).
If this happens, the value of that currency should increase, leading to appreciation!

It seems to me that any depreciation in the value of a currency will automatically lead to appreciation.

Could you please explain this apparent contradiction?

Thanks!

There is a lagged equilibrating mechanism in exchange rates where only the prices and quantity of goods is considered. The gold standard and fixed exchange rate regimes relied on this mechanism to keep currency values within a band. Of course the many other factors that impact exchange rates may result in the reversal not being realized.
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03-03-2014, 09:25 PM
RE: Ask an Economist
(05-02-2014 09:07 AM)RDFinOP Wrote:  Hi Thomas,

I am guessing that this is a common question but I just don't know the right keywords for a search.

It seems to me that it just doesn't take all of us to provide necessary goods and services for all of us anymore. There is a sign outside Kansas City on I-70 that I remember passing as a kid. Then, it said, "One Kansas farmer feeds 28 people plus you." Over the years, that number has steadily increased. Now, they appear to have given up and it says "...more than 128 people...". My point is that it takes fewer farmers to feed us all.

I call this the George Jetson scenario. George is the sole employee of Spacely Sprockets and his only job is to come to work each day and push a button to activate the entirely automated factory. It seems to me that we are slowly progressing towards a George Jetson world.

Granted, we seem to be finding things for people to do but the jobs are either highly technical or mind-numbingly menial. The jobs in the middle are being automated out of existence. Also, the jobs being created are what I would classify as unnecessary to our mutual survival.

All this strikes me as an unstable system. If the economy hits a bump in the road, we all pull back and stop buying those unnecessary things. It seems to me that an economy based on the unnecessary is one that will see much greater boom and bust cycles. If everyone were engaged in critical work, the cycles would be much shallower.

Taking the premise a step further, does this cause a problem for an economy based on merit. You contribute a lot so you are paid a lot. But what if George Jetson has the only job in an otherwise automated world?

I remember reading once about Henry Ford and a union boss walking through the factory. Ford was going on about some new machinery that had replaced some workers. The union guy asked Ford how many Fords those machines would buy.

(26-05-2013 04:25 PM)Thomas Wrote:  I teach and hold an advanced degree in Economics.
If you have any questions on economics I'll attempt to answer them.
Always willing to help if I can.
But please, I can't do your take home exam for you.
Those surplus farmers are designing electronic gadgets and serving in other higher wage jobs. The standard of living is much higher than it was then as a result of the improvements in technology that have reduced the demand for manual labor. Yesterday's luxury is today's necessity. The prices for farm commodities were always very volatile, and boom and bust was a way of life.
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02-05-2014, 12:22 PM
RE: Ask an Economist
Hello,

can you explain to me what does "Financial bubble" means? I have read about it over the Internet but I am not sure what does the word itself means? It is usually related to assets/real esteates and its prices, fall of the intrerest rates which leads to rise in the investments etc.?

If you can, explain to me why is this happening? Why do ineterst rates change? Is it because of the change in monetary politics (there is more money in the sistem so the interest rates go up, and reverse)?

Thank you,

Adriana
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02-05-2014, 12:55 PM
RE: Ask an Economist
(02-05-2014 12:22 PM)Adriana Wrote:  Hello,

can you explain to me what does "Financial bubble" means? I have read about it over the Internet but I am not sure what does the word itself means? It is usually related to assets/real esteates and its prices, fall of the intrerest rates which leads to rise in the investments etc.?

If you can, explain to me why is this happening? Why do ineterst rates change? Is it because of the change in monetary politics (there is more money in the sistem so the interest rates go up, and reverse)?

Thank you,

Adriana

Welcome to the forum.

You've chosen quite an old thread to post/pose your question and the original poster (Thomas) has not been here for a while.

With luck, there maybe someone who can answer you.

Or try --> here.

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