Ask an Economist
Welcome to Ask an Economist, a public service of the Department of Economics at Iowa State University, designed to answer your economic questions.
Our talented faculty and alumni can answer questions on a variety of economic topics to help you make more informed choices about your day-to-day decisions--or to just add a more reasoned voice when talk of the economy comes up around the dinner table.
Questions & Answers
Suppose that $5000 is the face value or redemption value (not the market price at which an investor may have bought it) of a 5-year TIPs. Suppose that it promises to pay an annual coupon payment of 1% or the amount of $50 at the time of purchase...
In principle, if most companies offering retirement plans switched to 401(k)'s simultaneously and no new stocks were issued (i.e., no change on the supply side of the stock market), I would expect a substantial increase in the stock prices, as...
Continue Reading AnswerIn a recent study of U.S.
Yes, there are definitely opportunities to export Iowa agricultural products. The U.S.
Roughly speaking, you need to compute the aggregate valuation of the students for each house. They should then rent the house for which the gap between their aggregate valuation and the house’s rent is the largest. They can then alloca
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Your proposed theory of wage setting appears to be consistent with the way that most economists would approach this issue. That is, most economists would accept that an individual’s wage is determined by the “human capital” – i.e., skills, e
It’s hard to answer your question since the situation in Britain is in flux. I can only mention a few considerations that may be relevant.
I’m not able to read (too small) the table. Regardless, I think the question relates to flipping stocks. Admittedly, my expertise is much more in commodity futures markets, but I believe the theory/rationale holds across markets.
There are government owned corporations or government backed corporations that directly lend to households or foster lending to households in other ways, for specific purposes.
The prospect of a mid-life career change would be daunting for anyone. In the end, you’ll have to make that difficult decision on your own. But I can give you a few tips on how you might begin to explore whether a career in economics i
I am guessing, by money, you mean income. Yes, the notion that $100 means something very different to people with varying incomes is a basic tenet of economics. The question is, what do people do with that $100.
US government debt is considered the safest asset in the world. The US borrows at a low interest rate while it lends at a higher interest rate, an “exorbitant privilege” sometimes resented by the foreigners.
Money refers to any asset that is widely used and accepted as a form of payment.
If the third world country has low and stable inflation, then it should not matter much; after all, there is a market exchange rate between say $1 and Indian rupees (these days, $1 = Rs.
Handbook of Agricultural Economics
Editors: Bruce L. Gardner and Gordon C. Rausser
Volume 1, Part A, Pages 3-741 (2001)
Agricultural Production
Volume 1, Part B, Pages 745-1209 (2001)
The money supply and the size of the central bank’s balance sheet are closely connected. Currently and historically, the sum of currency and bank reserves (a narrow definition of the money supply) account for almost all of the Fed’s liabilities...
1) There is no way to tell even approximately without a well calibrated model. As you suggested, very small profit margin trades will no longer be conducted. However, there are other, potentially much more important routes.
Should Uber and Airbnb be regulated? As a matter of fact, these companies, like any other in the United States, need to comply with a large number of regulations that cover for example workers compensation and health care.
It’s logically impossible to predict the bursting of a bubble. If it were possible, everyone would sell before the bubble burst. The selling would cause the bubble to burst earlier.
The output determines which sector a particular activity falls under. If the output is a good (product), then it falls under the manufacturing sector. If the output is a service, then it falls under the service sector.
A recession is a period of general economic decline, a contraction in the GDP for six months (two consecutive quarters) or longer. In that sense, they represent negative growth.
This policy change would redistribute income from lower to higher income households because the current income tax is progressive while the flat tax would not be as progressive, if at all.
Your understanding is correct that government debt is “good” in the sense that it serves as a useful tool for conducting both monetary and fiscal policy.