Paizo Top Nav Branding
  • Hello, Guest! |
  • Sign In |
  • My Account |
  • Shopping Cart |
  • Help/FAQ
About Paizo Messageboards News Paizo Blog Help/FAQ
Pathfinder Roleplaying Game
Pathfinder Society

Pathfinder Beginner Box

Pathfinder Adventure Card Game

Pathfinder Comics

Pathfinder Legends

Economics Literacy Quiz


Off-Topic Discussions

1 to 50 of 70 << first < prev | 1 | 2 | next > last >>

A pod of economics-types got together and made this 20 question quiz. They had a bunch of MBA grad students take it to "calibrate" it.

They seem to believe that if you score:

16 or higher, then you are "Economically Literate".

less than 16, and they request you get in contact with them personally, because they have some land for sale in Florida, and a few bridges in New York. They promise to let you pay very reasonable prices..

========================================================

1. If the government levied a tax of $1 on every pair of shoes sold, which of the following would most likely result?

A. Suppliers would sell more and charge a higher price.
B. Consumers would pay a higher price for shes, and probably buy a smaller quantity.
C. Consumers would pay a higher price, and as a result, suppliers would make larger profits.
D. Suppliers would increase the quantity sold to offset the taxes paid to the government.

Answer:

Spoiler:
B.

----------

2. If the available supply of a product increases at the same time the demand for it falls, in the absence of counteracting forces its price will:

A. Rise
B. Fall
C. Stay the same
D. Be indeterminate

Answer:

Spoiler:
B.

----------

3. The long lines of consumers waiting outside many stores in Cuba tell us that many consumer goods there are probably:

A. Not in demand
B. Priced too low
C. In great supply
D. Priced too high

Answer

Spoiler:
B.

----------

4. In a market econommy, what determines how many workers and machines are employed in one industry vs. another?

A. Social custom
B. The exchange value of money
C. The ways consumers spend their income
D. The average age, education and training of people in a nation's labor force.

Answer

Spoiler:
C.

----------

5. The price system in a market economy reacts to a shortage of a product by:

A. Raising its price and producers' profits
B. Lowering its price and producers' profits
C. Raising its price, but lowering producers' profits
D. Lowering its price, but increasing producers' profits

Answer

Spoiler:
A.

----------

6. Which of the following tends to reduce consumer spending?

A. A decrease in consumer incomes
B. An increase in business investment
C. A decrease in personal income taxes
D. An increase in government payments to individuals

Answer

Spoiler:
A.

----------

7. At full employment, to slow down price increases during the next year of so, the government should:

A. Raise taxes
B. Increase governmental spending
C. Increase loans to promising college students
D. Stimulate business investment in more efficient machinery

Answer

Spoiler:
A.

----------

8. Changes in workers' real wages (the purchasing power of their money wages) are calculated by comparing changes in money wages with changes in the:

A. Cost of living
B. Rate of business profits
C. Level of national wealth
D. Volume of credit and currency

Answer

Spoiler:
A.

----------

9. If the amount of money circulating in the United States is rapidly increased at a time when there is full employment, what would be most likely to happen:

A. The prices of many goods and services would rise
B. We would all be better of because we could buy more
c. Business would immediately try to slow down production
D. Interest rates on loans would fall immediately, and for the next few years.

Answer

Spoiler:
A.

----------

10. Over the long run, what would be the best way of increasing the amount of goods and services the nation can produce?

A. Pass laws to prevent workers from going on strike
B. Raise everyone's income so that we all have more money to spend
C. Provide better technology, machinery and education for workers
D. Have the government subsidize businesses in emerging high-technology industries

Answer

Spoiler:
C.

----------

11. Economists often disagree in their suggested solutions to social problems. The disagreements arise largely because:

A. Economics is not a science
B. Economic "laws" -- such as the law of supply and demand -- change over time
C. Economic theories and models are rarely tested with "real-world" data.
D. Economists often disagree about what current problems are most important.

Answer

Spoiler:
D.

----------

12. "Everyone knows that baseball is far less necessary than food and steel, yet ballplayers are paid a lot more than farmers and steelworkers." Why?

A. Ballplayers are really entertainers, rather than producers
B. There are fewer professional ballplayers than farmers or steelworkers
C. Ballplayers have more skills and can do more things than people who get less pay
D. Professional ballplayers are more scarce relative to the demand for their services

Answer

Spoiler:
D.

----------

13. All of the following contribute to high levels of productivity except:

A. The skill and work habits of labor
B. Technological and managerial advances
C. The accumulation of a large stock of capital goods
D. Tariff protection from competition by low-wage foreign workers

Answer

Spoiler:
D.

----------

14. To analyze the efficiency of a corporation's operation, its profits should be viewed in relationship to:

A. Sales and revenue
B. Stockholders' equity
C. Assets employed in the business
D. All of the above

Answer

Spoiler:
D.

----------

15. In a basically private-enterprise economy, which tax is most likely to alter consumer choice among alternative products?

A. A general sales tax
B. A personal income tax
C. A tax on business profits
D. An excise tax on particular products

Answer

Spoiler:
D.

----------

16. If a high tariff were placed on automobiles shipped into the United States:

A. Foreigners would buy fewer goods from the United States
B. In the long run, U.S. unemployment rates would be lower
C. The price of automobiles would go down in the United States
D. Profits and employment levels in the U.S. auto industry would fall.

Answer

Spoiler:
A.

----------

17. Specialized production and trade within a nation or between nations will have which of the following effects?

A. Economic instability will be reduced
B. A larger total quantity of goods and services will be produced
C. The economic independence of the nations and individuals will be increased
D. Costs of production will rise, but not proportionately in all industries or nations

Answer

Spoiler:
B.

----------

18. Government policies can be used to increase economic efficiency by:

A. Providing national defense
B. Taxing 'external diseconomies' such as air polution
C. Subsidizing 'external economies' such as basic research on contagious diseases
D. All of the above

Answer

Spoiler:
D.

----------

19. A market economy may be operating efficiently when:

A. Some product prices are falling drastically
B. Some business firms are making exceptionally high profits
C. Both A and B
D. Neither A nor B

Answer

Spoiler:
C.

----------

20. Large federal-budget deficits:

A. Increase U.S. exports
B. Decrease private savings in the United States
C. Put upward pressure on U.S. interest rates
D. Weaken the dollar against other currencies

Answer

Spoiler:
C.

========================================================

Osirion

Pathfinder Adventure Path Subscriber

Interesting. I lost track, but think I got like 15 correct. So, I guess I'm not "economically literate" according to the folks that put this thing together. I guess that's why I became an engineer.

Qadira

So if you are an engineer you are interested in my idea for steel manufacture using Charcoal as the Mesh into which iron, silica, and sulphur are deposited through either superfluid flow or gaseous vapour deposition.

As to the test...I found it annoying. The reasons for an answer seem based on mathematical models in keeping with the text book. But if for example I saw a cue of Cubans outside a shop, my assumption would not be that the commodity was under priced, My assumption would be that it is either A) In Shortage and/or B) Rationed, Because that is what we saw 25 years ago when the Soviet Union fell. So the Textbook Answer is not in keeping with realities of Human Behavior.

Osirion

Pathfinder Adventure Path Subscriber
yellowdingo wrote:
So if you are an engineer you are interested in my idea for steel manufacture using Charcoal as the Mesh into which iron, silica, and sulphur are deposited through either superfluid flow or gaseous vapour deposition.

I'm a mechanical engineer who works on boilers, valves, and steam piping. I could give two craps less about steel manufacture, as long as it follows ASME specs.

Qadira

Aberzombie wrote:
yellowdingo wrote:
So if you are an engineer you are interested in my idea for steel manufacture using Charcoal as the Mesh into which iron, silica, and sulphur are deposited through either superfluid flow or gaseous vapour deposition.
I'm a mechanical engineer who works on boilers, valves, and steam piping. I could give two craps less about steel manufacture, as long as it follows ASME specs.

So you are into Steampunk...

Osirion

Pathfinder Adventure Path Subscriber
yellowdingo wrote:
Aberzombie wrote:
yellowdingo wrote:
So if you are an engineer you are interested in my idea for steel manufacture using Charcoal as the Mesh into which iron, silica, and sulphur are deposited through either superfluid flow or gaseous vapour deposition.
I'm a mechanical engineer who works on boilers, valves, and steam piping. I could give two craps less about steel manufacture, as long as it follows ASME specs.
So you are into Steampunk...

I suppose you could say that. More though just keeping old s@#! going. Except for the piping and valves thing, since they use that stuff everywhere.


Interesting. I think I got all but two right (it was hard to keep track all the way through), though I don't consider myself to be particularly economically literate.

I also thought many of the questions telegraphed the answer pretty heavily, so I suspect I got some right by guessing when I didn't actually *know* the answer.


Pathfinder Adventure Path Charter Subscriber
yellowdingo wrote:

So if you are an engineer you are interested in my idea for steel manufacture using Charcoal as the Mesh into which iron, silica, and sulphur are deposited through either superfluid flow or gaseous vapour deposition.

As to the test...I found it annoying. The reasons for an answer seem based on mathematical models in keeping with the text book. But if for example I saw a cue of Cubans outside a shop, my assumption would not be that the commodity was under priced, My assumption would be that it is either A) In Shortage and/or B) Rationed, Because that is what we saw 25 years ago when the Soviet Union fell. So the Textbook Answer is not in keeping with realities of Human Behavior.

One of the common reasons that something would be rationed or in shortage is that the price is too low. In the Soviet Union you would have food shortages because it would cost more for the farmer to get the food to the store than the price it could be sold for. I also dispute some questions, but shortages for many consumer goods would be that the central bureaucracy set the price too low.

Similar thing with the Ipad2, Apple could easily have set the price higher, and still would have sold out. But they want to undercut the competition by keeping the price lower....

Except that wasn't the "real" price was it? It was that price...plus wait in line all night or risk some guy buying them all up and shipping them overseas for a profit.

And if you didn't get one? Then the price is the Apple listed price plus a wait of 4+ weeks for more to come in stock.


NPC Dave wrote:
I also dispute some questions, ...

Which ones?

Taldor

2 people marked this as a favorite.
Pathfinder Comics Subscriber; Pathfinder Adventure Path, Campaign Setting, Companion, Modules, Tales Subscriber

Isn't economics, like most things involving humans, incredibly context dependant?

None of these questions give enough context to provide an effective answer.

Also, these people know very little about testing - multiple choice in this manner is easy for people with little economic skill to negotiate effectively due to good language skills (worked for me).

So, my answer is: the test is poorly constructed and tells us nothing.

What do I win.


I passed it with only 3 wrong but I don't think my answers were wrong.

I believe that investing in technology is the best answer for our economic problems.

Question 10 in my opinion is wrong,however tghat is just MY opinon.

As far as question 20 about large federal deficts, that one is and always will be "weaken the US dollar" I don't catre what the right answer is mine is the correct one no matter how you slice it.
Any time you owe more than your worth something is very very wrong. It's bad enough our houseing market is underwater do we really want our entire economy to be in the same shape?

It was an interesting littel quiz.

Shadow Lodge

I scored an 18 missing questions 12 and 19. Not surprising given that I am a free market capitalist who voted for Obama.

Taldor

Pathfinder Adventure Path, Campaign Setting, Companion Subscriber

18/20. Not horrible. :)


Got interrupted mid test -I got either a 14 or 15. I too took some exception to some of the answers to the questions, they seemed a bit loaded.


GeraintElberion wrote:

Isn't economics, like most things involving humans, incredibly context dependant?

None of these questions give enough context to provide an effective answer.

Also, these people know very little about testing - multiple choice in this manner is easy for people with little economic skill to negotiate effectively due to good language skills (worked for me).

So, my answer is: the test is poorly constructed and tells us nothing.

What do I win.

semi +1


Freehold DM wrote:
Got interrupted mid test -I got either a 14 or 15. I too took some exception to some of the answers to the questions, they seemed a bit loaded.

Which ones?

Taldor

7. At full employment, to slow down price increases during the next year of so, the government should:

A. Raise taxes
B. Increase governmental spending
C. Increase loans to promising college students
D. Stimulate business investment in more efficient machinery

Answer

Spoiler: E none of the above (although I got it correct because I knew what the test wanted me to say)

I passed the test because I know what it wants me to say, but I don't think that all of the test questions are correct, still I guess in a roundabout way of saying okay you know something about the subject and aren't going to Alfred E. Newman the discussion I guess it's okay.


16/20

Not a very good test of micro-economic literacy. Where are basic questions about supply/demand vs. quantity supplied/demanded?

It also seems kinda slanted toward a particular ideology on the macro front.

Questions 20 seems particularly problematic to me...aren't C and D just different ways of saying the same thing (or any they saying C is better because it only mentions "upward pressure," rather than outcome)?

Meh.


2 people marked this as a favorite.
Pathfinder Adventure Path Charter Subscriber
Grand Magus wrote:
NPC Dave wrote:
I also dispute some questions, ...

Which ones?

Lastknight already pointed out number 7.

The basis for their answer to this question is the Phillips curve.

The problem is that the assumption that there is an inverse relationship between unemployment and inflation is false. This should have been acknowledged back in the 70's during stagflation, but that is ignored because politicians love to spend money and so economists who ignore reality in favor of justifying what politicians will do anyway get rewarded with cushy academic positions.

Prices rising could be caused by a significant change in the supply/demand ratio for a given product or service. I suspect that some of the rise in food prices are caused by increase demand from people in countries like India and China who are now wealthy enough to buy more and better quality food. When you go from poor to middle class or rich one of the first things you do is tend to get more food of the kind you like.

On the supply side, food supply is affected by food production as well as how much goes into biofuels instead.

But most economists won't admit that prices rising can also be caused by deliberate monetary inflation...that is the central bank in most countries creates new money out of thin air...in order to benefit the ruling class and wealthy elite who get access to the new money first...and enrich themselves while people in the middle class and poor see prices already rising by the time the money trickles down to them...if at all.

Until people realize that the Federal Reserve in the USA and central banks in other countries are ripping us off, this process will continue.


bugleyman wrote:


Questions 20 seems particularly problematic to me...aren't C and D just different ways of saying the same thing (or any they saying C is better because it only mentions "upward pressure," rather than outcome)?

Meh.

Not necessarily. There will be upward pressure on interest rates as the debt becomes more risky and investors demand more of a return to compensate them for that risk but the very fact that interest rates are going up puts upward pressure on the dollar itself because acquiring them and investing them gives better returns.

Hence whether the dollar falls with sovereign debt or not is somewhat open ended. A good example of this is Japan which saw the Yen rise dramatically even as sovereign debt exploded to more then twice the levels that America currently has. Simply put investors believed that Japan, even with very high debt, would not collapse so they where willing to invest in Japan.

America in particular should show this sort of behavior because many investors believe that if the US actually collapsed capitalism itself, at least as we know it, would collapse. Hence one might as well cash in on good interest rates in America since if the worst really does come to pass all your little pieces of paper will be worthless anyway. I.e. trying to hide ones money from an American collapse won't work anyway.


NPC Dave wrote:
Grand Magus wrote:
NPC Dave wrote:
I also dispute some questions, ...

Which ones?

Lastknight already pointed out number 7.

The basis for their answer to this question is the Phillips curve.

The problem is that the assumption that there is an inverse relationship between unemployment and inflation is false. This should have been acknowledged back in the 70's during stagflation, but that is ignored because politicians love to spend money and so economists who ignore reality in favor of justifying what politicians will do anyway get rewarded with cushy academic positions.

Prices rising could be caused by a significant change in the supply/demand ratio for a given product or service. I suspect that some of the rise in food prices are caused by increase demand from people in countries like India and China who are now wealthy enough to buy more and better quality food. When you go from poor to middle class or rich one of the first things you do is tend to get more food of the kind you like.

On the supply side, food supply is affected by food production as well as how much goes into biofuels instead.

But most economists won't admit that prices rising can also be caused by deliberate monetary inflation...that is the central bank in most countries creates new money out of thin air...in order to benefit the ruling class and wealthy elite who get access to the new money first...and enrich themselves while people in the middle class and poor see prices already rising by the time the money trickles down to them...if at all.

Until people realize that the Federal Reserve in the USA and central banks in other countries are ripping us off, this process will continue.

Is fractional reserve banking also to blame because banks create money through that as well. Why does the government get all the blame or are you taking an anti-government slant and another viewpoint.


1 person marked this as a favorite.
Pathfinder Adventure Path Charter Subscriber

Another question which I find utterly misleading and self-serving, is this one.

11. Economists often disagree in their suggested solutions to social problems. The disagreements arise largely because:

A. Economics is not a science
B. Economic "laws" -- such as the law of supply and demand -- change over time
C. Economic theories and models are rarely tested with "real-world" data.
D. Economists often disagree about what current problems are most important.

My comments-

A) Economics is not an empirical science. That means economic theories are not determined to be true by experimental verification. Economics is a science in the sense that mathematics is a science, logical deductions based on indisputable axioms. Economics can use history to demonstrate how the theory works, but doesn't use experiments to falsify. Keynesians in particular like to pretend it is empirical science but ironically never allow any possible result to demonstrate their theory is false.

C) Probably should define "rarely". Often times data which fits the theory is highlighted while data that contradicts the theory is ignored...of course a lot of empirical science has this problem too so I shouldn't overly pick on economists for this fault.

As an example for A) and C), Keynesians claim that stimulus packages will end recessions...and every case where it doesn't end the recession...they claim not enough money was used in the stimulus. Is there any amount of money that could be spent that would verify the theory is false if it doesn't work? How much money is that? $10 trillion? $100 trillion? $100 quintillion?

D) Completely self-serving tripe.

If the answer isn't A)do they mean empirical or not? or C)define "rarely", then the answer is E).

E) Economics as taught in government accredited college textbooks is a confusing mess of half-truths and falsehoods which doesn't make sense as a whole.


Pathfinder Adventure Path Charter Subscriber
doctor_wu wrote:
NPC Dave wrote:
Grand Magus wrote:
NPC Dave wrote:
I also dispute some questions, ...

Which ones?

Lastknight already pointed out number 7.

The basis for their answer to this question is the Phillips curve.

The problem is that the assumption that there is an inverse relationship between unemployment and inflation is false. This should have been acknowledged back in the 70's during stagflation, but that is ignored because politicians love to spend money and so economists who ignore reality in favor of justifying what politicians will do anyway get rewarded with cushy academic positions.

Prices rising could be caused by a significant change in the supply/demand ratio for a given product or service. I suspect that some of the rise in food prices are caused by increase demand from people in countries like India and China who are now wealthy enough to buy more and better quality food. When you go from poor to middle class or rich one of the first things you do is tend to get more food of the kind you like.

On the supply side, food supply is affected by food production as well as how much goes into biofuels instead.

But most economists won't admit that prices rising can also be caused by deliberate monetary inflation...that is the central bank in most countries creates new money out of thin air...in order to benefit the ruling class and wealthy elite who get access to the new money first...and enrich themselves while people in the middle class and poor see prices already rising by the time the money trickles down to them...if at all.

Until people realize that the Federal Reserve in the USA and central banks in other countries are ripping us off, this process will continue.

Is fractional reserve banking also to blame because banks create money through that as well. Why does the government get all the blame or are you taking an anti-government slant and another viewpoint.

Central banks are set up to support and protect fractional reserve banking from the bust part of the boom and bust cycle that they cause...by lending money out to the big banks when they get in over their head through defaults.

Fractional reserve banking in and of itself causes an inflationary boom cycle and then a deflationary bust cycle...without a central bank, when defaults start happening and people get nervous about a bank's stability and start demanding their deposits back, banks have to call in loans and pay out more currency. The very act of inflation during the boom cycle now works in reverse...the more defaults and more loans called in and paid out in currency the more you get deflation. The FDIC was created to avoid bank runs but of course we are now seeing the long-term effects of this workaround.

As far as who gets the blame, there is plenty to go around. The rich for setting up the central bank scheme to protect themselves, the government for granting central banks monopolies on making money, and the average citizen(sucker) who thinks he or she is going to come out ahead through inflation by putting little money down on a house and use it as a personal piggy bank as the value goes up...that worked well for awhile until 2006-2007. Now they are learning that their wealth was nothing but a mirage, an expensive one when factoring in the inflated property taxes and insurance premiums they are still paying...if they haven't already been evicted in foreclosure.

Taldor

NPC Dave wrote:

Another question which I find utterly misleading and self-serving, is this one.

11. Economists often disagree in their suggested solutions to social problems. The disagreements arise largely because:

A. Economics is not a science
B. Economic "laws" -- such as the law of supply and demand -- change over time
C. Economic theories and models are rarely tested with "real-world" data.
D. Economists often disagree about what current problems are most important.

My comments-

A) Economics is not an empirical science. That means economic theories are not determined to be true by experimental verification. Economics is a science in the sense that mathematics is a science, logical deductions based on indisputable axioms. Economics can use history to demonstrate how the theory works, but doesn't use experiments to falsify. Keynesians in particular like to pretend it is empirical science but ironically never allow any possible result to demonstrate their theory is false.

C) Probably should define "rarely". Often times data which fits the theory is highlighted while data that contradicts the theory is ignored...of course a lot of empirical science has this problem too so I shouldn't overly pick on economists for this fault.

As an example for A) and C), Keynesians claim that stimulus packages will end recessions...and every case where it doesn't end the recession...they claim not enough money was used in the stimulus. Is there any amount of money that could be spent that would verify the theory is false if it doesn't work? How much money is that? $10 trillion? $100 trillion? $100 quintillion?

D) Completely self-serving tripe.

If the answer isn't A)do they mean empirical or not? or C)define "rarely", then the answer is E).

E) Economics as taught in government accredited college textbooks is a confusing mess of half-truths and falsehoods which doesn't make sense as a whole.

What's funny is I didn't comment on this but I got this wrong because my thinking was pretty much exactly the same as NPC daves in regards to A so I chose A


17/20


I found this new site: http://www.tutor2u.net/quiz/economics/default.asp

I took quiz #1 and got 9/10. I missed #9. O.o


I made 20/20, but I had to stop and think about a couple of them.


I needs a refressher course.


This and This

Andoran

Aberzombie wrote:
Interesting. I lost track, but think I got like 15 correct. So, I guess I'm not "economically literate" according to the folks that put this thing together. I guess that's why I became an engineer.

15/20 at 2:07 in the morning. Wheee! (High on sleep-lack/life.)

Andoran

yellowdingo wrote:
As to the test...I found it annoying. The reasons for an answer seem based on mathematical models in keeping with the text book. But if for example I saw a cue of Cubans outside a shop, my assumption would not be that the commodity was under priced, My assumption would be that it is either A) In Shortage and/or B) Rationed, Because that is what we saw 25 years ago when the Soviet Union fell. So the Textbook Answer is not in keeping with realities of Human Behavior.

I thought that question foolishly tried to ignore the connotations of "Cuba," but it might have been done because Cuba is a mini-economy without a lot of outside influence.

Aberzombie wrote:
yellowdingo wrote:
So if you are an engineer you are interested in my idea for steel manufacture using Charcoal as the Mesh into which iron, silica, and sulphur are deposited through either superfluid flow or gaseous vapour deposition.
I'm a mechanical engineer who works on boilers, valves, and steam piping. I could give two craps less about steel manufacture, as long as it follows ASME specs.

So you're an engineer who works with engines?

Yeah, not necessarily engines, I know.

Andoran

NPC Dave wrote:
Grand Magus wrote:
NPC Dave wrote:
I also dispute some questions, ...

Which ones?

Lastknight already pointed out number 7.

The basis for their answer to this question is the Phillips curve.

The problem is that the assumption that there is an inverse relationship between unemployment and inflation is false. This should have been acknowledged back in the 70's during stagflation, but that is ignored because politicians love to spend money and so economists who ignore reality in favor of justifying what politicians will do anyway get rewarded with cushy academic positions.

Prices rising could be caused by a significant change in the supply/demand ratio for a given product or service. I suspect that some of the rise in food prices are caused by increase demand from people in countries like India and China who are now wealthy enough to buy more and better quality food. When you go from poor to middle class or rich one of the first things you do is tend to get more food of the kind you like.

On the supply side, food supply is affected by food production as well as how much goes into biofuels instead.

But most economists won't admit that prices rising can also be caused by deliberate monetary inflation...that is the central bank in most countries creates new money out of thin air...in order to benefit the ruling class and wealthy elite who get access to the new money first...and enrich themselves while people in the middle class and poor see prices already rising by the time the money trickles down to them...if at all.

Until people realize that the Federal Reserve in the USA and central banks in other countries are ripping us off, this process will continue.

It seemed to me that the question included "full employment" to control, not to consciously say that prices inflate with more employment (though a scientific test would have left that part out). Anyway, the question was asking what an interfering government should do, whether or not you think the government should interfere.

You are correct: Some of the rise in food prices comes from India and China and biofuels, but a lot derives from general inflation. I disagree with some of your conclusions, however.


Gark the Goblin wrote:
NPC Dave wrote:
Grand Magus wrote:
NPC Dave wrote:
I also dispute some questions, ...

Which ones?

Lastknight already pointed out number 7.

The basis for their answer to this question is the Phillips curve.

The problem is that the assumption that there is an inverse relationship between unemployment and inflation is false. This should have been acknowledged back in the 70's during stagflation, but that is ignored because politicians love to spend money and so economists who ignore reality in favor of justifying what politicians will do anyway get rewarded with cushy academic positions.

Prices rising could be caused by a significant change in the supply/demand ratio for a given product or service. I suspect that some of the rise in food prices are caused by increase demand from people in countries like India and China who are now wealthy enough to buy more and better quality food. When you go from poor to middle class or rich one of the first things you do is tend to get more food of the kind you like.

On the supply side, food supply is affected by food production as well as how much goes into biofuels instead.

But most economists won't admit that prices rising can also be caused by deliberate monetary inflation...that is the central bank in most countries creates new money out of thin air...in order to benefit the ruling class and wealthy elite who get access to the new money first...and enrich themselves while people in the middle class and poor see prices already rising by the time the money trickles down to them...if at all.

Until people realize that the Federal Reserve in the USA and central banks in other countries are ripping us off, this process will continue.

It seemed to me that the question included "full employment" to control, not to consciously say that prices inflate with more employment (though a scientific test would have left that part out). Anyway, the question was...

Question 7 was about the basic mechanics of Monetary "fiddling around." :-)

(Read 'price increases' as 'inflation'.)

At full employment:
G takes money out => interest rates rise => less current-period investment (spending) => inflationary drag, or decrease

At under employment:
G puts money in => interest rates fall => more current-period investment (spending) => inflation free to increase

----------

So, given the answer choices the only one taking money out of
the system is Taxes (thus putting a drag on inflation i.e., price
increases.) The other answer choices have G putting money back
into the economy at a time of full employment.

Edit: "G puts money in" can also be done via a stimulus package.

Andoran

Tensor wrote:
Gark the Goblin wrote:
NPC Dave wrote:
Grand Magus wrote:
NPC Dave wrote:
I also dispute some questions, ...

Which ones?

Lastknight already pointed out number 7.

The basis for their answer to this question is the Phillips curve.

The problem is that the assumption that there is an inverse relationship between unemployment and inflation is false. This should have been acknowledged back in the 70's during stagflation, but that is ignored because politicians love to spend money and so economists who ignore reality in favor of justifying what politicians will do anyway get rewarded with cushy academic positions.

Prices rising could be caused by a significant change in the supply/demand ratio for a given product or service. I suspect that some of the rise in food prices are caused by increase demand from people in countries like India and China who are now wealthy enough to buy more and better quality food. When you go from poor to middle class or rich one of the first things you do is tend to get more food of the kind you like.

On the supply side, food supply is affected by food production as well as how much goes into biofuels instead.

But most economists won't admit that prices rising can also be caused by deliberate monetary inflation...that is the central bank in most countries creates new money out of thin air...in order to benefit the ruling class and wealthy elite who get access to the new money first...and enrich themselves while people in the middle class and poor see prices already rising by the time the money trickles down to them...if at all.

Until people realize that the Federal Reserve in the USA and central banks in other countries are ripping us off, this process will continue.

It seemed to me that the question included "full employment" to control, not to consciously say that prices inflate with more employment (though a scientific test would have left that part out).
...

Thanks for explaining it! I spouted off without knowing (as) much (as I should have).


Hahaha oh my god, are there really people who still believe in Austrian economics?

Qadira

NPC Dave wrote:
yellowdingo wrote:

So if you are an engineer you are interested in my idea for steel manufacture using Charcoal as the Mesh into which iron, silica, and sulphur are deposited through either superfluid flow or gaseous vapour deposition.

As to the test...I found it annoying. The reasons for an answer seem based on mathematical models in keeping with the text book. But if for example I saw a cue of Cubans outside a shop, my assumption would not be that the commodity was under priced, My assumption would be that it is either A) In Shortage and/or B) Rationed, Because that is what we saw 25 years ago when the Soviet Union fell. So the Textbook Answer is not in keeping with realities of Human Behavior.

One of the common reasons that something would be rationed or in shortage is that the price is too low. In the Soviet Union you would have food shortages because it would cost more for the farmer to get the food to the store than the price it could be sold for. I also dispute some questions, but shortages for many consumer goods would be that the central bureaucracy set the price too low.

Similar thing with the Ipad2, Apple could easily have set the price higher, and still would have sold out. But they want to undercut the competition by keeping the price lower....

Except that wasn't the "real" price was it? It was that price...plus wait in line all night or risk some guy buying them all up and shipping them overseas for a profit.

And if you didn't get one? Then the price is the Apple listed price plus a wait of 4+ weeks for more to come in stock.

Could have just sent one in the mail free to every one and recovered profits via their membership fees and download profits.

Qadira

1 person marked this as a favorite.
Pathfinder Adventure Path, Modules Subscriber
ProfessorCirno wrote:
Hahaha oh my god, are there really people who still believe in Austrian economics?

Well, if you are suggesting that the near-collapse of a highly-regulated industry that also received and continues to receive massive implicit state subsidies somehow invalidates Austrian economics, you have me somewhat confused.

Qadira

Pathfinder Adventure Path, Modules Subscriber
NPC Dave wrote:

Central banks are set up to support and protect fractional reserve banking from the bust part of the boom and bust cycle that they cause...by lending money out to the big banks when they get in over their head through defaults.

Fractional reserve banking in and of itself causes an inflationary boom cycle and then a deflationary bust cycle...without a central bank, when defaults start happening and people get nervous about a bank's stability and start demanding their deposits back, banks have to call in loans and pay out more currency. The very act of inflation during the boom cycle now works in reverse...the more defaults and more loans called in and paid out in currency the more you get deflation. The FDIC was created to avoid bank runs but of course we are now seeing the long-term effects of this workaround.

As far as who gets the blame, there is plenty to go around. The rich for setting up the central bank scheme to protect themselves, the government for granting central banks monopolies on making money, and the average citizen (sucker) who thinks he or she is going to come out ahead through inflation by putting little money down on a house and use it as a personal piggy bank as the value goes up...that worked well for awhile until 2006-2007. Now they are learning that their wealth was nothing but a mirage, an expensive one when factoring in the inflated property taxes and insurance premiums they are still paying...if they haven't already been evicted in foreclosure.

See, you've got a real bee in your bonnet about fractional reserve banking. It's just.... banking. Banks take deposits and lend them on, retaining what they consider to be enough funds to manage their liquidity needs. Maturity transformation is a key economic purpose for banks to exist, taking short-terms deposits and lending on longer maturities. Without fractional reserve banking, banks wouldn't lend - end of the banking industry and probably a massive collapse in long term economic growth.

The boom and bust cycles have little to do with the fact that fractional reserve banking exists, the problem lies in that the banks considered that they could do too much of it. They retained insufficient funds for liquidity purposes. On the flipside of the balance sheet, and the key driver for the crisis, they lent too much to too many dodgy borrowers. They were encouraged to do this by regulation and government subsidy (much of which remains unaddressed) that encouraged them to take too much risk. But this is a faiure of risk management within the banks and of government policy, not of fractional reserve banking as a concept. You are effectively suggesting that banks should take no risk, ever. That's not banking. It's not even a business.


ProfessorCirno wrote:
Hahaha oh my god, are there really people who still believe in Austrian economics?

There is no Austria.

It is a made up country by the government to keep us in fear of a terrorist attacks, so they can steal our rights
away from us by offering to "protect" us for "just a small fee, really"; and all the while they are out buying new
big-screen TV's and game consoles.

Andoran

Grand Magus wrote:
ProfessorCirno wrote:
Hahaha oh my god, are there really people who still believe in Austrian economics?

There is no Austria.

It is a made up country by the government to keep us in fear of a terrorist attacks, so they can steal our rights
away from us by offering to "protect" us for "just a small fee, really"; and all the while they are out buying new
big-screen TV's and game consoles.

Is this why my part-"Austrian" father got stopped by airport security so much?


Aubrey the Malformed wrote:
ProfessorCirno wrote:
Hahaha oh my god, are there really people who still believe in Austrian economics?
Well, if you are suggesting that the near-collapse of a highly-regulated industry that also received and continues to receive massive implicit state subsidies somehow invalidates Austrian economics, you have me somewhat confused.

Which industry is that? Because it sure as hell doesn't sound like any industry that collapsed anytime recent in the US.


ProfessorCirno wrote:
Aubrey the Malformed wrote:
ProfessorCirno wrote:
Hahaha oh my god, are there really people who still believe in Austrian economics?
Well, if you are suggesting that the near-collapse of a highly-regulated industry that also received and continues to receive massive implicit state subsidies somehow invalidates Austrian economics, you have me somewhat confused.
Which industry is that? Because it sure as hell doesn't sound like any industry that collapsed anytime recent in the US.

It reminds me of the shrimping industry.


I'm warming up my 'Economics BS-Meter' for the up coming election.


high G wrote:
I'm warming up my 'Economics BS-Meter' for the up coming election.

Looks like some of you beat me to the punch.


.

_ WOW! _

Economists do it with Curves. ::shakes head

.

Cheliax

17/20 - I missed 1, 17 and 20


Pathfinder Adventure Path Subscriber

I got most of them right mainly because I knew what they wanted as an answer and not because I believe the answers are totally true.

Silver Crusade

Pathfinder Deluxe Comics Subscriber; Pathfinder Adventure Path, Card Game Subscriber

12/20. Once again reinforcing my terrible understanding of economics.

Now what's this about beach front property in Arizona?


Drock11 wrote:
I got most of them right mainly because I knew what they wanted as an answer and not because I believe the answers are totally true.

Why do they want you to give false answers?


Orfamay Quest wrote:
Drock11 wrote:
I got most of them right mainly because I knew what they wanted as an answer and not because I believe the answers are totally true.
Why do they want you to give false answers?

They don't. They "want" the answers they believe are true.

There are disagreements in economic theory. If the quiz was written from a Chicago School PoV, an expert Marxist economist would disagree with many of the answers, but would easily be able to tell which ones the author thought was true.

1 to 50 of 70 << first < prev | 1 | 2 | next > last >>
Paizo / Messageboards / Paizo Community / Off-Topic Discussions / Economics Literacy Quiz All Messageboards

Want to post a reply? Sign in.

©2002–2014 Paizo Inc.®. Need help? Email customer.service@paizo.com or call 425-250-0800 during our business hours: Monday–Friday, 10 AM–5 PM Pacific Time. View our privacy policy. Paizo Inc., Paizo, the Paizo golem logo, Pathfinder, the Pathfinder logo, Pathfinder Society, GameMastery, and Planet Stories are registered trademarks of Paizo Inc., and Pathfinder Roleplaying Game, Pathfinder Campaign Setting, Pathfinder Adventure Path, Pathfinder Adventure Card Game, Pathfinder Player Companion, Pathfinder Modules, Pathfinder Tales, Pathfinder Battles, Pathfinder Online, PaizoCon, RPG Superstar, The Golem's Got It, Titanic Games, the Titanic logo, and the Planet Stories planet logo are trademarks of Paizo Inc. Dungeons & Dragons, Dragon, Dungeon, and Polyhedron are registered trademarks of Wizards of the Coast, Inc., a subsidiary of Hasbro, Inc., and have been used by Paizo Inc. under license. Most product names are trademarks owned or used under license by the companies that publish those products; use of such names without mention of trademark status should not be construed as a challenge to such status.