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Reply 1980
After some thought, my conjecture is, maybe:

If everything works out as Keynes postulate, an injection by investment will first increase T (which is equal to C + I + G + X-M) (or Y, if using MV = PY), then V will increase in response, reflecting the 1st round of the multiplier effect, then, increasing C (which is in T or Y also), which in effect increases V again in the 2nd round of the multiplier process, henceforth increasing C again, and so on. Keynes argue that MV and PT (or PY) will in this way both be pushed to higher levels, reflecting economic growth.

Monetarists however think that a blatant injection of investment or government spending will increase T ( or Y) only once, because it is indeterminately inherently fixed if nothing is done to increase productivity; that this increase in I or G will then show up in V, which will also be rigid, in effect bouncing the increment to P, causing inflation.

Is this rubbish? Anyone here interested to join in the discussion or correct me?

Thanks...
(edited 13 years ago)
kaffee
After some thought, my conjecture is, maybe:

If everything works out as Keynes postulate, an injection by investment will first increase T (which is equal to C + I + G + X-M) (or Y, if using MV = PY), then V will increase in response, reflecting the 1st round of the multiplier effect, then, increasing C (which is in T or Y also), which in effect increases V again in the 2nd round of the multiplier process, henceforth increasing C again, and so on. Keynes argue that MV and PT (or PY) will in this way both be pushed to higher levels, reflecting economic growth.

Monetarists however think that a blatant injection of investment or government spending will increase T ( or Y) only once, because it is indeterminately inherently fixed if nothing is done to increase productivity; that this increase in I or G will then show up in V, which will also be rigid, in effect bouncing the increment to P, causing inflation.

Is this rubbish? Anyone here interested to join in the discussion or correct me?

Thanks...

It sounds like you have the right idea, but what exactly have you defined as 'T'? 'T' is usually used for taxation but it looks like you've used it for something else.
Hi, I'm a 2d year undergraduate at LSE and I am stuck on a question. I was hoping I could get some help from here. Or at least a tip :smile:

So, the question is:

Production and expenditure approaches to GDP: Consider three firms: firm A, a mining enterprise; firm B, a steelmaker; firm C, a car maker. Calculate the GDP of this economy by the product and the expenditure approach, based on the following assumptions.

All values are in euros. Firm A extracts 10 million euros’ worth of ore. Firm B produces steel sheet worth 25 million, having bought and used all the ore produced by firm A. Firm C has manufactured 75 million euros’ worth of vehicles and sold them all to households, having purchased steel sheets for 20 million from firm B. In addition, Firm C imported engines from abroad for 20 millions euro, and purchased 10 million worth of robots also from abroad.

Just incase terminology is different for you guys the product approach is the sum of value added and the expenditure approach follows the formula c+g+i+nx

I get 45 for the added value part and 50 for the expenditure. It's frustrating me as I've been trying for quite a while.

Thanks a lot
SeanChamp
Hi, I'm a 2d year undergraduate at LSE and I am stuck on a question. I was hoping I could get some help from here. Or at least a tip :smile:

So, the question is:

Production and expenditure approaches to GDP: Consider three firms: firm A, a mining enterprise; firm B, a steelmaker; firm C, a car maker. Calculate the GDP of this economy by the product and the expenditure approach, based on the following assumptions.

All values are in euros. Firm A extracts 10 million euros’ worth of ore. Firm B produces steel sheet worth 25 million, having bought and used all the ore produced by firm A. Firm C has manufactured 75 million euros’ worth of vehicles and sold them all to households, having purchased steel sheets for 20 million from firm B. In addition, Firm C imported engines from abroad for 20 millions euro, and purchased 10 million worth of robots also from abroad.

Just incase terminology is different for you guys the product approach is the sum of value added and the expenditure approach follows the formula c+g+i+nx

I get 45 for the added value part and 50 for the expenditure. It's frustrating me as I've been trying for quite a while.

Thanks a lot

Could you go through how you got 45 and 50? I don't get either of those numbers (though the numbers I get don't match so clearly I haven't got it right either).
Hi
I'm doing Economics for GCSE and I don't get what an extension and contraction is in the demand or supply curve. Please can someone tell me what they are.

Thanks
Why People Believe That The Market System Is The Best Method Of Allocating scarce Resources and thereby encouraging a positive ‘investment climate’? Explain your reasoning. 500 words any specific websites or books to be referred
Doing A2 economics, I need to write about export-led growth strategies. Two questions;
1. Is FDI a part of export-led? So for example can I use China and India as examples?
2. Any developing countries that are good examples of using export-led growth strategies? Not the BRICs, any other countries.
Thanks :smile:
Reply 1987
I am re-taking f581 for a better grade and i dont know how to go about revsing for it this time, because am not being taught it, its just left to me to do all the revision :s-smilie: ideas pls??
Reply 1988
T=10-2U+P
Where U is a price of a product and P is the price of another product.
P = 2

a) Suppose U=1, PED?

b) Suppose U=1, Cross PED?

c) Is the good a substitute or a compliment good?

The good is a compliment good as we can see from the addition of it.

d) Suppose P=2, then what is PED? and what is cross PED?

Don't get the last bit at all, need help please.

Quote me please.
Original post by SPMS
T=10-2U+P
Where U is a price of a product and P is the price of another product.
P = 2

a) Suppose U=1, PED?

b) Suppose U=1, Cross PED?

c) Is the good a substitute or a compliment good?

The good is a compliment good as we can see from the addition of it.

d) Suppose P=2, then what is PED? and what is cross PED?

Don't get the last bit at all, need help please.

Quote me please.


Well, what do you have so far? I don't really want to do all of it myself but if you post your working so far I could try to show you where to go from there.
Original post by alex_hk90
Well, what do you have so far? I don't really want to do all of it myself but if you post your working so far I could try to show you where to go from there.


Cerrith just graduated from college and landed his first ‘real job’, which pays
£23,000 a year. In 10 years, what will he need to earn to maintain the same
purchasing power if inflation averages 4%?

Know this one? Method...











0
Original post by The_Timepasser
Cerrith just graduated from college and landed his first ‘real job’, which pays
£23,000 a year. In 10 years, what will he need to earn to maintain the same
purchasing power if inflation averages 4%?

Know this one? Method...

0


Inflation means prices of general goods are going up. So each year he would be able to buy 4% less "stuff" (despite having the same amount of nominal money).

To ensure he keeps the same purchasing power his wages will need to rise at the same rate as inflation.

So see what a 4% rise (compounded for 10 years) will bring his wages to.
Original post by The_Timepasser
Cerrith just graduated from college and landed his first ‘real job’, which pays
£23,000 a year. In 10 years, what will he need to earn to maintain the same
purchasing power if inflation averages 4%?

Know this one? Method...


Surely it's just (£23,000)*(1.04^10)?
Original post by alex_hk90
Surely it's just (£23,000)*(1.04^10)?


Yep, just wanted to confirm. Thanks guys.
Original post by alex_hk90
Surely it's just (£23,000)*(1.04^10)?

Original post by London Prophet
.



Sorry to bother u lol but this one's harder...the second part.

Phil and Susie just got married and received £30,000 in cash gifts for their grand
wedding. If they place half of this money in a fixed rate investment earning 12%
compounded annually, how much will they have on their twenty-fifth anniversary?
Would the future value be larger or smaller if the compounding period was 6 months
(interests are compounding every 6 months instead of annually)? How much more or
less would they have earned with this shorter compounding period?
(edited 13 years ago)
Reply 1995
Why have economists coined terms such as 'merit' and 'demerit' goods and thus made a generalisation about every consumer of these goods?

Yes, some people will not be fully aware of the benefits of certain things, but those who took the liberty to find out will and so i'm going to struggle to use these two terms in my forthcoming exam, because i don't agree with them at all.
Original post by damos92
Why have economists coined terms such as 'merit' and 'demerit' goods and thus made a generalisation about every consumer of these goods?

Yes, some people will not be fully aware of the benefits of certain things, but those who took the liberty to find out will and so i'm going to struggle to use these two terms in my forthcoming exam, because i don't agree with them at all.


I don't follow your objection.

Merit Good = has social benefits above and beyond the private benefits
Demerit Good = has social costs above and beyond the private costs

It makes little generalisation about the consumer.
Original post by The_Timepasser
Sorry to bother u lol but this one's harder...the second part.

Phil and Susie just got married and received £30,000 in cash gifts for their grand
wedding. If they place half of this money in a fixed rate investment earning 12%
compounded annually, how much will they have on their twenty-fifth anniversary?
Would the future value be larger or smaller if the compounding period was 6 months
(interests are compounding every 6 months instead of annually)? How much more or
less would they have earned with this shorter compounding period?


I'll give you a clue. If it's 12% annually compounded every 6 months then you're calculating a 6% compound increase every month - you can work out the rest.
Original post by London Prophet
I'll give you a clue. If it's 12% annually compounded every 6 months then you're calculating a 6% compound increase every month - you can work out the rest.


I think you mean "every 6 months". And it's exactly the same principle as the annual case.
Reply 1999
Original post by London Prophet
I don't follow your objection.

Merit Good = has social benefits above and beyond the private benefits
Demerit Good = has social costs above and beyond the private costs

It makes little generalisation about the consumer.


I was taught today that Merit goods are goods, such as Education, in which the receiver isn't truly aware of the full long term benefits their consumption of the good will offer.

Conversely, i was taught that Demerit goods are goods, such as cigarettes, which do more damage than people realise.

I've unfortunately lost my voice at the moment so i couldn't say anything, but i was sort of thinking 'wth' when my lecturer was saying all this stuff.

It just got me thinking that economists assume that most, if not all consumers are ignorant and uneducated. I guess i was mistaken, ironically through the education i received today.

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