Are economic recessions inevitable?

July 8, 2024 No Comments

A: The popular sentiment of financial analysts and many economists is that recessions are the inevitable result of the business cycle in a capitalist economy. The empirical evidence, at least on the surface, appears to strongly back up this theory. Recessions are highly frequent in

Are monopolies always bad?

July 8, 2024 No Comments

A: Monopolies over a particular commodity, market or aspect of production are considered good or economically advisable in cases where free market competition would be economically inefficient, the price to consumers should be regulated, or high risk and high entry costs inhibit initial investment in

Are perfect competition models in economics useful?

July 8, 2024 No Comments

A: Perfect competition is the name used for a set of false assumptions of mainstream economists in models that, without those assumptions, could not be applied to real data. In effect, these models create the framework necessary to make economics a positive empirical science. Most

Are there any exceptions to the law of demand in economics?

July 8, 2024 No Comments

A: There are different definitions of the law of demand in economics. The most common definition, which is adapted to fit macroeconomic models, shows an inverse correlation between the price and quantity demanded of a good. There are some real-world exceptions to the model-based definition,

Are there critics of the human development index (HDI)?

July 8, 2024 No Comments

A: The human development index (HDI) assigns numerical values to different countries as a measure of human prosperity. These values are derived using measures of health, education, standard of living and life expectancy. Countries with higher scores on the index are said to be better

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July 8, 2024 No Comments

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Can Internet companies be vertically integrated?

July 8, 2024 No Comments

A: Internet companies can be vertically integrated, just as traditional businesses vertically integrate to consolidate costs and to expand corporate reach in the market. Vertical integration occurs when a merchant or business begins to absorb the various levels above and below it in the distribution

Can state and local governments in the US run fiscal deficits?

July 8, 2024 No Comments

A: There is nothing about the nature of state and local governments that prevents them from running deficits in the same manner as the U.S. federal government. A fiscal deficit is brought about whenever government revenue fails to meet government expenditures – an accounting reality

Can the Efficient Market Hypothesis explain economic bubbles?

July 8, 2024 No Comments

A: The efficient market hypothesis (EMH) cannot explain economic bubbles because, strictly speaking, the EMH would argue that economic bubbles don’t really exist. The hypothesis’s reliance on assumptions about information and pricing are fundamentally at odds with the mispricing that drives economic bubbles. Economic bubbles

Consumer Confidence Vs. Consumer Sentiment

July 8, 2024 No Comments

A: Consumer confidence and consumer sentiment are very similar in that they both refer to the degree of confidence consumers feel about the overall economy and their personal financial state. Consumer confidence or sentiment helps predict the level of spending that consumers will engage in.

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