Ask an Economic Question

You are welcome to ask any questions on Economics. Though you might also like to try google custom search (top right) to see if the topic has been covered before.

I am looking to explain economic principles / ideas/ recent developments in economics. I can’t promise to answer, but will try if it meets the criteria below.

  • Please don’t ask me to do your coursework / assignment e.t.c. (I can usually tell if it is a homework question!)
  • Please don’t ask any maths calculations.
  • The question and answer will be published here so that everyone can see it (including your teacher!)
  • I aim to try and simplify economics; as a rough guide, I would aim at an understanding similar to a good British A Level student.
  • I am looking to explain economic principles/ideas/ recent developments in economics.
  •  I will answer as a new post, if you leave email address, I’ll usually send quick email. Check home page of blog for new post. With question and answers

Add comment at bottom of post.

mail(at)econoimcshelp.org

2,583 thoughts on “Ask an Economic Question”

  1. what is difference between Trade creation, deflection and diversion and why is it important in partial equilibrium modelling ?

  2. Can you please make a distinction between export supply elasticity and import elasticity of demand and why is it import to know the elasticities in international economics.

    • there is no direct disticntion as depending on the market the elastsisity of demand changes based upon each international market within supply and demand.
      If you want any further information email me at [email protected]

  3. I read about the ways to manage CA-deficit. I just have one question. can we improve CA-deficit through foreign reserves, in context of Pakistani economy?
    and how threatening is not letting the currency to depreciate naturally, as it does in most CA-deficit situations?

  4. what happens to the money supply under an fixed exchange rate regime when there is an export boom?

  5. explain the quantity Ir Fisher’s theory of money .To what extent is the theory relevant to LDs?

  6. The one-year Swiss interest rate is 6 percent. The one-year US interest rate is 10 percent. The spot rate of the Swiss franc is $0.50. The forward rate of the Swiss franc is $0.54. Is covered interest arbitrage feasible for US investors? Is it feasible for Swiss investors? Explain why each of these opportunities for covered interest arbitrage is or is not feasible. (Use an exhibit while explaining)

  7. Assume a US speculator sold a call option on Swiss francs for $0.01 per unit. The strike price was $0.36, and the spot rate at the time the option was exercised was $0.42. Assume the speculator did not obtain francs until the option was exercised. Also assume there are 62,500 units in a Swiss franc option. What was the net profit to the seller of the call option?

  8. my question is that if resever bank has gold but it worh is less than the curency whic is circulation so how stataebank can cntroll this gap if this gap too big

  9. My textbook says that high inflation “reduces the confidence of businesses and they are less likely to invest. This reduces employment opportunities and has an adverse effect on economic growth” ocr gcse economics
    Please can you explain how it reduces businesses confidence because it also says that “a low r8 of inflation may act as an incentive for businesses to invest as they will be able to increase their prices and profits” Thanks

    • Hey Timi,

      This is because high inflation means that prices are higher which discourages firms from investing and expanding. But, low interest rates mean that it is cheaper to borrow hence encouraging investment and growth.

      Regards,

      Jamie

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