Inflation

My question is : 1)Why are prices generally higher for goods/services in London as opposed to Newcastle, or New York as opposed to San Fran? I understand that inflation is caused by excess demand/liquidity which causes the price of inputs such as raw materials to rise. But is the answer to the above question attributable t ...continues

Value Added

Yesterday i asked why it is that developed economies , or those which are gowing tend to produce high value products. I received the following "What value added means is not a higher price for certain goods. Value added means adding value to a raw product at its present stage of production and possibly taking that product t ...continues

Cournot and Bertrand Equilibria

Cournot and Bertrand Equilibria and its relation to tough and soft Commitments at the Masters Level.

What prices clear markets ... etc

I am looking for an explanation of the following issues and with advice on how to solve related problems, if you could device some step by step equative explanations it would be apreciated 1l What prices clear markets? 2. The basic Idea behaind the Solow model and its relationship with technological advance. What will add to ...continues

Wages

The wage rates for all different types of labour is determined by the market, but when companies start to give incentives such as a) stock options etc, or b) they push up their wages to incentivise workers does this not push up the wage rate for everyone? does this not then feed through to inflation? Thank you.

budget line

When the price of a good increases the quantity consumed will fall. The amount by which consumption falls however, depends on the both the substitution and income effects of a price change. Use an indifference curve/budget line diagram to explain this statement. Make sure you include a definition of all key terms in your answer.

Economic growth

Given that the economy grows (is allowed to grow) through the banking system and the creation of money through lending, if one market is down (i.e people are spending more on other goods) are we to assume that these other companies that are facing increased demand will borrow enough (to expand) to counter balance the amount the ...continues

International Monetary Economics PPP

Suppose that on January 1, 1999 the spot exchange rate was Yen/£=198. Over the year, the British inflation rate was 4%, and the Japanese inflation rate was 6%. i. What is the value of the spot rate (Yen/£) on December 31, 1999 implied by the relative PPP condition? ii. If the spot rate was Yen/£= 206 on December 31, 1 ...continues

Foreign Exchange

Consider a 1-year riskless Canadian bond and a 1-year riskless Japanese bonds. The interest rates on the Canadian bond and the Japanese bond are denoted by iCADt and iYent, respectively. The current spot rate is EYen/CADt, and the forward rate is FYen/CADt. The investors' expected spot rate in 1 year is Ee Yen/CADt+1. Assume t ...continues

Monetary and Portfolio Balance approach to exchange rate determination

What is the difference between the monetary approach and the portfolio-balance approach to exchange rate determination? What are the similarities between the two approaches? According to the portfolio balance approach to exchange rate determination, what will happen to the values of the domestic currency if the supply of dom ...continues