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3 Economics - Coggle Diagram

- - - - Monetary policy refers to the central bank's actions that affect the quantity of money and credit in an economy in order to influence economic activity
        
        Monetary policy is said to be expansionary when the central bank increases the quantity of money and credit in an economy
        
        When the central bank is reducing the quantity of money and credit in an economy, the monetary policy is said to be contractionary
    - - Fiscal policy refers to a government's use of spending and taxation to influence economic activity 政府支出收税
        
        The budget is said to be balanced when tax revenues equal government expenditures
        
        A budget surplus occurs when government tax revenues exceed expenditures
        
        A budget deficit occurs when government expenditures exceed tax revenues
  - - - Narrow money is the amount of notes (cuurency) and coins in circulation in an economy plus balances in checkable bank deposits
        
        Broad money includes narrow money plus any amount available to liquid assets, which can be used to make purchases
        
        According to the Federal Reserve Bank of New York
        
        M1: currency in the hands of the public; travellers checks; demand deposits; and other deposits against which checks can be written
        
        M2: includes M1, Lus savings accounts, time deposits of under $100,000, and balances in retail money market mutual funds
      - The European Central Bank decribes their monetary aggregates as follows
        M1 2; M2 4; M3 all
        
        Currency in circulation
        
        Overnight deposits
        
        Deposits with an agreed maturity of up to 2 years
        
        Deposits redeemable at notice of up to 3 months
        
        Repurchase agreements
        
        Money market fund shares /units
        
        Debt securities issued with a maturity of up to 2 years
        欧洲几乎不考，CFA美国搞的，核心部分是美国。
      - 中国的定义 M0 流通中的现金。 M1=M0+活期存款， M2=M1+定期存款。
        美国 M1 流通中的现金，活期存款(=支票账户，只能对活期账户开支票)。M2=M1+定存。
    - - The quantity theory of money states that quantity of money is some proportion of the total spending in an economy and implies the quantity equation of exchange
        money supply x velocity = price x real output (MV=PY)
        
        Price multiplied by real output is total spending so that velocity is the average number of times per year each unit of money is used to buy goods or services. The equation of exchange must hold with velocity defined in this way
        
        Monetarists believe that velocity and real output of the economy change only slowly
        
        Assuming that velocity and real output remain constant, any increase in the money supply will lead to a proportionate increase in the price level
        
        The belief that real variables (real GDP and velocity) are not affected by monetary variables (money supply and prices) is referred to as money neutrality
      - 货币的量化理论。货币供应x速率=价格x产出
        速率，上海流通极快，拿工资就下单买奶茶，酒吧刷卡。山区，辛苦养猪一年卖千块，过年买两只小猪。
        货币供应增加，按比例影响物价水平～不刺激经济 = 货币的中性。只会带来通胀，不对经济起作用。
        V，Y稳定慢变，增加M，也增加P物价。货币学派Monetarist school 央行不要乱发货币。
  - - - Role of CB
        央行的职能
        
        Sole supplier of currency
        唯一的供应者
        
        Banker to the government and other banks
        监管其他银行
        
        Lender of last resort
        最后贷款人。存款准备金，无限贷款，(历史上证明，没有央行保护的商业银行，挤兑必死。)
        
        Supervise banks
        监督商业银行
        
        Holder of gold and foreign exchange reserves
        黄金外汇储备
        
        Conductor of monetary policy
        执行货币政策
      - Objectives of CB
        央行的目标
        
        Control inflation so as to promote price stability
        控制通货膨胀，保持价格稳定
        
        Stability in exchange rates with foreign currencies
        保持外汇的稳定
        
        Full employment
        完全的就业
        
        Sustainable positive economic growth
        持续的经济增长
        
        Moderate long-term interest rates
        适度的长期利率
        欧洲-核心1物价稳定。美国 1+政府经济发展
    - - Much more important are costs imposed on an economy by unanticipated inflation, inflation that is higher or lower than the expected rate of inflation
        
        When inflation is higher than expected, borrowers gain at the expense of lenders as loan payments in the future are made with currency that has less value in real terms
        
        Conversely, inflation that is less than expected will benefit lenders at the expense of borrowers
        高通货膨胀损害借款人利益。低损害借款人
        
        In an economy with volatile (rather than certain) inflation rates, lenders will require higher interest rates to compensate for the additional risk they face from unexpected changes in inflation
        
        Higher borrowing rates slow business investment and reduce the level of economic activity
        经济变得失常，无法估计，不愿意借款，高风险=要求更高利率 -> 更少贷款，降低经济活动
      - 对企业家有伤害A second cost of unexpected inflation is that information about supply and demand from changes in prices becomes less reliable
        
        Suppose that when expected inflation is 5%, a manufacturer sees that prices for his products have increased 10% 定价少于过度膨胀
        
        If this is interpreted as an increase in demand for the product, the manufacturer will increase capacity and production in response to the perceived increase in demand 如果价高误解为需求增加，从而增加(不需要的)产量
        
        If, in fact, general price inflation is 10% rather than the expected 5% over the recent period, the price increase in the manufacturer's product did not result from an increase in demand. The expansion of production will result in excess inventory and capacity, and the firm will decrease production, laying off workers and reducing or eliminating expenditures on increased capacity for some time. 成本上涨，解雇，减少产量
        
        Because of these effects, unexpected inflation can increase the magnitude or frequency of business cycle
        增加经济周期的幅度和频率
      - 1 Policy rate央行的主导利率
        
        In the United Stated, banks can borrow funds from the Fed. The rate at which banks can borrow reserves from the Fed is termed the discount rate.美国联邦储备局 For the European Central Bank (ECCB), it is called the refinancing rate 欧洲
        
        One way to lend money to banks is through a repurchase agreement. The Bank of England uses this method, and police rate is called the two-week repo(repurchase) rate 英国
        
        In the United States, the federal funds rate is the rate that banks charge each other on overnight loans of reserves
        
        A lower rate reduces banks' cost of funds encourage lending, and tends to decrease interest rates
        
        A higher policy rate increase banks' cost of funds discourage lending and tends to increase interest rates
        
        Policy rate下 -> 融资成本低，释放流动性(扩张的货币政策)
        
        Policy rate下 -> 融资成本高，收紧流动性(紧缩的货币政策)
    - - 3 Open market operations 公开市场操作，最多
        
        Central bank buy securities -> funds available funds for lending 上 -> money supply 上-> interest rate 下
        
        This too is the Fed's most commonly used tool and is important in achieving the federal funds target rate (policy rate)
        央行买债卷 -> 扩张的货币政策正回购=提供货币
        央行卖债卷 -> 紧缩的货币政策逆回购=回收货币
      - 2 Reserve requirements 最强烈作用
        
        Reserve requirement上 -> available funds for lending下 -> money supply下 -> interest rate上
        
        This tool only works well to increase the money supply if banks are willing to lend and customers are willing to borrow
        存款准备金下 -> 紧缩货币政策
        存款准备金下 -> 扩张货币政策
        money multiplier 10% 10倍，20% 5倍货币流量
    - - An economy's long-term sustainable growth rate is called the real trend rate or, the trend rate
        
        The neutral interest rate of an economy is the growth rate of the money supply that neither increases nor decreases the economic growth rate.
        Neutral interest rate = real trend rate of economic growth + inflation target
        
        Policy rate > Neutral rate: contractionary
        
        Policy rate < Neutral rate: expansionary
        真实利率大概是GDP增长，我在总盘子里没少，100个鸡蛋。总盘子大了6%，补我6个。还得+上通货膨胀率。
      - Monetary policy is often adjusted to reflect the source of inlation
        
        If inflation is above target due to higher aggregate demand, then contractionary monetary policy may be an appropriate response to reduce inflation
        
        If inflation is higher due to supply shocks, and the economy is already operating below full employment , a contractionary monetary policy may make a bad situation worse
    - - The monetary transmission mechanism refers to the ways in which a change in monetary policy, specifically the central bank's policy rate, affects the price level and inflation. There are four channels through which a change in the policy rates the monetary authorities control directly are transmitted to prices
        
        Banks' short-term lending rates will increase in line with the increase in the policy rate. The higher rate will decrease aggregate demand as consumers reduce credit purchases and businesses cut back on investment in new projects
        银行短期利率随着央行调整，利率升
        
        Bond prices, equity prices, and asset prices in general will decrease as the discount rates applied to future expected cash flows are increased. This way have a wealth effect because a decrease in the value of householders' assets may increase the saving rate and decrease consumption
        利率涨，债卷，股票价格跌
      - Both consumers and businesses may decrease their expenditures because their expectations for future economic growth decrease.
        消费者，商业的信心都会下降。消费，投资就会减少。整个经济受影响。传导
        
        The increase in interest rates may attract foreign investment in debt securities, leading to an appreciation of the domestic currency increases the foreign currency prices of exports and can reduce demand for the country's export goods
        利率的提高可能会吸引外国对债务证券的投资，导致本国货币升值，增加出口商品的外币价格，并可能减少对本国出口商品的需求。
        Taken together, these effects act to decrease aggregate demand and put downward pressure to the price level. A decrease in the policy rate would affect the price level through the same channels, but in the opposite direction.
      - Limitation of Monetary Policy
        
        The transmission mechanism for monetary policy does not always produce the intended results
        
        Long-term rates may not rise and fall with short-term rates because of the effect of monetary policy changes on expected inflation
        
        If individuals and businesses believes that a decrease in the money supply intended to reduce inflation will be successful, they will expect lower future inflation rates
        
        Conversely, increasing the money supply to stimulate economic activity would lead to an increase in expected inflation rates and long-term bond yields, even as short-term rates fall.
        
        Monetary tightening may be viewed as too extreme, increasing the probability of a recession, making long-term bonds more attractive and reducing long-term interest rates.
        
        Bond market participants that act in this way have been called bond market vigilantes. 义务警员。比如说，央行宽松政策，降短期利率，投资者想通胀上升=长期债卷倒霉(固定利息+本金，通货膨胀购买力下降，想要卖掉长期债卷，一卖长期债卷，债卷价格下降=r长期上升=紧缩政策，矛盾央行宽松政策)。投资者站在自己的角度操作，会形成与央行的反操作。
        
        When the CB's policy is credible and investors believe that the inflation target rate will be maintained over time, this effect on long-term rates will be small
        
        liquidity trap
        流动性陷阱
        
        Another situation in which the transmission mechanism may not perform as expected is if demand for money becomes very elastic and short-term rates. Such a situation is called a liquidity trap. 流动性陷阱。发生在2007经济危机/差的时候。1 银行不愿意发放贷款，容易坏账。居民/企业不愿意借钱(经济过热，大家拼命借钱，借钱滞后)。=央行增加货币供应=增加流动性，是无效的。2 货币变得非常弹性，个人都愿意持有更多的现金，不去管经济的变动。经济危机，不去存钱，也不去借钱，捏着现金。对货币的需求略微无穷大。elastic水平线。降息无效，因为水平线，降一点就消失。=没办法刺激经济。
        
        Increasing growth of the money supply will not decrease short-term rates under these conditions because individuals hold the money in cash balances instead of investing in interest-bearing securities
        
        If an economy is experiencing deflation even though money supply policy has been expansionary, liquidity trap conditions may be present
        
        Delfation is more difficult for CB to reverse (mindset)
        
        Another reason standard tools for increasing the money supply might not increase economic is that even with increasing excess reserves banks may not be willing to lend
        
        Banks decreased their lending, even as money supplies were increased and short-term rates fell
        
        With short-term rates near zero, economic growth still poor, and a real threat of delfation, CB began a policy termed quantitative easing
        
        Quantitative easing
        量化宽松
        
        UK
        
        Large purchase of British government bonds in the maturity range of three to five years 英国政府买入3-5年债卷
        
        The intent was to reduce interest rates to encourage borrowing and to generate excess reserve in the banking system to encourage lending
        
        USA
        
        QE1: Billions of dollars were made available for the Fed to buy assets other than short-term Treasury securities. Large amounts of mortgage securities were purchased from banks to encourage bank lending and reduce mortgage rates in an attempt to revive the housing market 政府去买房贷抵押证劵MBS，导致拉高证劵，降房贷利率。大家更愿意去买房，刺激经济。
        
        QE2: The Fed purchased long-term Treasury bonds in large quantities (hundred of billions of dollars) with the goal of bring down longer-term interest rates and generating excess reserves to increase lending and economic growth. The Fed has also purchased securities with credit risk 美国政府去买长期国债，长期债卷的价格将会上涨，导致长期期利率下降，大家更愿意贷款开工厂
        
        Monetary Policy in Developing Economies
        发展中国家，央行遇到的困难
        
        Developing economies often face additional challenges when implementing monetary policy
        
        Absence of liquid bond markets through which to conduct open market operations 缺乏流动的债卷市场。央行主要工具是公开市场操纵 = 买卖债卷
        
        Lack of credibility, resulting from prior poor track record in controlling inflation 缺乏信用，出来说说话就有用，如美联储
        
        Rapid change in the economy, making it difficult to ascertain the trend rate (and, hence, the neutral interest rate) 经济的快速变动，增长快。中国9%，发达国家3.5%定标杆，高宽松，低紧缩。9%太高，不可做标杆。
        
        Rapid financial innovation resulting in changes in the money supply definition 快速金融创新，如P2P，没想到存款保证金出问题。最初想无穷笔小贷，短期高利率，2 3k 1,2月。互联网金融，小金额小贷，时间很短非常密集，以为能抵消没事。但还是个贷款，还是会被挤兑。
        
        Political interference resulting in a lack of CB independence 政治的干预，发展中国家一般央行不独立。政府喜欢搞通货膨胀，都是有财政赤字，能赖掉账。
    - - Independence
        独立
        
        It should be free from political interference
        
        Independence should be thought of in relative terms (degrees of independence) rather than absolute terms
        
        Independence can be evaluated based on both
        
        Operational independence means that the CB is allowed to independently determine the policy rate
        运营独立，独立制定政策
        
        Target independence means the CB also defines how inflation is computed, sets the target inflation level, and determines the horizon over which the target is to achieved
        目标独立，利率制定独立，普遍膨胀率2-3%
      - Credible
        可信度
        
        CB should follow through on their stated intentions
        
        If government with large debts, instead of a CB, set an inflation target, the target would not be credible because the government has an incentive to allow inflation to exceed the target level政府有动机，高膨胀率
        
        A credible CB's target can become self-fulfilling prophecies. Actual inflation will then be close to that level 央行如果有可信度的话，能自我实现。行长出来说一句房价过高，买房的人就少了，房价就下来了。
      - Transparent
        
        Transparency on the part of CB aids their credibility.
        Transparency means CB periodically disclose the state of the economic environment by issuing Inflation Reports.
        透明，可预期的，定期公布通货膨胀报告，制定标杆利率inflation + real rate
      - Different Targets Used by CB
        
        CB have used various economic variable and indicators over years to make monetary policy decisions.
        
        In the past, some have used interest rate targeting, increasing the money supply when specific interest rates rose above the target band and decreasing the money supply when rates fell below the target band.利率目标
        
        Currently, inflation targeting is the most widely used tool for making monetary decisions and is, in fact, the method required by law in some countries通货膨胀利率
        
        The most common inflation target is 2% with a permitted deviation of (+-)1% so the target band is 1% to 3%
        
        Some countries use exchange rate targeting. That is , they garage a foreign exhange rate between their currency and another (often the US dollar)汇率水平
        
        As an example, consider a country that has targeted an exchange rate for its currency versus the US dollar. If the foreign exchange value of the domestic currency falls relative to the US dollar, the monetary authority must use foreign reserves to purchase their domestic currency in order to reach the target exchange rate。中美贸易战，汇率贬值。中美达成协议，汇率升值
  - - - FP referes to a government's use of spending and taxation to meet macroeconomic goals
        
        Keynesian economists believe that FP, through its effect on aggregate demand, can have a strong edict on economic growth when the economy is operating at less than full empolyment
        凯恩斯认为政府要干预。经济不好，宽松财政政策
        
        Monetarists believe that the effect of fiscal stimulus is only temporary and that monetary policy should be used to increase or decrease inflationary pressures over time. Monetarists do not believe that monetary policy should be used in an attempt to smooth cyclical changes in economic acitivity
        货币学派，保持一个稳定的货币供应
    - - Influencing the level of economic activity and aggregate demand 反经济周期，衰退-宽松，繁荣-紧缩
        
        Redistributing wealth and income among segments of the population 重新分配财富和收入，补贴，减免教育医疗费用
        
        Allocating resources among economic agents and sectors in the economy 资源再分配，搞基础设施建设，带动经济发展
    - - Spending tools G
        
        Transfer payments: Redistribute wealth, taxing some and making payments to others, transfer payments are not included in GDP computations 补贴小孩，老人
        
        Current spending: referes to government purchases of goods and services on an ongoing and routine basis 给公务员买衣服，文具
        
        Capital spending: refers to government spending on infrastructure expected to boost future productivity of the economy 高速公路建设，港口机场
      - Justification for spending tools
        
        Provide services such as national defence that benefit all the residents in a country 国防，只能政府提供
        
        Invest in infrastructure to enhance economic growth 高铁，5G
        
        Support the country's growth and unemployment targets by directly affecting aggregate demand 支持经济，降低失业
        
        Provide a minimum standard of living 低保
        
        Subsidize investment in research and development for certain high-risk ventures consistent with future economic growth or other goals (eg green technology) 补贴研发，高风险投入为未来经济
      - Revenue Tools T
        
        Direct taxes are levied on income or wealth. These include income taxes, taxes on income for national insurance, wealth taxes, estate taxes, corporate taxes, capital gains taxes, and Social Security taxes. Some progressive taxes 直接税，对个人，收入/财产征税
        
        Indirect taxes are levied on goods and services. These include sales taxes, value-added taxes (VATs), and excise taxes. Indirect taxes can be used to reduce consumption of some goods and services 影响更快。对商品/服务征税，增值税，烟草税
      - Desirable attributes of tax policy
        
        Simplicity to use and enforce 简单
        
        Efficiency, having the least interference with market forces and not acting as a deterrent to working 有效
        
        Fairness is quite subjective, but two commonly held beliefs are 公平
        
        Horizontal equality: people in similar situations should pay similar taxes 类似税
        
        Vertical equality: richer people should pay more in taxes
        
        Sufficiency, in that taxes should generate sufficient revenues to meet the spending needs of the government 足够开支
      - Ad & Disad
        
        Advantages
        
        Social policies such as discouraging tobacco use can be implemented very quickly via indirect taxes
        
        Quick implementation of indirect taxes also means that government revenues can be increased without significant additional costs
        
        Disadvantage
        
        Direct taxes and transfer payments take time to implement, delaying the impact of fiscal policy 直接税要花时间，有延迟
        
        Capital spending also takes a long time to implement. The economy may have recovered by the time its impact is felt 大项目也要花时间
    - - FM = 1/[1-MPC(1-t)] = 1/[1-bx(1-t)]
        
        MPC: Marginal propensity of consumption (b) 边际消费倾向
        
        The FM is inversely related to tax rate (higher tax rate decreases the multiplier) and directly related to the marginal propensity to consume (higher MPC increases the multiplier) 个人所得税税率t
      - Example: consider an increase in government spending of $100, when the MPC is 80%, and the tax rate is 25%. The fiscal multiplier is 1/[1-0.8(1-0.25)]=2.5, and the increase of $100 in government spending has the potential to increase aggregate demand by $250 放大倍数2.5倍
      - 财政有乘数效应，政府100雇员人修路。修路建造工人拿政府100，花80出去。边际消费。花=别人的赚。t税，对方收80(1-30%)=56。56再消费，其中80%拿来买白菜 56x80%(1-t) 等比数列
    - - Economic forecasts might be wrong, leading to incorrect policy decisions
        
        Complications arise in practice that delay both the implementation of discretionary fiscal policy and the impact of policy changes on the economy
        
        The lag can be divided into three types
        
        Recognition lag: Discretionary fiscal policy decisions are made by a political process. The state of the economy is complex, and it may take policymakers time to recognize the nature and extent of economic problems 发现就滞后
        
        Action lag: The time governments take to discuss, vote on and enact fiscal policy changes 行动滞后，讨论投票才行驶
        
        Impact lag: the time between enactment of fiscal policy changes and when the impact of the changes on the economy actually takes place. It takes time for corporations and individuals to act on the fiscal policy changes, and fiscal multiplier effects occur only over time as well 作用要两个月，滞后
      - Additional macroeconomic issues may hinder usefulness of FP
        
        Misreading economic statistics: The full employment level for an economy is not precisely measurable. If the government relies on expansionary FP mistakenly at a time when the economy is already at full capacity, it will simply drive inflation higher 可能误判
        
        Crowding-out effect: Expansionary FP may crowd out private investment, reducing the impact on aggregate demand 挤出效应，如果政府赤字，就要去借钱，会拉高市场利率 = 私营部门就没法借，因为利率太高。= 挤出私营经济活动。私营高效率
        
        Supply shortage: If economic activity is slow due to resource constraints (low availability of labor or other resources) and not due to low demand, expansionary FP will fail to achieve its objective and will probably lead to higher inflation 资源的局限导致不足
        
        Limits to deficits: There is a limit to expansionary FP. If the markets perceive that the deficit is already too high as a proportion of GDP, funding the deficit will be problematic. This could lead to higher interest rates and actually make the situation worse 财政赤字的约束
        
        Multiple targets: If the economy has high unemployment coupled with high inflation, fiscal policy cannot address both problems simultaneously 多重目标，刺激经济通胀 vs 控制通胀
    - - Increases in the current deficit mean greater taxes in the future
        
        To maintain their preferred pattern of consumption over time, taxpayers may increase current savings (reduce current consumption) in order to offset the expected cost of higher future taxes
        
        If taxpayers reduce current consumption and increase current saving by just enough to repay the principal and interest on the debt the government issued to fund the increased deficit, there is no effect on aggregate demand
      - If taxpayers underestimate their future liability for servicing and repaying the debt, so that aggregate demand is increased by equal spending and tax increases, Ricardian equivalence does not hold
      - RE 政府如果减税，政府想人民手里的钱多了，会多消费了，会刺激经济发展了。RE认为不是，政府减税，劳动人民会看穿，政府不会永远减税，在未来一定会加税。老百姓一定会把钱存起来 = 减税无效 = 这财政政策是失效的。
        也有可能有效 = 老百姓没看穿。=RE不成立
    - - Debt ratio
        
        Debt ratio: aggregate debt to GDP
        
        If the real interest rate on the government's debt is higher than the real growth rate of the economy, then the debt ratio will increase over time (keeping tax rates constant)
        
        If the real interest rate on government's debt is lower than real growth in GDP, the debt ratio will decrease (ie improve) over time
        
        负债率，近两年政府去杠杆，达利欧的债务危机。度量，用整体国家负责水平除以GDP去度量，
      - ..with the size of fiscal deficit
        大负债
        
        Higher deficits lead to higher future taxes. Higher future taxes will lead to disincentives to work and entrepreneurship. This leads to lower long-term economic growth 现在赤字=未来加税，
        
        If markets lose confidence in the government, investors may not be willing to refinance the debt. This can lead to the government defaulting (if debt is in a foreign currency) or having to simply "print money" (if the debt is in local currency). Printing money would ultimately lead to higher inflation 赤字，会印钱=带来通胀。
        
        Increased government borrowing will tend to increase interest rates, and firms may reduce their borrowing and investment spending as a result, decreasing the impact on aggregate demand of deficit spending. This is referred to as the crowding-out effect because government borrowing is taking the place of private sector borrowing 赤字=会去借钱，会挤出效应
        
        反对担心
        
        If the debt is primarily being held by domestic citizens, the scale e of the problem is overstated 欠的钱是国民自己的钱。内债
        
        If the debt is used to finance productive capital investment, future economic gains will be sufficient to repay the debt 债用来生产 = 不担心
        
        Fiscal deficits may prompt needed tax reform 加速税改革=企业降税
        
        Deficits would not matter if private sector savings in anticipation of future tax liabilities just offsets the government deficit (Ricardian equivalence holds) 均衡，降税被人识破=没用
        
        If the economy is operating at less than full capacity, deficits do not divert capital away from productive uses. On the contrary, deficits can aid in increasing GDP and employment 如果经济没有达到完全就业 = 财政政策去刺激经济，挺好的
    - - FP is implemented through changes in taxes and spending
        This is called discretionary FP 相机抉择
        
        During recessions, actions can be taken to increase government spending or decrease taxes. Either change tends to strengthen the economy by increasing aggregate demand, putting more money in the hands of corporations and consumers to invest and speed
        
        During inflationary economic booms, actions can be taken to decrease government spending or increase taxes. Either change tends to slow the economy by decreasing aggregate demand, taking many out the hands of corporations and consumers, causing both investment and consumption spending to fall
        凯恩斯主义，认为经济衰退，搞宽松。认为过热，搞谨慎。
- - - - Exchange rate: is simply the price or cost of units of one currency in terms of another
        Nominal exchange rate: the price that we observe in the marketplace for foreign exchange
      - Real exchange rate: the focus shifts from the quotations in the foreign exchange market to what the currencies actually purchase in terms of real goods and services
        
        FX real (d/f) = FX nominal (d/f) x CPIf / CPFd
        
        Changes in real exchange rates can be used when analyzing economic changes over time
        
        When the real exchange rate (d/f) increases, exports of goods and services have gotten relatively less expensive to foreigners, and imports of goods and services from the foreign country have gotten relatively more expensive over time
      - At a base period, the CPI of the US and Euro are both 100, and the exchange rate is $1.70 per euro. Three years later, the exchange rate is $1.6 per euro, and the CPI has risen to 110 in the US and 112 in the Euro. What is the real exchange rate?
        Correct Answer:
        The real exchange rate is $1.6 per euro x 112/110 = $1.629 per euro
        实际利率 (1.6USD/110) / (1EURO/112)
      - 名义汇率实际汇率，平时看到的7.1RMB/USD 是名义的。可以写成7.1RMB / 1USD。 +通货膨胀=实际汇率。1.21CPI 膨胀了21%。(7.1/CPIrmb)/(1/CPIusd) = (7.1/1.21)/(1/1.18) = (7.1/121)/(1/118)
        x CPIf / CPFd = 外国的通货膨胀/本国的膨胀
  - - - Sell side: large multinational banks
      - Buy side
        
        Corporations: regularly engage in cross-border transactions, purchase and sell foreign currencies as a result, and enter into FX forward contracts to hedge the risk of expected future receipts and payments denominated in foreign currencies
        * Investment accounts: hold foreign securities, and may both speculate and hedge with currency derivatives
        
        Real money accounts: refer to mutual funds, pension funds, insurance companies, and other institutional accounts that do not use derivatives
        
        Leveraged accounts: refer to various types of investment firms that do use derivatives, including hedge funds, firms that trade for their own accounts, and other trading firms of various types
      - Buy side
        
        Governments and government entities: including sovereign wealth funds and pension funds, acquire foreign exchange for transactional needs, investment, or speculation
        
        Central bank sometimes engage in FX transactions to affect exchange rates in the short term in accordance with government policy
        
        Retail market: refers to FX transactions by households and relatively small institutions and may be for tourism, cross-border investment, or specculative trading
      - 国际金融市场里，卖方一般是大型跨国银行。买方有公司，有投资账户换了钱去投资，有政府机构在买，也有零售市场
    - - Direct quote is the value of one unit of a foreign currency in units of the home currency (D/F)
        Indirect quote is the amount of a foreign currency for one unit of the home currency (F/D)
        Base currency: the currency in which the quote represents one unit
        Price currency: the currency for which the quote represents a number of units
        
        The foreign currency is the base currency for a direct quote
        
        The home currency is the base currency for an indirect quote
      - To convert an indirect quote to a direct quote, you simply take the reciprocal of the one that you are given (use the 1/x calculator key)
        
        AUD: USD=0.6, 0.6 USD/AUD, 1AUD = 0.6USD
        
        USD: AUD = 1/0.6 =1.67, 1.67 AUD/USD
      - 如果我去超市里买苹果，看到报价 2元/个苹果。对苹果的直接报价。 A/B B是考察对象。0.5个苹果/元，对苹果的间接报价。7.1RMB/USD 对美元的直接报价。-> 7.2RMB/USD =美元升值。
        有时考试，AUD:USD=0.6, 0.6USD=1AUD, 0.6USD/AUD
        A:B=0.6, 0.6B/A
  - - - CR is the exchange rate between two currencies implied by their exchange rates with a common third country
      - Example:
        
        0.60 USD/AUD, 10.70 MXN/USD
        
        MXN/AUD = USD/AUD x MXN/USD = 0.6 x 10.7 = 6.42
        
        1.7799 CHF/USD, 2.2529 NZD/USD
        
        CHD/NZD = (CHF/USD) / (NZD/USD) = 1.7799/2.2529 = 0.79
  - - - With the convention of giving the value of the quoted currency (the first currency) in terms of units of the second currency, there is a premium on the quoted currency when the forward exchange rate is higher than the spot rate and a discount otherwise
      - Example: The AUD/EUR spot exchange rate is 0.7313 with the 1-year forward rate quoted at +3.5 points
        
        What is the 1-year forward AUD/EUR exchange rate?
        
        Is the euro trading at a forward discount or forward premium relative to the Australian dollar?
        报价时，3点5个点，3对应最后一位数。
        
        Correct Answer:
        
        The forward exchange rate is 0.7313 + 0.00035 = 0.73165
        
        Because the price of Euros in AUD is higher one year out, the euro is trading at a forward premium (and the AUD at forward discount)
      - F<S = discount; F>S = premium
  - - - A currency selling at a forward premium is considered "strong" relative to the second currency and is expected to appreciate
        远期是溢价 = 货币强势；反之弱势
        
        A currency selling at a forward discount is considered " weak" and is expected to depreciate
      - Example
        
        3X/Y changes to 2X/Y
        
        1Y=3X, now changing to 1Y=2X
        
        Y is weak relatively; X is strong relatively
  - - - Elasticity Approach
        弹性理论
        
        Elasticity approach
        ധM= imports / (imports+exports)
        ധX = exports / (imports+exports)
        ℇM: elasticities (as positive numbers) of demand for imports
        ℇX: elasticities (as positive numbers) of demand for exports
        
        Given Marshall-Lerner condition马歇尔勒纳条件,达到条件=能改善
        When import expenditures = export revenues
        ℇX > -(WM/WX)(ℇM-1) 出口弹性>出口/进口 x弹性-1
        ℇM> 1-(WX/WM)ℇX 进口弹性> 1-(进口/出口)x进口弹性
        ധXℇX + ധM(ℇM-1) > 0
        ധX = ധM -> ℇX+ℇM >1简单假设，进口比例+出口比例>1
        
        The elasticity approach tells us that currency depreciation will result in a greater improvement in the trade deficit when either import or export demand is elastic
        
        Currency depreciation will have a greater effect on the balance of trade when import or export goods are primarily luxury goods, goods with close substitutes, and goods that represent a large proportion of overall spending 奢侈品弹性大
        
        Elasticity of demand is greater for goods with close substitutes, goods that represent a high proportion of consumer spending, and luxury goods in general 有更多替代品的，弹性大
        
        Goods that are necessities, have few or no good substitutes, or represent a small proportion of overall expenditures tend to have less elastic demand 必需品，弹性小
        
        One shortcoming of the elasticity approach is that it only considers trade flows and ignores capital flows, which must also change as a result of a currency depreciation that improves the balance of trade
        
        J-Curve
        
        Import and export contracts delivery payment in the future, import and export quantities may be relatively insensitive to currency depreciation in the short run means currency depreciation may worsen a trade deficit in the short run
        
        Given the existence of such contracts and resulting insensitivity of both import export quantities to currency depreciation, import expenditures may rise in the short run as export prices rise, and export revenues Amy fall as export prices (in the domestic currency) fall, even when the Marshall-Lerner condition is met
        
        This short-term increase in the deficit followed by a decrease when the Marshall-Lerner condition is met
        
        本币贬值，弹性大，能改善经常账户赤字。但有滞后性。原因是进出口，都是由合同定的。1年以内的东西=去年已经定调的=没办法立刻改变，导致这一年里面，出口收回的钱更少了，出口支付的钱更多了，=经常账户更恶化了。只有到一年后，重新签订的合同，因为本币贬值，竞争力加强了 = 一年后，增加出口，减少进口。刚贬值是恶化的。
        
        马歇尔核心条件=都要弹性大，才有用。本币贬值，改善经常账户赤字。要出口增加，进口减少。
        
        本币贬值=出口价格P下降，Qx^D需求上升，弹性大时暴涨。出口总额=PxQ (Q暴涨，总额暴涨)
        
        本币贬值= 进口商品价格贵了，Q下降。弹性大时，P上涨一点点，Q剧烈下降。进口总额PxQ 大下降。
        
        Two approaches to exam how changes in exchange rates affect the balance of trade
        
        Elasticity approach
        
        Absorption approach
        都想回答，本币如果贬值，能否改善经常账户赤字 (X<M 出口<进口)。本币贬值应该有利于出口
      - Absorption Approach
        吸收理论
        
        BT = Y - E
        Y = C + I +G + X-M // X-M = Y - (C+I+G)
        
        Y = domestic production of goods and services or national income
        
        E = domestic absorption of goods and services, which is total expenditure
        
        BT = balance of trade
        (C+I+G)本国吸收. 要让X-M上升，两个办法，让Y上升，或者(C+I+G)下降。
        
        The economy is operating at less than full employment
        本币贬值，本国的商品和资产相对于外国来说变得更远吸引力，需求将从外国转向本国，因此同时提高expenditure和income，因为部分income increase会被储蓄，所以national income 增加超过expenditure, trade balance improved
        没有完全就业，还有空间升Y
        
        The economy is operating at full employment
        Domestic spending的增长带来国内价格上涨，价格上涨抵消此前的商品与资产价格下降，地区一开始本币贬值，带来本国商品和资产价格下降，居民会增加储蓄，增加储蓄改善经常账户，但居民财富通过促销财富回升后，就会回到原来状态，因此无效
        (C+I+G)降下来，一定要降就降G 也很难，经济要衰退
- - - - The difference between the total value to consumers of the units of a good that they buy and the total amount they must pay for those units is called consumer surplus
        
        Producer surplus is excess of the market price above the opportunity cost of production
        
        Total surplus = consumer surplus + producer surplus
      - Comsuer Surplus 比如说LV包2万，为什么女生那么喜欢，愿意去买。total value to consumers支付意愿>其价格。说我认为这包值3万，你卖2万，我会非常愿意买。支付意愿-价格=CS 消费者剩余(消费者觉得自己赚了多少)
        
        假想，均衡价2万，均衡量1000个包。如果出来第一个包的时候，第一个愿意买的人=最想买的人，如果市场只有一个LV包，会出最高的支付意愿，如10万A，消费者剩余CS=8万
        第二个人9.9万，第三个人9.98万等等，直到2万，CS三角面积
        
        Producer Surplus PS=价格-成本
        成本价2000、2001、2002，成本越来越高到2万。价格2万，
        第一个包赚8千，第二个赚7999，三7998
        
        CS + PS = total surplus
        总剩余 = 社会福利，交易提升社会福利，交易过程中，没有人有损失。
        
        某经济学书，战犯的集中营，物质短缺，会交换物质。某经济学家被俘虏在里面，观查到有狱友，拿三根香烟🚬出去，端一圈回来后，三根香烟加一根面包。换换换->东西增加了。他剥削了人家？提升了整个监狱的幸福程度，因为交换带来了Surplus。
        
        按理说，小偷没有减少社会福利，从整个社会来看。你拿1千块钱出去买衣服吃东西 vs 小偷拿你的1千块钱买衣服吃东西。区别？都是吃在肚子里，小偷偷东西本身没有减少社会福利。但小偷导致大家都做锁了，锁本身大家是没有必要的，对社会资源的浪费，有小偷->有锁 -> 预防，增加社会成本 =减少了社会福利。
        
        整体鄙视不诚信欺骗 = 增加交易成本，不信任成本 /账要找人查，假账造成不信任。=社会福利减少
      - Deadweight Lose
        
        不能容忍的是Deadweight Loss无谓损失
        谁都没拿，谁都没吃，莫名其妙消失了。最痛恨损人不利己行为
        如果是损人利己，对整个社会福利来说，没有减少。带来不信任，其他一些成本，另一回事。
        损人不利己，没事在人凳子上放图钉，人疼，放没得利。
        过度生产和生产不足的时候，Deadweight loss。
        Q'<Q*生产不足，价格会高。消费者剩余少，生产者剩余往上提，右边一块黑色面积谁都没拿到 DL。生产浪费
        Q">Q*生产过度，生产成本是上升的，生产成本>高于购买意愿。右边是负的社会福利。大家吃不饱
        
        The reduction in consumer and producer surplus due to underproduction or overproduction is called a deadweight loss
        
        Q"
        
        Q'
  - - - Price elasticity is a measure of the responsiveness of the quantity demanded to a change in price
        
        The formula used to calculate the price elasticity of demand is
        P E = precent change in quantity demand / percent change in price = (∆Q/Q)/(∆P/P)
        
        点弹性
        EPx^d = %∆Qx^d / %∆Px
        = (∆Qx^d/Qx^d) / (∆Px/Px)
        = (∆Qx^d/∆Px)(Px/Qx^d)
        
        弧弹性
        Percent change = change in value / average value =
        (ending value - beginning value) / 1/2(ending value + beginning value)
      - Price elasticity 一定是负数，P越贵，需求下降
        
        If a small percentage price change results in a large percentage change in quantity demanded, the demand for that good is said to be highly elastic. The absolute value of price elasticity is greater than one. -1.5
        
        If a large percentage price change results in a small percentage change in quantity demanded, demand is relatively inelastic. The absolute value of price elasticity is less than one. -0.3
        
        A perfectly elastic demand curve is horizontal, and its elasticity is infinite. If the price increases, quantity demanded goes to zero 水平弹性无穷大，量无限，价格升一点点，Q消失
        
        A perfectly inelastic demand curve is vertical, and elasticity is zero. If the price changes, there will be no change in the quantity demand 垂直无弹性
      - example
        
        Qx^d = 8400 - 400Px + 60I -10Py
        choose $3 for Px
        $50 (thousands) for I
        $20 (thousands) for Py
        
        EPx^d = (∆Qx^d / ∆Px) x Px/Qx^d = -400 x 3/10000 = -0.12
        -> own-price elasticity of demand
        
        EI^d = (∆Qx^d / ∆I) x I/Qx^d = 60 x 50/10000 = 0.3
        -> income elasticity of demand
        
        原函数斜率 60 x I
        
        EPx^d = (∆Qx^d / ∆Py) x Py/Qx^d = -10 x 20/10000 = -0.02
        -> cross-price elasticity
        
        原函数斜率-10 x Py
      - The relation between price elasticity of demand and total revenue
        
        Total revenue is maximized at the price and quantity where demand is unit elastic (price elasticity =-1) and so decreases with both rice increases or price decreases from that level
        
        When price is in the elastic (inelastic) region of the demand curve, a price increase will decrease (increase) total revenue
        
        增加销售收入
        弹性大的，价格P降价一点点->Q需求猛上升，可销售。
        弹性小，P影响Q不大，P大涨Q小降，revenue高
        
        刚需，房子，CFA价格
      - Availability of substitutes. If good substitutes are available, a price increase in one product will induce consumers to switch to a substitute good.
        
        Relative amount of income spent on the good. When the portion of consumer budgets spent on a particular good is relative small, demand for that good will tend to be relative inelastic
        
        Time since the price change. The price elasticity of demand for most products is greater in the long run than in the short run
      - 研究Px -> Qx^d对demand的影响，价格变动影响数量变动。
        需求数量变动的百分数，去除以价格变动的百分数
        现在考试，教材里面只有点弹性(科学)，旧教材弧弹性研究一段，不严谨。
        (∆Qx^d/∆Px)=原方程斜率，=反函数斜率的倒数
        (Px/Qx^d) ≈P/Q，点坐标，乘上一个不变斜率
        弹性=斜率x P/Q
    - - Cross elasticity of demand measures the change in the demand for a good in response to the change in price of a substitute or complementary good
        
        The formula for calculating cross elasticity of demand is:
        Cross elasticity of demand = percent change in quantity demanded / percent change in price of substitute or complement = (∆Qx/Qx) / (∆Py/Py)
        EPy^d = %∆Qx^d / %∆Py = (∆Qx^d/∆Py)(Py/Qx^d)
        
        Cross elasticity of demand is positive for substitute goods. (Example: apple and pear)
        
        Cross elasticity of demand is negative for complement goods. (Example: car and gas)
      - Py -> Qx^d，Py价格对x数量的影响，x汽油
        替代品substitute 公交车同向正系数，梨越贵，苹果需求越大，假设一天一个水果梨/苹果。
        互补品complement 汽车反向，两结合在一起才能使用，一体。光给汽油，没用. 价格弹性负(与x汽油一样)
        E= (∆Qx^d/∆Py)(Py/Qx^d) = 原函数斜率x点
    - - Income elasticity of demand measures the sensitivity of the quantity of a good or service demanded to a change in a consumer's income
        
        The formula for income elasticity of demand is
        Income elasticity of demand = percent change in quantity demanded / percent change in income = (∆Qx/Qx) / (∆I/I)
        EI^d = %∆Qx^d / %∆I = (∆Qx^d/∆I)(I/Qx^d)
      - The application of income elasticity
        
        Normal goods: positive income elasticity, demand rises with income (>0)
        
        Luxuries: high positive elasticity, demand rises strongly with income (>1)
        
        Necessities: normal but low elasticity (between 0 ~ 1)
        
        Inferior goods: negative income elasticity, demand falls with income (<0)
    - - Substitution effect: When the price of Good X decreases, the relative price of Good X against other goods will decrease. Consumer equilibrium moves along the indifference curve, which leads to an increase in the demand of Good X
        替代效应，消费两样东西xy，Px大米下降，必须吃大米/猪肉。大米便宜了，大米需求上升，正效应，更愿意大米去替代猪肉。
        
        Income effect: When the price of Good X decreases, consumer's real purchasing power will change, Real income increases, and budget constraint moves, which lead to a change in the demand of Good X
        收入效应，大米便宜=收入上升。收入上升 -> 大米是normal上升。大米是劣等品inferior下降。
        
        替代正收入正 -> 总效应正；Px下->Qx上
        
        替代正收入负正>负 -> 总效应正；Px下->Qx上
        
        替代正收入负正<负 -> 总效应负；Px下->Qx下，上上
      - Income effect & Substitution effect 共同作用觉得需求量变化
        
        When decrease in the price of Good X:
        
        The substitution effect is positive, and the income effect is also positive consumption of Good X will increase 普通商品
        
        The substitution effect is positive, and the income effect is negative but smaller than the substitution effect-consumption of Good X will increase 一般劣等品
        
        The substitution effect is positive, and the income effect is negative and larger than the substitution effect-consumption of Good X will decrease 吉芬商品(特殊的劣等品)
        
        Normal good is one for which the income effect is positive.
        
        Inferior good is one for which the income effect is negative.
      - 吉芬 Px下 -> Qx下；Px上 -> Qx上正斜率反常
        1845年爱尔兰大饥荒。最早去美国的一批人，爱尔兰人，因为发生大饥荒。为什么闹独立，跟英格兰人耿耿于怀，因为他们发生大饥荒的时候，英格兰人没有充分帮他们，导致他们大量饿死。
        爱尔兰当时种植土豆，原产于南美洲，是哥伦布发现新大陆之后，土豆在全世界开始大量种植。土豆的产量远远超过传统的作物，小片土地可以养活很多人。结果那一年爱尔兰发生了土豆真菌感染，导致大规模的土豆欠收。那时主要消费土豆主食，和一些牛肉。土豆大量欠收->大饥荒，经济糟糕，人都很穷 -> 收入效应强烈。
        很穷 -> 更要消费土豆 ->大家都买土豆 -> 土豆更贵 -> 大家更穷，更要买土豆 ->->-> 恶性循环。大饥荒时的口粮 = 吉芬商品
      - Gifen goods (吉分商品)
        
        Income effect (inferior goods) > Substitution effect
        
        demand curve has positive slope
        
        Veblen goods (韦伯伦商品, Conspicuous goods)
        
        Consumer can not truly value a good until the price is known.
        
        Price is used by the consumer to signal the status in the society.
        
        High price high value → high demand quantity (extremely)
        
        Have a positively sloped demand curve (eg: luxury automobile or very expensive piece of jewelry) firstly.
        
        But when price increases, the slope may be negative.
        
        Two important distinctions between Giffen goods and Veblen goods.
        
        First, Giffen goods are inferior goods (negative income effect), while Veblen goods certainly are not
        
        Second, the existence of Giffen goods is theoretically supported by our rules of consumer choice, while the existence of Veblen goods is not.
      - 对比吉芬商品，引出了韦伯伦商品，挪威裔。有一些商品也是价格越高，需求越大。极端例子，奢侈限量版跑车，手工制作的劳斯莱斯。非常昂贵的珠宝，泰坦尼克号海洋之星，彰显社会地位.
        纽约中央公园旁边的顶级豪宅，一套一两千平，卖3-5亿美金。卖30万不住，掉价。社会金字塔最顶端消费的商品。劳斯莱斯卖20万给我，我也不要，维修费太贵，碰一下就没法修，完蛋。很像，皆是贵，需求量大了。
        区别：1.吉芬商品是劣等品。韦伯伦不是。 2. 吉芬商品能被理论所解释，收入&替代效应。韦伯伦没法被两效应解释
  - - - Accounting profit is the difference between total revenue and total accounting cost.
        
        Accounting profit = total revenue - total accounting (explicit) cost
        
        Economic profit is also referred to as abnormal profit. It is equal to accounting profit less implicit costs.
        
        Economic profit= accounting profit - implicit opportunity costs
        
        Economic profit = total revenue - total economic costs
        
        Economic profit is also referred to as abnormal profit. It is equal to accounting profit less implicit costs.
        
        Implicit costs are the opportunity costs of resources supplied to the firm by its owners.
        
        For private firms, these costs may include
        (1) the opportunity cost of owner-supplied capital and (2) the opportunity cost of the time and (3) entrepreneurial ability of the firm's owners.
        
        For publicly traded firms, implicit costs are typically only the opportunity cost of equity owners' investment in the firm.
      - 核心概念Economic profit 超额利润，也叫abnormal profit，难于长期存在，总体趋向于消失。超额亏损也不会长期存在。整个社会，商业中大家趋向于normal return/profit。
        EP = 会计利润 - 机会成本。一天500上课，500 AP - next best下一个最好的选择，肯德基做收银员200 = 超额利润300。其实AP是550，但50算作餐费和交通费 =explicit cost。
        = AP - AC显性成本50 - implicit隐性成本(没真发生，假设)
        麦当劳180不回去，为什么会去金程讲课，因为能abnormal P超额利润赚到500，多赚300。
        假设讲课这份工作，跟肯德基端盘子完全想通的
        其实不需要非上市不上市，算资金成本，人力成本
        implicit cost有两种情况
        
        一种是private firm非上市公司。假设老板亲力亲为。金程，汤老板投资1千万，如果不投资金程里，可存银行，买皮豆皮，炒股票，赚到资金应有的利润，假如说每年赚10%=1百万资金机会成本。2和3加在一起，汤老板自己的机会成本，时间+能力。不开金程，可以去华为，作一个高管，部门总，能够拿到3百万一年。=老汤开金程的机会成本=一年 4百万。金程如果赚到了6百万->有超额利润。
        
        对应的是publicly traded firm上市公司。假设老板不退出管理层，假设职业经理人，自己不打理。就出了个1千万的资金每年有10% 的机会成本opportunity cost of equity，自己本人的机会成本没算了。上市公司，老板不一定退出管理，这要自己的时间精力机会成本算进去。
      - Normal Profit is the accounting profit that makes economic profit zero 正常利润=个人机会成本=implicit cost
        *Accounting profit = economic profit + normal profit
        比如说金程revenue3千万，explicit cost 员工工资，场地租金，折旧，都是会计成本accounting cost，假如16百万。那么Accounting profit是14百万，有4百万汤老板的资金投入成本+去华为3百万。那么金程这家公司的超额利润=1千万。
        Revenue = Accounting profit(Economic profit+implicit cost) + Accounting cost(explicit cost)
        Economic cost (opportunity cost) = implicit cost + explicit cost
    - - Total, Average, Marginal Products
        
        Total product (TP) is sum of the output from all inputs during a time period; usually illustrated as the total output (Q) using labor quantity (L)
        
        Average product (AP) is total product divided by the quantity of a given input; measured as total product divided by the number of worker hours used at that output level (Q/L)
        
        Marginal product (MP) is the amount of additional output resulting from using one more unit of input assuming other inputs are fixed; measured by taking the difference in total product and dividing by the change in the quantity of labor (∆Q/∆L). MP=TP斜率
      - TP产量，劳动力L，产出Q
        AP每个工人生产多少件，总产量/工人数 TP/L
        MP 边际，奥地利学派引入。新增带来的新增。新增一单位劳动力，带来的产量的增加。TP2-TP1, TP3-TP2
        经济学里，水很有用，没水不能活两天，沙漠里半天。水有用，很便宜。钻石无用，很贵。经济学家争论2百年没解决。解决这问题，边际概念，一个物品的价值不取决于它的绝对，而取决它的MP，水为什么便宜，再给一杯没用。钻石💎边际效益不会降低，再给3百颗多多益善，没有边际效益递减 =钻石值钱。也解释了沙漠里，钻石边际效益很低，水很高。
      - 每新增工人带来的产量逐渐减少，MP下降
      - 边际效应递减规律
        
        The law of diminishing marginal returns states that as more and more resources (such as labor) are devoted to a production process, they increase output but at an ever decreasing rate
        
        MP是TP的斜率，MP=0时候 TP最大
        
        MP > AP，AP上升
        MP < AP，AP下降
        MP = AP，AP最大
      - 销售额
        
        Total revenue(TR) for any firm that charges a single price to all customers is calculated as price multiplied by quantity sold, or TR=ΣPxQ
        
        Average revenue(AR) is equal to total revenue divided by the quantity sold, AR=TR/Q
        
        Marginal revenue(MR) is the increase in total revenue from selling one more unit of a good or service.
        
        Σ=多组产品销售收入，蓝衬衫，白衬衫。总销售额TR=ΣP价格xQ数量
        AR=TR/Q 平均价格，总销售额/数量
        MR 新卖一件衬衫，带来的销售收入的增加。
        
        example
        
        Assume demand for a product can be specified as
        Qd = 50 - 2P 假设一个商品需求，原函数
        We can get
        P = 25 - 0.5Qd 反函数
        TR = P x Qd = 25Qd - 0.5Qd^2
        AR = TR / Qd = (25Qd - 0.5Qd^2) / Qd = 25 - 0.5Qd
        MR = 25 - Qd
        
        CFA里面唯一需要知道的高等数学，一阶导数
        y=ax^b <> dy/dx = a • b • x^(b-1)
      - 市场
        
        完全竞争
        
        Under perfect competition
        
        The individual firm has virtually no impact on market price, price taker
        
        The individual seller face a horizontal demand curve over relevant output ranges at the price level established by the market
        
        Under perfect competition, MR = P
        
        在现实世界里，真正的完全竞争不存在。通常会假设，农产品，大白菜是市场完全竞争。很多的大白菜提供厂商，大白菜与大白菜之间几乎没差别。进入和离开大白菜市场很容易，批发几个大白菜就进入了，回去自己烧了吃就退出了。大白菜个体没有定价权，
        对于个体公司而言，只能接受价格price taker。都是卖2元，demand curve水平线。MR=P，再卖一斤都是2块。
        
        非完全竞争
        
        Under imperfect competition
        
        Firms face downward-sloping demand curve, price searchers
        
        Average revenue (AR) and marginal revenue (MR) will decline as quantity of goods sold increase
        
        AR is not equal to MR for any quantities greater than zero
        
        Total revenue (TR) is maximized when MR=0
        
        The relationship between MR, P, and price elasticity of demand: MR = P [1-1/Ep]
        
        有定价权。正常情况下负斜线弹性负数。
        不同价位，不同Demand -> 觅价者 price searchers
        MR P 再卖一单位
        
        Marginal Revenue
        
        MR is equal to price with an adjustment equal to quantity times the slop of demand curve.
        A perfectly competitive firm faces a demand curve with a slope of zero. Substituting 0 for ∆P/∆Q into the expression given, it becomes clear that MR is equal to price for the perfectly competitive firm.
        
        TR = (P) (Q)
        MR = ∆TR / ∆Q
        ∆TR = (P)(∆Q) + (Q)(∆P)
        MR = (P)(∆Q)/∆Q + (Q)(∆P)/∆Q
        = P + Q(∆P)/∆Q
        = P (1+ ∆P/∆Q x Q/P)
        = P (1 + 1/e)
        = P (1 - 1/|e|)
        弹性Elasticity=∆Q/∆P x P/Q = e
        弹性一定是个负数 -> - |e|
    - - The short term/run is defined as a time period for which quantities of some resources are fixed, such as buildings, technology and equipment
        
        The technology of production is fixed in the short run and is a constraint on a firm's ability to increase production.
        
        Typically, economists treat labor and raw materials as variable in the short run, holding plant size, capital equipment, and technology constant. All of these factors become variable in the long run.
      - long&short在财务，<1年 <1个业务周期 short; >1年 >1个 long。
        在经济学里面讲，
        short 有固定成本，建筑技术设备。只有短期有固定。
        长期一切，皆可变。
      - cost
        
        Total fixed cost (TFC) is the cost of inputs that do not vary with the quantity of output and cannot be avoided over the period of analysis.
        
        Total variable cost (TVC) is the cost of all inputs that vary with output over the period of analysis.
        
        Total cost (TC) is the sum of all costs (fixed or variable, explicit and implicit) of producing a specific level of output.
        
        成本分为，固定/可变成本时 -> 短期。可变+固定=总成本
        平均固定成本 = 固定成本 / 总数
        平均可变成本 = 可变成本 / 总数
        平均成本 = 总成本 / 总数 = 平均固定+平均可变
        边际成本 = 总成本变化 / 总数量变化
        
        Total cost = total fixed cost + total variable cost
        Marginal cost = change in total cost / change in output
        Average fixed cost = total fixed cost / output
        Average variable cost = total variable cost / output
        Average cost = total cost / output = AFC+AVC
        
        MC
        
        AFC slopes downward.
        
        The vertical distance between the ATC and AVC curves is equal to AFC.
        
        MC declines initially, then increases.
        
        MC intersects AVC and ATC at their minimum points.
        
        ATC and AVC are U-shaped.
        
        Minimum point on the ATC curve represents the lowest cost per unit, but it is not necessarily the profit-maximizing point.
        
        TFC do not vary with output, so MC reflects only changes in TVC.
        
        AFC=FC/Q 平均固定成本不断下降，因为数量一直上升。
        ATC=AFC+AVC，AFC不断下降
        MC先下降，再上升。皆是U型
        AVC不断下降(形成规模)，MC交点AVC，AVC不断上升
        ATC不断下降，MC交点ATC，ATC不断上升
        交点，在最低点。
        平均成本ATC最低，并不一定是利润最大。
        
        (Dis)economies of Scale
        
        U型。一开始规模起来，成本下降。搞到一定程度，成本一定会上升。以前富士康，一开始越做越做大，然后跳楼，负面新闻，各种各样来了。曾经报道，大规模械斗，数百人参加，持械斗殴≈小规模战争。冷兵器战争。某某地区来的人，跟另外一个地区来的人，两个人，稍微有小冲突。一个人对某地区来的人，出言污蔑。老乡听见了，老乡抱团就怒了，两个地区来的人就械斗了。千人打起。富士康有大规模的保安队，相当于是个内部军队，如果发生械斗发生私人，几百人不得了。保安队伍很庞大，保安队伍要钱。相当于富士康变成一个城堡一样，在城堡里面必须提供各种各样的服务。最初成本低，分工，招进来人，不用叠被子，不用烧饭，统一起床号一吹，大家去刷了牙，就去吃饭。上面有人进来，帮你叠被子。效率高，各做各的。但是成本逐渐上升。
        
        The downward sloping segment of the long-run average total cost curve indicates the economies of scale
        
        The upward sloping segment of the long-run average total cost curve indicates that diseconomies of scale are present when average unit costs rise as the scale of the business increase. 规模不经济 = 成本更大 = 越大越不经济
        
        利润最大化
        
        平均成本ATC最低，并不一定是利润最大。(是不是金程，只搞一个班，一个教室，一个老师，给讲最多的课，是不是成本最低。对于老师来说，什么都不要，研究员不要，助理也不要，资料自己搞，自己发的讲义，发给大家。对于经纪人来说，利润最大化了吗？只有50个学生，撑死只挣50。利润率很高，但赚很少40万。如果搞很多个班1000，每个班赚地不多10万，可赚1亿)
        
        Profit maximization occurs when
        
        The difference between total revenue (TR) and total costs (TC) is the greatest;
        
        Marginal revenue (MR) equals marginal cost (MC); (MR=MC)
        
        The revenue value of the output from the last unit of input employed equals the cost of employing that input unit.
        
        TR - TC =区别最大时，利润最大
        MR = MC 利润最大
        MR > MC 再生存/卖，还有利润
        MR < MC 再卖，是亏，成本大了
        
        profit = R-C = R(Q) - C(Q)
        max profit = 求极值
        dprofit / dQ = MR - MC = 0
        MR = MC
        
        Break Point and Shutdown Point
        盈亏平衡点，倒闭点。
        
        Under perfect competition
        
        Revenue-Cost Relationship | Short-Run Decision | Long-Run Decision
        AR > ATC | Stay in market | Stay in market
        AR = ATC | Breakeven point
        AVC < AR < ATC | Stay in market | Exist market
        AR = AVC | Shutdown point
        AR < AVC | Shut down production to zero | Exit market
        
        完全竞争，YX轴，PQD弹性无限，完全是水平线。大白菜2块一斤
        2块=P=D=MR=AR，都2块，皆同一个价格，可得平均数
        
        MC = supply
        
        Under imperfect competition
        
        Revenue-Cost Relationship | Short-Run Decision | Long-Run Decision
        TR > TC | Stay in market | Stay in market
        TR = TC | Breakeven point
        TVC < TR < TC | Stay in market | Exit market
        TVC = TR | Shutdown point
        TR < TVC | Shut down production to zero | Exit market
        
        非完全竞争市场，PQD斜下线，PQ不一定，不同价格对应的数量Q不一样，难求平均，算总数。
        盈亏平衡=不赚不亏，profit=0=TR-TC
        有没有生意，固定成本都得扣 -> 所以决定一个班到底开不开，看到底能不能覆盖可变成本。
        比如说 TFC 10w, VC 师资讲义人员3w。学费5k/人，招6名学员 ->愿意开班。如果收的学费3.6w，=抵掉VC, 0.6补点TFC.
        比如说只能只能招来2名学员，成本1万，只能收8k。=招来2人，亏-0.2万。教室固定费用亏了10w，招来还亏2k = 还不如不开。
        所以只要 TR > TVC, 短期还会开下去，长期没法干。
        TR < TVC, 连变动成本都支付不了，短期就关掉。
        航空公司有时候人少也飞，有时候打电话航班取消了。
        长期得涵盖>总成本；短期涵盖>变动成本
- - - - inventory to sales ratio
        
        考试喜欢 inventory to sales ratio, 在经济扩张上升的时候，不断地加工扩张，inventory存货不断上升。到达最巅峰时，越扩张越贵，突然间卖不出去了，就像房价太贵，大家都不买。ratio达到最高点。然后开始衰退，不在乎生产，去库存也在卖。到经济低谷时trough，突然大家发现这东西便宜，ratio接近于最低。开始下一波，重建库存开始生产，又到最高。企业在组织生产时，表现出了滞后性。
        
        Inventories are an important business cycle indicator. Firms try to keep enough inventory on hand to meet sales demand but do not want to keep too much of their capital tied up in inventory. As a result, the ratio of inventory to sales in many industries tends toward a normal level in times of steady economic growth.
        
        When an expansion is approaching its peak, sales growth begins to slow, and unsold inventories accumulate. This can be seen in an increase in the inventory-sales ratio above its normal level. (扩张后期)
        
        Firms respond to an unplanned increase in inventory by reducing production, which is one of the cause of the subsequent contraction.
        
        The opposite occurs when a contraction reaches its trough. Having reduced their production levels to adjust for lower sales demand, firms find their inventories becoming depleted more quickly once sales growth begins to accelerate. This causes the inventory-sales ratio to decrease below its normal level. (衰退后期)
        
        To meet the increase in demand, firms will increase output and the inventory-sales ratio will increase toward normal levels.
      - Utilization of labor levels
        
        Utilization of labor levels
        
        Adding and subtracting workers in lockstep with changes in economic growth would be costly for firms, in terms of both direct expenses and the damage it would do to employee morale and loyalty.
        
        Firms typically begin by changing how they utilize their current workers producing less or more output per hour or adjusting the hours they work by adding or removing overtime.
        
        Only when an expansion or contraction appears likely to persist will they hire or lay off worker
        
        劳动力的使用，主要因为工会组织，中国是劳动法。开除工人困难，要赔偿，工会要闹事。经济达到巅峰后，开始衰退，衰退过程中，首先不开除工人，首先减少工作时长，低端工人都是计时。经济差到很差才开除。劳动力的使用时滞后的。然后开始复苏，刚开始复苏时加班，不会新雇佣，怕复苏是假的，开除又会闹。复苏很久后，才开始雇佣人，劳动力是滞后的。
      - Utilization of physical capital levels
        
        Because it is costly to adjust production levels by frequently buying and selling plant and equipment, firms first adjust their production levels by using their existing physical capital more or less intensively.
        
        As an expansion persists, firms will increase their production capacity by investing more in plant and equipment.
        
        During contractions, however, firms will not necessarily sell plant and equipment outright. They can reduct their physical capacity by spending less on maintenance or by delaying the replacement of equipment that is near the end of its useful life.
        
        经济巅峰开始衰退，不会一开始卖机器，首先停止light equipment小设备，比如说煤矿的榔头。重设备，工厂，加工车间在经济真衰退不行了退了。合同里有赔偿条款，建造周期可3年，刚刚不行，也不想赔5，8千万。但如果经济真不行，十亿车间就算赔钱也不要了。低谷上来，买入轻设备，复苏相当长时间了，买重设备。
    - - Key Terms in the
        Labor Market
        
        Empolyed: number of people with a job
        
        This figure normally does not include people working in the informal sector (eg unlicensed cab drivers, illegal worker)
        
        Labor force: number of people who either have a job or are actively looking for a job.
        
        This number excludes retirees, children, stay-at-home parents, full-time students, and other categories of people who are neither employed nor actively seeking employment
        
        Participation ratio (also referred to was the activity ratio or labor force participation rate) is the percentage of the working-age population who are either employed or actively seeking employment
        
        Labor force participation rate = labor force / working-age population x 100 劳动参与率
        
        Unemployment can be divided into three categories:
        
        Frictional unemployment results from the time lag necessary to match employees who seek work with employers needing their skills. 摩擦型失业，彼此在寻找对方
        
        Structural unemployment is caused by long-run changes in the economy that eliminate some jobs while generating others for which unemployed workers are not qualified 结构性：技术进步
        
        Cyclical unemployment is caused by changes in the general level of economic activity 经济周期导致的失业
        (Working age population 不想工作 (Labor force 愿意工资 (Employment 失业))) 失业率不包括不想工作的。
        
        Unemployment rate is the precentage of people in the labor force who are unemployed.
        Unemployment rate = number of unemployed / labor force x100
        
        Unemployment rate is a lagging economic indicator of the business cycle
        
        Firms tend to be slow to hire or lay off workers at business cycle turning points/ This also cause the unemployment rate to lag the business cycle
        
        Producivity declines early in contractions as firms try to keep employees on despite producing output
        
        Productivity increase early in expansions as firms try to produce more output but are not yet ready to hire new workers.
        
        Because every individual provides a different type and quality of labor, some segments of the economy may have trouble finding enough qualified workers even during a contraction. As a result, the non-accelerating inflation rate of unemployment (NAIRU), also called the natural rate of unemployment (NARU), can be higher than the rate associated withe the absence of cyclical unemployment. 自然失业率：充分就业下的失业率or不会造成通胀的失业率。
        
        Underemployed 拿低于自己水平的工作
        
        Person who has a job but has the qualifications to work a significantly higher-paying job
        
        Discouraged worker 不想工作，不算失业类
        
        Person who has stopped looking for a job, When economy returns to be good, the unemployment rate will increase because the discouraged workers enter the labor force and has not found the job
        
        Voluntarily unemployed
        
        Person voluntarily outside the labor force
        
        For example: a jobless worker refusing an available vacancy for which the wage is lower than their threshold or those who retired early
      - Inflation
        
        Inflation
        is a persistent increase in the price level over time
        
        If inflation is present, the prices of almost all goods and services are increasing
        
        Inflation rate is the percentage increases in the price level, typically compared to the prior year
        
        Hyperinflation: an extremely fast increase in aggregate price level, which corresponds to an extremely high inflation rate
        
        Deflation 通缩，递延消费明年再买
        
        A sustained decrease in aggregate price level, which corresponds to a negative inflation rate
        
        Disinflation 小涨
        
        A decline in the inflation rate
        
        Disinflation is very different from deflation because even after a period of disinflation, the inflation rate remains positive and the aggregate price level keeps rising (although at a slower speed)
        
        Inflation Measurement - CPI
        The consumer price index (CPI) 消费者物价指数
        
        CPI is the best known indicator of US inflation. The CPI measures the average price for a defined "basket" of goods and services that represents the purchasing patterns of a typical urban household. 5千美国商品
        CPI = cost of basket at current prices / cost of basket at base period prices x100
        
        Analysts who compare price indexes for different countries should be aware of differences in their composition.
        
        The weights assigned to each good and service reflect the typical consumer's purchasing patterns, which are likely to be significantly different across countries and regions.
        
        There can be differences in how the data are collected
        智利的大罢工/暴乱，地铁票价上涨引起的。
        
        Other inflation measurements
        
        Price index for personal consumption expenditures
        
        GDP deflator
        
        Producer price index (PPI): reflect future CPI
        
        Reflect the price changes experienced by domestic producers in a country
        
        Include: fuels, farm products (such as grains and meat), machinery and equipment, chemical products (such as drugs and paints), transportation equipment, metals, pulp and paper, etc
        
        Wholesale price index (WPI) 制造商价格指标
        
        In some countries, the PPI is called the WPI
        
        For both consumer and producer prices, analysts and policymaker often distinguish between headline inflation and core inflation
        
        Headline inflation refers to price indexes for all goods
        
        Core inflation refers to price indexes that exclude food and energy. Thus, core inflation can sometimes be a more useful measure of underlying trend in prices 核心排除食品和能源，对于大部分国家，食品能源是进口的，上涨也是国际价格涨，非本国通胀。
        
        指数的计算方式
        
        Laspers Index 过去的一篮子货品物价
        
        Laspeyres index: uses a constant basket of goods and services. Most countries calculate consumer price inflation this way. 过去，高估通货膨胀。
        
        Three factors cause a Laspeyres index of consumer price to be biased upward as a measure of the cost of living:
        
        New goods: Older products are often replaces by newer, but initially more expensive, products. New goods are periodically added to the market basket, and the older goods they replace are reduced in weight in the index. This biases the index upward. 没考虑到新产品，就会高估。数字手机500，现在智能手机5k 高估价手机实则不同新产品
        
        Quality changes. If the price of a product increases because the product has improved, the price increase is not due to inflation but still increases the price index 质量改变，旧桌子2百，新桌子高分子记1k
        
        Substitution. Even in an inflation-free economy, prices of goods relative to each other change all the time. When two goods are substitutes for each other, consumers increase their purchases of the relatively cheaper good and buy less of the relatively more expensive good. Over time, such changes can make a Laspeyres index's fixed basket of goods a less accurate measure of typical household spending. 替代品电缆铜 5k一吨，现在硅沙子20k一吨。L仍记铜，2万块=高估了。
        
        Solution for Laspeyres index biases 解决偏见。
        
        Many countries adjust for the quality of the products in a basket, a practice called hedonic pricing 功能/质量不一样了，进行了调整。电视剧画中画功能增值扣掉。
        
        New products can be introduced into the basket over time
        
        The substitution bias can be somewhat resolved by using chained price index formula
        
        One such example is the Fisher index, which is the geometric mean of the Laspeyres index and the Paasche index
        IF = √(IP x IL) 求和平均数，调整规避偏见
        
        Paasche index is an index formula using the current composition of the basket 现在的货品物价
        
        Example, CPI Calculation
        
        Time | May 2017 | June 2017
        Goods | Quantity | Price | Quantity | Price
        Rice | 50kg | ¥3/kg | 70kg | ¥4/kg
        Gasoline | 70liters | ¥4.4/liter | 60L | ¥4.5/L
        
        Laspeyres index calculation (set the price index in May 2017 to 100)
        
        For May 2017, the total value of the consumption basket is:
        Value of rice + Value of gasoline = (50x3) + (70x4.4) = 458
        
        For June 2017, the total value of the consumption basket is:
        Value of rice + Value of gasoline = (50x4) + (70x4.5) = 515
        Laspeyres index = 515/458 x100 = 112.45
        
        Paasche index calculation
        Paasche index 06/2017 = [(70x4)+(60x4.5)] / [(70x3)+(60x4.4)] x100 = 116.03
        
        Fisher index 06/2017 = √(IP x IL) = √(116.03x112.45) = 114.23
        
        Cost-push inflation
        成本推动的膨胀
        
        An inflation that results from an initial increase in costs. The two main sources of increases in costs are
        
        An increase in money wage rates
        
        An in crease in money prices of raw materials
        
        Steps in cost-push inflation
        
        : money wage rate & money prices of raw materials 上 -> SAS左移 (SAS0 -> SAS1) -> stagflation (the price level increases and the economy experiences inflation)
        
        : the Fed increases the quantity of money -> AD右移(AD0 -> AD1)
        
        : the price of goods 上 -> the price of material 上 -> stagflation -> 价格持续上涨...
        
        Demand-pull inflation
        需求拉动
        
        an inflation that results form an initial increase in aggregate demand. Factors
        
        increase in the quantity of money
        
        increase in government purchases
        
        increase in exports
        
        Steps
        
        : AD0 -> AD1, real GDP > potential GDP & inflation gap (short run)
        
        : workers demand higher money wage rate, SAS0 -> SAS1 (long run)
        
        : AD increases year after year. AD puts continual upwards pressure on the price level. The economy now experience demand-pull inflation (价格持续上涨)
    - - Leading economic indicators: have turning points that usually precede overall economy 领先指标
        
        Coincident economic Indicators: have turning points that are usually close to overall economy 同期
        
        Lagging economic indicators: have turning points that are usually later to overall economy 滞后
        
        We should be aware that the classification of leading, coincident, and lagging indicators reflect tendencies in the timing of their turning points, not exact relationship with the business cycle
        
        Not all changes in direction of leading indicator indexes have been followed by corresponding changes in the business cycle, and even when they have , the lead time has varied
        
        This common criticism is summed up in the often repeated comment, " Declines in stock prices have predicted nine of the last four recessions."
      - Leading
        领先
        
        Stock // S&P 500 Stock index
        reason: Because stock prices anticipate economic turning points, both up and down , their movements offer a useful early signal on economic cycles
        股市，经济的晴雨表。中国股市其实也是取得非常高回报，中国股市特点回撤巨大。如果坚持投资其实是赚钱的，主要是因为涨了追进去，跌了逃掉，在追涨杀跌所有持续亏钱。
        
        Money // Money supply, real M2
        reason: Because money supply growth measures the tightness or looseness of monetary policy, increases in money beyond inflation indicate easy monetary conditions and a positive economic response, whereas declines in real M2 indicate monetary restraint and a negative economic response.
        M2广义货币供应量，领先，因为货币供应先增加，经济就将要复苏。货币供应一增加，消费者就会贷款消费，企业就会借钱投资。
        
        Interest // interest rate spread, between 10-year treasury yields and overnight borrowing rates (federal funds rate)
        reason: Because long-term yields express market expectations about the direction of short-term interest rates, and rates ultimately follow economic cycle up and down, a wider spread , by anticipating short rate increases, also anticipates an economic upswing. Conversely, a narrower spread, by anticipating short rate decreases, also anticipates an economic downturn
        时间利差，10年债卷的利息，减到隔夜债借的利息。到期日的利息。短期利率比较稳定，短期利率下降=10年利率下降=未来经济不好=因为经济不好，央行才降息。预示经济
        
        Expectation // Index of Consumer Expectations, University of Michigan
        reason: Because the consumer is about two-thirds of the US economy and will spend more or less freely according to his or her expectations, this gauge offers early insight into future consumer spending and consequently directions in the whole economy
        消费者信心指数，信息一定是领先的
        
        Hours // Average weekly hours, manufacturing
        reason: Because businesses will cut overtime before laying off workers in a downturn and increase it before rehiring in a cyclical upturn, these measures move up and down before the general economy
        工作时长领先，雇佣是滞后的。经济快要好了，老板接到新订单，同步工作。立刻加班，工人记时当天结算，非常短期。(高端人计算期越长)。加班=生意好经济复苏。后面发货时未来的。
        
        Insurance // Average weekly intial claims for unemployment insurance
        reason: This measure offers a very sensitive test of intial layoffs and rehiring
        初次申请失业救济，如果下降=已经上班去了。失业一下子上升=指标领先
        
        Orders // Manufacturers' new orders for consumer goods and materials
        reason: Because businesses cannot wait too long to meet demands for consumer goods or materials without ordering, these gauges tend to lead at upturns and downturns. Indirectly, they capture changes in business sentiment as well, which also often leads the cycle
        订单一大的话，今晚就加班
        
        Deliveries // Vendor performance slower deliveries diffusion index
        reason: by measuring the speed at which businesses can complete and deliver an order, this gauge offers a clear signal of unfolding demands on businesses 延迟发货
        
        Manufacturers' new orders for non-defence capital goods
        reason: In addition to offering a first signal of movement, up or down, in an important economic sector, movement in this area also indirectly captures business expectations
        非国防资本货物=重型机器，大型设备。订单总是领先
        
        Building permits for new private housing units
        reason: because most localities require permits before new building can begin, this gauge foretells new construction activity.
        新屋开工许可 = 订单
        美国晾衣服会被投诉，低端社区才晾衣服，所以晾衣服拉低房价。高端用烘干机。
      - Coincident
        同期
        
        Employees on non-agricultural payrolls
        reason: Once recession or recovery is clear, businesses adjust their full-time payrolls
        工资当期，按当月表现
        
        Aggregate real personal income (less transfer payments)
        reason: By measuring the income flow form non-corporate profits and wages, this measure captures the current state of the economy
        个人收入income和payroll密切相关
        
        Industrial Production Index
        reason: Measures industrial output, thus capturing the behavior of the most volatile part of the economy. The service sector tends to be more stable 产量
        
        Manufacturing and trade sales
        reason: In the same ways as aggregate personal income and the industrial production index, this aggregate offers a measure of the current state of business activity 销量
      - lagging 滞后
        
        Average Duration of Unemployment
        reason: Because businesses wait until downturns look genuine to lay off, and wait until recoveries look secure to rehire, this measure is important because it lags the cycle on both the way down and the way up 平均失业时长，滞后
        
        Inventory-sales ratio
        reason: Because inventories accumulate as sales initially decline and then, once a business adjusts its ordering, become depleted as sales pick up, this ratio tends to lag the cycle
        
        Change in unit labor costs
        reason: Because businesses are slow to fire workers, these costs tend to rise into the early stages of recessions as the existing workforce is used less intensely. Late in the recovery when the labor market gets tight, upward pressure on wages can also raise such costs. In both cases, there is a lear lag at cyclical turns
        工资在经济好坏很久了，涨跌
        
        Average bank prime lending rate
        reason: Because this is a bank administered rate, it tends to lag other rates that move either before cyclical turns or with them
        银行贷款指导利率，政策性。房地产非常过热了，国家才把房贷利率提上来。
        
        Commercial and industrial loans outstanding
        reason: Because these loans frequently support inventory building, they lag the cycle for much the same reason that the inventory-sales ratio does. 企业贷款是滞后的。反映滞后，房子在跌快时不贷款，房子涨地很高要跌了，人冲进去贷款。
        
        Ratio of consumer instalment debt to income
        reason: Because consumers only borrow heavily when confident, this measure lags the cyclical upturn, but debt also overstays cyclical downturns because households have trouble adjusting to income losses causing it to lag in the downturn
        个人贷款，经济最繁荣时会去借钱消费。这些年在去杠杆，借了太多的钱，裸贷少了，暴力追收。
        
        Change in consumer price index for services
        reason: Inflation generally adjusts to the cycle late, especially the more stable services area. 服务业是滞后的，培训教育幼儿园。工资下降也不会立刻换幼儿园。
- - - - Ricardian Model
        
        In the Ricardian model, labor is the only (variable) factor of production. Differences in labor productivity, reflecting underlying differences in technology, are the source of comparative advantage and hence the key driver of trade in this model 劳力是唯一的生产要素。因为科技水平不同，导致劳动生产效率不同，所以有了比较优势
        
        In the two-country model, if countries vary in size, the smaller country may specialize completely, but may not be able to meet the total demand for the product
        
        The larger country may be incompletely specialized, producing and exporting the good in which it has a comparative advantage but still producing (and consuming) some of the good in which it has a comparative disadvantage
        
        It is important to recognize that although differences in technology may be a major source of comparative advantage at a given point in time, other countries can close the technology gap or even gain a technological advantage
      - Heckscher-Ohlin Model
        
        In the Heckscher-Ohlin Model (also known as the factor-proportions theory), both capital and labor are variable factors of production. 资本+劳动力两要素
        
        Differences in the relative endowment of these factors are the source of a country's comparative advantage
        
        A country has a comparative advantage in goods whose production is intensive in the factor with which it is relatively abundantly endowed, and would tend to specialize in and export that good.
        
        A country in which labor is relatively abundant would export relatively labor-intensive goods and import relatively capital-intensive goods
        
        It allows for possibility of income redistribution through trade
        
        Favorable impact on the abundant factor, and a negative impact on the scarce factor
        
        The price of the relatively less scare (more available) factor of production in each country will increase 占市场后，劳动价值上涨。中国为全世界生产，=需要更多劳动力
        
        The good that a country imports will fail in price ( that is why they import it), and the good that a country exports will rise in price
        
        美国资本飞机制造(出）
        中国劳动密集型纺织品(出)
  - - - Have support from Economists
        
        Infant industry: Protection from foreign competition is given to new industries to give them an opportunity to grow to an internationally competitive scale and get up the learning curve in terms of efficient production methods 幼期工业，起步需要保护
        
        National security: Protect producers of goods crucial to the country's national defence so that those goods are available domestically in the event of conflict 高铁，民间反对日本引进，万一开战，有后门完蛋。
      - Little support in theory 经济学家不支持
        
        Protecting domestic jobs: While some jobs are certainly lost, and groups and regions are negatively affected by import restrictions, other jobs (in export industries or growing domestic goods and service industries) will be created, and prices for domestic consumers will be less without import restrictions 保护国内工作。保护国内从事汽车行业人的工作，伤害了潜在进口汽车业务人的工作。运输销售售后
        
        Protecting domestic industries: Industry firms often use political influence to get protection from foreign competition, usually to the detriment of consumers, who pay higher prices 保护国内产业。家电是中国主要产业，电视剧卖全球，日本家电全面收缩。
    - - Tariffs: taxes on imported good collected by the government 进口关税
        
        Quotas: limits on the amount of imports allowed over some period 进口配额，限定量
        
        Export subsidies: government payments to firms that exports goods 出口补贴，鼓励出口
        
        Minimum domestic content: requirement that some percentage of product content must be from the domestic country 最低国产比例，假设规定手机国产化率40%本地生产(没)
        
        Voluntary export restraint: a country voluntarily restricts the amount of a good that can be exported, often in the hope of avoiding tariffs or quotas imposed by their trading partner 自愿的出口限制，光伏行业，自己不要搞价格战，不出太多。太多会有反倾销税，不合算。
      - Welfare effects of an
        import tariff or quota
        
        Consumer surplus (A+B+C+D)
        Producer surplus +A
        Tariff revenue or Quota rents +C
        National welfare -B-D ; =dead weight loss
        
        P* 没有加税时的世界价格。Pt有进口关税。美国角度。衬衫👕10美元一件。如果世界价格高的话，肯定进不了美国市场。10块厂商不愿意供应，需求又大 = Q4-Q1 =进口量，缺口补了 = 衬衫在美国=10块一件。=+A+B+C+D 上边大三角形面积 =消费者剩余。生产者剩余=在左下边A小三角形面积 =A。
        P1 加了关税，+30% = $13衬衫，需求下降到Q3，价格上升，美国厂商更愿意生产了，供量到Q2。进口量剩余Q3-Q2。消费者剩余变成Q3以上的三角形面积 =减少ABCD四块面积。生产者剩余+A，提升获得A块面积。政府收了Q3-Q2的量x价格x30%的税 = C面积。B和D没人拿走 = 无谓损失 =社会福利减少。
      - Voluntary Export
        
        Voluntary export restraint (VER) referes to a voluntary agreement by a government to limit the quantity of a good that can be exported
        
        It results in a welfare loss to the importing country equal to that of an equivalent quota with no government charge for the import license; that is, no capture of the quota rents
        
        Export subsidies are payments by a government to its country's exporters
        
        Export subsidies benefit producers (exporters) of the good but increase prices and reduce consumer surplus in the exporting country
        
        In a small country, the price will increase by the amount of subsidy to equal the world price plus the subsidy
        
        In the case of a large exporter of the good, the world price decreases some benefits from the subsidy accrue to foreign consumers, while foreign producers are negatively affected
        
        Effects of import quotas, tariffs and VERs, with respect to the domestic (importing) country
        Reduce imports, Increase price, Decrease consumer surplus, Increase domestic quantity supplied, Increase producer surplus
    - - | Tariff | Import Quota | Export Subsidy | VER
        Impact on | Importing country | Exporting country | Importing country
        Producer surplus | Increases | Increases | Increases | Increases
        Consumer surplus | Decreases | Decreases | Decreases | Decreases
        Government revenue | Increases | Mixed (depends on whether th quota rents are captured by the importing country through sale of licenses or by the exporters) 取决于政府收不收配额钱=税 | Fails (government spending rises) | No change (rent to foreigners)
        National welfare | Decreases in small country/Could increases in large country(import) | Decreases in small country/Could increases large country | Decreases | Decreases
      - A small country is one that is a price taker in the world market for a product and cannot influence the world market price. When a large country imposes a tariff, the exporter reduces the price of the good to retain some of the market share it could lose if it did not lower its prices
      - 政府有没有收入，取决于配额要不要钱。
        福利减少，因为有DWL，但不一定。川普给中国加关税后，很快又恢复新高 =福利没减少。大国福利不减，甚至增加，美国是进口大国，衬衫原来10，川普增中国3，中国会变13. 墨西哥，印度衬衫还是10。中国企业看美国是个巨大的市场，扛不住市场的损失，中国企业就会降价 = 美国对中国加了关税后，中国股市暴跌的原因。中国会降价到7. 现实会降8，+3=11，美国人可能会说11比印度10质量好一点。但销量还是下降了=中国经济不好了。对美国老百姓来说，还是10元不变。consumer surplus 不变。被美国赚了C面积=3x数量。
        如果是小国，出口委内瑞，1000件，爱买不买。加关税，减福利
  - - - 资本限制。中国不允许外国资金随便进出。减少国内资产的波动，维持一个稳定的汇率，让国内的利率比较低(限制了资本冲击)，保护一些战略性行业。
      - Some countries impose capital restrictions on the flow of financial capital across borders.
        Commonly cited objectives of capital flow restrictions include the following
        
        Reduce the volatility of domestic asset prices
        
        In times of macroeconomic crisis, capital flows out of the country can drive down asset prices drastically, especially prices of liquid assets such as stocks and bonds
        
        Maintain fixed exchange rates
        
        For countries with fixed exchange rate targets, limiting flows of foreign investment capital makes it easier to meet the exchange rate target and, therefore, to be able to use monetary and fiscal policy to purse only the economic goals for the domestic economy
        
        Keep domestic interest rates low
        
        By restricting the outflow of investment capital, countries can keep their domestic interest rates low and manage the domestic economy with monetary policy, as investors cannot pursue higher rate in foreign countries
        
        Protect strategic industries
    - - BOP is a double-entry bookkeeping system that summarizes a country's economic transactions with the rest of the world for a particular period of time, typically a calendar quarter or year
        
        Every transaction involves both a debit and credit
        
        the sum of all debit entries should equal the sum of all credit entries, and the net balance of all entries on the BOP statement should equal zero
        
        In practice, however, this is rarely the case because the data used to record balance of payments transactions are often derived from different sources
      - Debits
        
        Increase in assets, decrease in liabilities
        
        Value of imported goods and services
        
        Purchases of foreign financial assets
        
        Receipt of payments form foreigners
        
        Increase in debt owed by foreigners
        
        payment of debt owed to foreigners
      - Credits
        
        Decrease in assets, increase in liabilities
        
        Payments for imported goods and services
        
        Payments for foreign financial assets
        
        Value of exported goods and services
        
        Payment of debt by foreigners
        
        Increase in debt owed to foreigners
      - BOP Components
        
        Current account measures the flows of goods and services
        
        Merchandise and services
        
        Merchandies consists of all raw materials and manufactured goods bought, sold, or given away
        
        Services include tourism, transportation, and business and engineering services, as well as fees from patents and copyrights on new technology, software, books, and movies
        
        Income receipts include foreign income from dividend on stockholdings and interest on debt securities
        
        Unilateral transfers are one-way transfers of assets, such as money received from those working abroad and direct foreign aid
        经商账户，做国际贸易。股利，利息。
        单边转移，奖学金，救灾捐款。
        经商账户流入，资本账户流出，相反关系X-M
        
        Capital account consists of capital transfers and the acquisition and disposal of non-produced, non-financial assets
        
        Capital transfers
        
        Debt forgiveness and goods and financial assets that migrants bring when they come to a country or take with them when they leave
        
        The transfer of title to fixed assets and of funds linked to the purchase or sale of fixed assets, gift and inheritance taxes, death duties, and uninsured damage to fixed assets
        
        Sales and purchases of non-financial assets that are not produced assets include rights to natural resources and intangible assets, such as patents, copyrights, trademarks, franchises, and leases
        资本账户，非生产/非金融资产，债务的豁免。自然资源的买卖，无形资产的买卖，专利，商标
        
        Financial account records investment flows
        
        Government-owned assets abroad include gold, foreign currencies, foreign securities, reserve position in the IMF, credits and other long-term assets, direct foreign investment, and claims against foreign banks
        
        Foreign-own assets in the country are divided into foreign official assets and other foreign assets in the domestic country. These assets include domestic government and coporate securities, direct investment in the domestic country, domestic country currency, and domestic liabilities to foreigners reported by domestic banks
        金融账户，主要指的是政府相关。债卷，黄金
      - Different Factors Influence the BOP
        
        S = I + (G-T) + (X-M)
        X-M = (S-I) - (G-T)
        G-T = (S-I) - (X-M)
        
        Relation between the trade deficit, saving, and domestic investment: X-M = private savings + government savings - investment
        
        Lower levels of private saving, larger government deficits, and high rates of domestic investment all tend to result in or decrease a current account deficit
        
        Low private or government savings in relation to private investment in domestic capital requires foreign investment in domestic capital
        
        Borrowing from foreign countries to finance high consumption (low savings) increase the domestic country's liabilities without any increase to its future productive power
        
        Borrowing form foreign countries to finance a high level of private investment in domestic capital, the added liability is accompanied by an increase in future productive power because of the investment in capital
  - - - After the global financial crisis of 2007-2009, the IMF has redefined and deepened its operations by
        
        Enhancing its lending facilities
        
        Improving the monitoring of global, regional and country economies
        
        Helping resolve global economic imbalances
        
        Analyzing capital market developments
        
        Assessing financial sector vulnerablilities
      - IMF
        
        Provides a forum for cooperation on international monetary problems
        
        Facilitates the growth of international trade and promotes employment, economic growth, and poverty reduction
        
        Supports exchange rate stability and an open system of international payments
        
        Lends foreign exchange to member when needed, on a temporary basis and under adequate safeguards, to help them address balance of payments problems
        协调各国货币政策，促进经济，汇率稳定。
    - - WBG's main objective is to help developing countries fight poverty and enhance environmentally sound economic growth. For developing countries to grow and attract business, they have to 目标扶贫
        
        Strengthen their governements and educate their government officals
        
        Implement legal and judicial systems that encourage business
        
        Protect individual and property rights and honor contracts
        
        Develop financial system robust enough to support endeavours ranging from micro credit to financing larger corporate ventures
        
        Combat corruption
        中国早年的时候，世界银行帮助了很多
    - - The only international organization dealing with the global rules of trade between nations
        
        Its main function is to ensure that trade flows as smoothly predictably and freely as possible
        
        Trade friction is channeled into the WTO's dispute settlement process where the focus is on interpreting agreements and commitments, and how to ensure that countries' trade policies conform with them
        
        At the heart of the system -- know as multilateral trading system -- are the WTO's agreements, negotiated and signed by a large majority of the would's trading nations, and ratified in their parliaments
        
        they also bind governments to keep their trade policies within agreed limits to everybody's benefit
        国际贸易政策的协调
    - - Free trade areas (自贸区, 上海自贸区, 河南自贸区)
        
        All barriers import and export of goods and services among member countries are removed
        
        Customs union (关税同盟, 英国与爱尔兰)
        
        All barrieres to import and export of goods and services among member countries are removed
        
        All countries adopt a common set of trade restriction with non-members
        
        Common market (共同市场, 东非共同市场, 南美共同市场)
        
        All barriers import and export of goods and services among member countries are removed
        
        All countries adopt a common set of trade restriction with non-members
        
        All barriers to the movement of labor and capital goods among member countries are removed
      - Economic union (欧盟, 经济共同体, 经济联名, 一带一路)
        
        All barriers import and export of goods and services among member countries are removed
        
        All countries adopt a common set of trade restriction with non-members
        
        All barriers to the movement of labor and capital goods among member countries are removed
        
        Member countries establish common institutions and economic policy for the union
      - Monetary union (货币共同体，欧元区)
        
        All barriers import and export of goods and services among member countries are removed
        
        All countries adopt a common set of trade restriction with non-members
        
        All barriers to the movement of labor and capital goods among member countries are removed
        
        Member countries establish common institutions and economic policy for the union
        
        Member countries adopt a single currency
- - - - Exclude
        
        The sale or resale of goods produce in precious period
        
        Transfer payments made by the government (e.g. unemployment, retirement, and welfare benefits)
        
        In-process goods
        
        The value of labor not sold (e.g. homeowner's repairs to his own home)
        
        By-products of production (e.g. environmental damage)
        
        Underground economy
        
        Barter transaction (e.g. neighbors exchanging services with each other)
        
        illegal trade
        不包含，二手转卖品(包服务,中介)，转移支付(养老金退休金烈士津贴)，中间产品，不交易的(邻居看小孩，地下交易，非法交易)
      - GDP and GNP
        
        GDP measures the market value of all final goods and services produced by factors of production located within a country/economy during a given period of time, generally a year or a quarter.
        
        GNP (Gross National Product) measures the market value of all final goods and services produced by factors of production supplied by residents of a country, regardless of whether such production takes place within the country or outside of the country.
        
        Difference
        
        GDP includes, and GNP excludes, the production of goods and services or income to capital owned by foreigners within that country.
        
        GNP includes, and GDP excludes, the production of goods and services
        or income to capital owned by its citizens outside of the country.
        
        GDP is more closely related to economic activity within a country and so to its employment and growth.
        
        GDP是一个地域概念。GNP是一个国民概念，
        美国人在中国开厂，记的是中国的GDP。地理概念
        中国人在日本开厂，记中国的GNP，国民概念，记日本GDP
        
        更能反映经济活动，GDP，不管谁在中国开了厂，采购，劳动力雇佣，政府纳税，技术的引进。(如果产业空心化，国家还是完蛋)，如果制造工厂全部外迁，在别国生产，训练的是别国公民，本国的制造业水平大幅下降。
      - Nominal & Real GDP
        & Per-Capita Real GDP
        
        Nominal GDP is simply GDP as we have described it under the expenditures approach: the total value of all goods and services produced by an economy, valued at current market prices. For an economy with N different goods and services, we can express nominal GDP as
        Nominal GDPt = NΣi=1 Pi,tQi,t
        = NΣi=1 (price of good i in year t)x(quantity of good i produced in year t)
        今年的价x今年的量=名义GDP
        
        Real GDP is calculated relative to a base year. By using base-year prices and current-year output quantities, real GDP growth reflects only increases in total output , not simply increases (or decreases) in the money value of total output
        Nominal GDPt = NΣi=1 Pi,tQi,t
        = NΣi=1 (price of good i in year t-5)x(quantity of good i produced in year t)
        以前的价x今年的量=实际GDP （没有通货膨胀)
      - GDP Deflator
        
        Implicit price deflator for GDP (GDP deflator) is a price index that can be used to convert nominal GDP into real GDP, taking out the effects of changes in the overall price level
        GDP deflator for year t = (NΣi=1 Pi,tQi,t) / (NΣi=1 Pi,t-5Qi,t) x 100
        = (nominal GDP in year t / value of year t output at year t-5 prices) x 100
        名义GDP/实际GDP= 平减指数(代表通货膨胀)
      - GDP Measurement
        
        The value-of-final-output method (以最终产品的价格计算output)
        
        Expenditure approach-summing the values of all final goods and services produced.
        
        The sum-of-value-added method (以原材料和中间附加值累和计算output)
        
        Summing the additions to value created at each stage of production and distribution. An example of the calculation for a specific product is presented in the following figure.
        
        Value of Final Product Equals Income Created
        -- | Receipts at each stage | Value added(=Income created) At each stage | --
        Receipts of farmer from miller | 0.15 | 0.15 | Value added by farmer
        Receipts of miller from baker | 0.46 | 0.31 | Value added by miller
        Receipts of baker from retailer | 0.78 | 0.32 | Value added by baker
        Receipts of retailer from final customer |1.00 | 0.22 | Value added by retailer
        -- | 1.00 | 1.00 | --
        -- | Value of final output | Total value added = Total income created | --
        左边记最终价，和右边累计增加价值和，是一样的
      - GDP Calculation
        
        GDP can be calculated as the sum of all the spending on newly produced goods and services or as the sum of the income received as a result of producing these goods and services.
        
        Under the expenditure approach, GDP is calculated by summing the amounts spent on goods and services produced during the period. 记最终价新生产
        
        Under the income approach, GDP is calculated by summing the amounts earned by households and companies during the period,附加值累和
        including wage income, interest income, and business profits.
        
        For the whole economy, total expenditures and total income must be equal, so the two approaches should produce the same result.
        
        Using the expenditure approach, the major compoenents of real GDP are consumption, invest meant (including both total fixed investments and changes in inventories), government spending, and net exports (exports minus imports). These components are summarized in the equation
        GDP = C + I + G + (X - M)
        最终商品，四部门，消费者(household 家庭为单位Consumption)，Firm厂商Investment，Government支出/采购，世界rest of world 出口X-M 进口
        
        Income approach
        
        GDP = Gross domestic income (GDI)
        = Net domestic income + Consumption of fixed capital (CFC) + Statistical discrepancy
        ✓ CFC measure of the wear and tear (depreciation of the capital stock that occurs in the production of goods and services,
        
        Gross domestic income (GDT): income received by all factors of production used in the generation of final output.
        
        Gross domestic income
        = Compensation of employees
        +Gross operating surplus
        +Gross mixed income 公司业务的利润没有租金、利息
        +Taxes less subsidies on production
        +Taxes less subsidies on products and imports
        
        收入法GPI，新修改过的。赚到的部分+CFC固定资产的磨损部分(开采煤矿，只有一件工具，铁棍。一年砸下来1.8米，磨损20公分。必须补充20公分，来维持2米。经济里面赚到了部分，还有追加了投资的部分。今年收成，收了800斤小麦，种子扣掉了，为明年种，=磨损的部分补回去，不吃光用光。) +调整项(大部分国家把支出法作为正确数字，然后把收入法调整成和支出一样。以支出为准。加拿大是收入法为准,调整支出)
        
        GDI 包含+员工(税前工资)，+公司=老板(有限责任=公司，个人独资企业，合伙制企业=非公司，承担无限责任。税利租前)。+政府间接税-补贴(政府往外掏钱孤寡老人失业补贴)
        往年，+利息+租金。今年没了，算老板里。
        直接税:直接扣税,对人收入所得税, 遗产税, 物业税, 对收入和资产克扣税。间接税对东西，对消费增值税进口税，本身商品自己不会交税。
        
        Personal income
        
        A broad measure of household income and measures the ability of consumers to make purchases
        
        One of the key determinants of consumption spending
        
        Household disposable income (HDI) = personal income - personal taxes
        
        Household net saving = HDI
        -household final consumption expenditures
        +net change in pension entitlements
        度量整个家庭的收入。disposable可支配=税后收入
        HDI - 支出 + 养老金的变化 (每个月赚1万，支出8k，700养老金)。
      - Components of GDP
        
        To derive the aggregate demand curve, we need to understand the factors that determine each of the components of GDP:
        
        Consumption: function of disposable income.
        
        PI⬆️ or taxes⬇️ -> both consumption and saving⬆️
        
        Marginal propensity to consume (MPC): the proportion of additional income spent on consumption
        
        MPC + MPS = 1
        
        Investment: a function of expected profitability and the cost of financing 投资收益
        
        Expected profitability depends on the overall level of economic output 取决于整体经济水平
        
        Financing costs are reflected in real interest rates.
        
        Government purchases: be viewed as independent of economic activity 取决于利率
        
        Net exports are a function of domestic disposable incomes (which affect imports), foreign disposable incomes (which affect exports)
        
        PI personal income个人收入上升，或者税下降 ->消费，储蓄增加。
        
        边际消费倾向+边际储蓄倾向 =1，要么消费，要么储蓄(广义，买股票也算。没了就算别人的钱，从整个社会来说，没变化)
        
        C+I+G+X-M，I投资跟企业有关，预计利润率上升，大家更愿意投资。融资成本越高，大家越不愿意融资
        
        政府采购一般被认为跟经济活动不相干。甚至反周期，因为调节活动。经济过热，政府减少采购。经济过差，政府来采购，刺激经济。
        
        X-M 如果本国经济好，进口M增加(人都喜欢异域商品，有钱了，铺一条波斯地毯，法国红酒)。如果外国经济好出口X增加。
      - Gross domestic product (GDP) is the total market value of the final goods and services produced in a country within a certain time period. • Include
        
        Purchases of newly produced goods and services
        
        Final goods and services
        
        Goods and services provided by government at cost to government (e.g, the services provided by police and the judiciary, and goods such as roads and infrastructure improvements)
        
        The value of owner-occupied housing, just as including the value of rental housing service.
        市场价格，最终商品(中间不记)，地理，时间流量概念(非积累和)
        包含新生产商品(包含二手房服务，不包二手房交易)
        包含政府服务，包含自住房(折算市场租金计入GDP
  - - - Total expenditures can be stated as
        GDP = C + I + G + (X - M) 1️⃣
        
        Total income, which must equal total expenditures, can be stated as GDP = C + S + T 2️⃣, where:
        C = consumption spending
        S = household and business savings
        T = net taxes (taxes paid minus transfer payments received)
        
        1️⃣ = 2️⃣ -> S = I + (G-T) + (X-M)
        (G-T) = Fiscal balance
        (X-M) = Trade balance
        如果S上升，I不变，必须被G-T财政赤字增加，和net export增加所抵消。Saving多了，或被政府花了，或流出国外(经常账户流入，资本账户流出)
        Also we can get: (G-T) = (S-I) - (X-M)
        
        A government deficit (G-T >0) must be financed by some combination of a trade deficit (X-M <0) or an excess of private saving over private investment (S-I >0)
        政府财政赤字来说: net saving: X-M <0 经常账户赤字，资本账户流入
    - - If income and expenditure are to remain in equilibrium, there must be an inverse relationship between the real interest rate and income
        
        In economics, this relationship is called the IS curve, because investment I and savings S are the primary variables that adjust to maintain the balance between expenditure and income
        
        商品市场的均衡I=S 有储蓄，就能花钱力，Y=GDP
        
        S = I + (G-T) + (X-M)，假设(G-T),(X-M)不变的常数，那么S=I是一一对应的线性关系。Investment ~ Saving
        
        C -> Y-T, T与Y相关，C与T相关 => C与Y相关
        I -> Y, r相关；G -> 常数，政府有预算，提前制定的
        X-M -> Y相关，中国经济好，进口增加。外国好，出口增加
        所以其他都知道，要研究Y于r的关系
        
        研究r，利率上升，投资下降，GDP下降。相反关系。
        r利率是资金的价格，价格是自变量，但传统把P记在Y轴。
        
        r利率自变量变，引起GDP变，叫滑动movement along
        
        如果不变的东西，IS变动 ->引起曲线shift
      - 描述商品市场均衡，即I=S时，总收入与利率的关系
        Y = C + I + G + X-M
        
        r上- > I下 -> Y下；即r上 -> Y下
        
        利率改变 movement along
        
        进出口与财政政策引起IS曲线的shift
        
        政府支出G增加或者X增加，扩张，向右
        
        税收T增加或者M增加，紧缩，向左
    - - In equilibrium, there is a positive relationship between real income and the real interest rate for a given level of the real money supply
        Liquidity ~ Money 流动性~货币，体现货币市场均衡
        货币供给=货币需求，达到均衡。
        
        Real Money Supply Ms/P 实际货币供给与物价关系相反，物价越高，实际货币供给越少。同样国家供应一亿货币量，一杯水¥1，和一杯水¥10，货币供应量不一样。Ms/P=L1+L2
        L1=交易需求+预防性需求 L2=投机需求，相等=均衡。
        
        Y GDP上升，L1需求上升。在一定时间内，Ms钱供给，P 物价是常数不变，L2就下降了，也就意味着r 利率上升。
        
        自变量r引起应变量Y改变，movement along
        
        原假设不变的变，shift 原Ms/P不变，如果货币供给上升/物价下降 ->增加了real Ms，扩张，GDP变得更高，往右。如果供给减少/物价上升，减少实际货币供应，紧缩，向左。
      - 货币市场要均衡：Ms=Md, Ms/P=L1+L2
        
        Y上 -> L1上 -> L2下 -> r上
        
        利率改变 movement along
        
        货币政策和物价水平改变shift: 扩张或者物价下降，增加Ms/P，向右：紧缩或者物价上升减少Ms/P，向左
      - By examining the relationships between supply and demand in the financial markets, we can derive the LM curve. The LM curve shows the combinations of GDP or real income (Y) and real interest rate (r) that keep the quantity of real money demanded equal to the quantity of real money supplied.
        
        Demand for money is inversely related to the real interest rate. The higher the real interest rate, the less willing people are to hold cash balances, which do not earn interest; they prefer to hold more interest-bearing securities and less cash.
        
        While demand for money decreases when real interest rates increase demand for money increases when real income increases.
        
        If we hold the real money supply (M/P) constant, the increase in demand for real money from an increase in real income must be offset by a decrease in demand for money from an increase in the real interest rate to keep the equation in balance.
    - - The Demand for money is largely determined by interest rates and it is also influenced by income level and price level.
        Three reasons for holding money:
        
        Transaction demand: Money held to meet the need for undertaking transactions. As the level of real GDP increases the size and number of transactions will increase, and the demand for money to carry out transactions increases
        
        Precautionary demand: Money held for unforeseen future needs. In the aggregate, the total amount of precautionary demand for money increases with the size of the economy
        
        Speculative demand: Money that is available to take advantage of investment opportunities that arise in the future. It is inversely related to returns available in the market.
      - 货币需求有三种
        
        交易性需求，交易动机。比如说，一家企业一定要持有现金，才能去买原料，给员工发工资，去交税。就像个人生活一样，要上课得带钱，地铁打车交通，吃喝。
        
        谨慎动机，预防性动机。带超过消费的现金，预防性需求。应对万一情况发生的事情。
        都跟GDP相关，比如说20年前，出来上课那个时候吃顿饭需要8块钱，交通两块钱，喝水1.5. 经济越落后，整个的花费越少。和GDP同向关系，经济越发达，交易性&预防性需求越大。
        
        投机性需求，手里拿着一些现金，准备去投机。如果现在银行给利息，推极端一年赚30%，一定所有钱放银行里去。=r利率越高，投机性需求越低，相反关系。如果零利率，负利率，投机性需求高，钱放进去不值得。
    - - Deriving the aggregate demand curve
        IS与LM交点表示均衡利率和均衡产出，价格上升，真实货币供应减少，利率上升，真实收入下降：价格上升，降低资产真实价格，降低个人消费：价格上升，国内商品价格上升，相对于进口商品变得更贵。通货膨胀
      - Shifts in the ADC
        
        Shifts in the aggregate demand curve
        
        The aggregate demand (AD) curve reflects the total level of expenditures in an economy by consumers, businesses, governments, and foreigners. A number of factors can affect this level of expenditures and cause the AD curve to shift.
        
        Note that a change in the price level is represented as a movement along the AD curve, not a shift in the AD curve. See the following figure, an increase in aggregate demand is shown by a shift to the right, indicating that the quantity of goods and services demanded is greater at any given price level. 自变量，价格水平变，引起GDP，叫movement along
        
        GDP =C+I+G + NX. For changes in each of the following factors that increase aggregate demand (shift AD to the right), we identify which component of expenditures is increased.
        
        Increase in consumers' wealth: As the value of households' wealth increases (real estate, stocks, and other financial securities), the proportion of income saved decreases and spending increases, increasing aggregate demand (C increases). 个人财富增长，往右，更愿意消费->GDP涨
        
        Business expectations: When businesses are more optimistic about future sales, they tend to increase their investment in plant, equipment, and inventory, which increases aggregate demand (I increases). 商业预期提升，大家相信投资会大赚钱。I增加 GDP右移
        
        Consumer expectations of future income: When consumers expect higher future incomes, due to a belief in greater job stability or expectations of rising wage income, they save less for the future and increase spending now, increasing aggregate demand (C increases) 消费者对未来的信心。最相关，影响最大。预期可支配收入.
        
        High capacity utilization: When companies produce at a high percentage of their capacity, they tend to invest in more plant and equipment increasing aggregate demand (I increases). 高功率，生意好。
        
        Expansionary policy
        
        Expansionary monetary policy: When the rate of growth of the money supply is increased, banks have more funds to lend, which puts downward pressure on interest rates. Lower interest rates increase both investment and consumers' spending. Thus, the effect of expansionary monetary policy is to increase aggregate demand (C and I increase).
        
        Note that if the economy is operating at potential GDP (LRAS) when the monetary expansion takes place, the increase in real output will be only for the short run.
        
        In the long run, subsequent increases in input prices decrease SRAS and return output to potential GDP.
        扩张货币政策，增加消费C，投资I
        
        Expansionary fiscal policy: Expansionary fiscal policy refers to a decreasing government budget surplus (or an increasing budget deficit) from decreasing taxes, increasing government expenditures, or both.
        
        A decrease in taxes increases disposable income and consumption, while an increase in government spending increases aggregate demand directly (C increases for tax cut, G increases for spending increase). 扩张财政政策，政府支出G增加。政府出台个人/企业减税措施，消费C增加。
        
        Exchange rates 汇率改变
        
        A decrease in the relative value of a country's currency will increase exports and decrease imports. 本国货币贬值，有利出口X。进口更贵了，进口M减少
        
        Both of these effects tend to increase domestic aggregate demand (net X increases).
        
        Global economic growth
        
        GDP growth in foreign economies tends to increase the quantity of imports (domestic exports) foreigners demand.
        
        By increasing domestic export demand, this will increase aggregate demand (net X increases).
        
        Note that for each factor, a change in the opposite direction will tend to decrease aggregate demand.
        中国的经济好，增加进口。全球经济好，增加中国的出口。经济一好，人就喜欢异域商品，外国货。
        
        Impact of Factors Shifting Aggregate Demand
        An Increase in the Following Factors: | Shifts the AD Curve: | Reasons:
        
        Stock prices | Rightwards: Increase in AD | Higher consumption
        
        House prices | Rightwards: Increase in AD | Higher consumption
        
        Consumer confidence | Rightwards: Increase in AD | Higher consumption
        
        Business confidence | Rightwards: Increase in AD | Higher investment
        
        Capacity utilization | Rightwards: Increase in AD | Higher investment
        
        Government spending | Rightwards: Increase in AD | Government spending a component of AD
        
        Taxes | leftwards: Decrease in AD | Lower consumption and investment
        
        Bank reserves | Rightwards: Increase in AD | Lower interest rate, higher investment, possibly higher consumption
        
        Exchange rate (foreign currency per unit domestic currency) | Leftwards: Decrease in AD | Lower exports and higher imports
        
        Global growth | Leftwards: Decrease in AD | Higher exports
        
        Y=C+I+G+(X-M)
        股价增，个人财富增长，增加消费C。房子涨，增加消费(房价增长到一定程度，对消费形成抑制作用，大家都去贷款买房，杠杠价太猛，利息负担太重，侵蚀了消费力)。消费者信心，商业信心，开工率增加，政府开支增加。
        税增加，减少投资。银行储备，银行自身多余的钱，不是交给央行的保证金，愿意低利率发放贷款，利率下降，资金变得更便宜，投资/消费增加。本币升值，不利出口X下，利进口M上。全球经济增长，X上升，外国人经济好，更想买中国人的商品。
      - IS I(r) = S(Y) 相关
        LM Ms/P = L1(Y) + L2(r)
      - 宏观经济，不能说东西贵了需求就下降，这是微观。宏观经济研究的是GDP。GDP研究的是Y=C+I+G+X-M，围绕这个来说。总需求，因为物价水平上升，实际货币供应的减少，所以利率上升，大家更不愿意投资 I下降。因为东西贵了，我的财富就少了 C下降。因为东西贵了，出口更困难了 X下降。因为国内东西贵了，大家更愿意买进口 M增加。导致GDP下降的。
      - 考试，什么是AD线，就是IS和LM的交点。交点代表意思就是商品市场和货币市场的同时均衡。坐标轴画的是，价格水平(y轴)和GDP Y(x轴)。画的相反关系。不太会问为什么，因为考选择，非问答题。
        IS商品市场均衡，LM货币市场均衡。
        如果P价格上升 -> Ms/P钱供给减少 -> r上升 -> I下降
        P上升 -> wealth 财富减少 -> Consumption下降
        P上升 -> X出口减少 M进口上升
        => P上升 -> Y, GDP减少 (如左斜线图)
    - - The aggregate supply (AS) curve describes the relationship between the price level and the quantity of real GDP supplied, when all other factors are kept constant. That is, it represents the amount of output that firms will produce at different price levels
        
        We need to consider three aggregate supply curves with different time frames: the very short-run aggregate supply (VSRAS) curve, the shortrun aggregate supply (SRAS) curve, and the long-run aggregate supply (LRAS) curve
        
        The VSRAS curve is perfectly elastic.
        
        The LRAS curve is perfectly inelastic. In the long run, wages and other input prices change proportionally to the price level, so the price level has no long-run effect on aggregate supply. We refer to this level of output as potential GDP or full-employment GDP.
        
        The SRAS curve is upward sloping.
        
        分三个时间维度，Very short run 非常短，一三六个月，产出的量和价格之间关系不影响，补习班，不管来多少人，都是一个价格。水平线。短瞬即逝，不研究。
        
        Long run 非常长期。比如说，家庭是专门生产面包，如果现在市场中一个面包一万块，存在生产极限。国家在一定技术劳动力使出吃奶劲也就出产这一点。垂直线
        
        short run 价格跟产量同向关系。如果猪肉增价，加工资不会因为物价上升。P上，名义工资不变=real工资下降，成本下降->老板愿意扩大再生产。
      - VSRAS: 都是固定的，产出量不影响价格
        LRAS: input价格按比例影响产品价格，价格水平不影响总供给
        SRAS: 工资粘性
        P上, 名义工资不变 -> real wage下 -> cost下 -> 扩大生产多雇佣 -> 就业水平上 -> Y上P下，名义工资不变 -> real wage上 -> cost上 -> 减少生产少雇佣 -> 就业水平下 -> Y下
      - Shifts in the SR ASC
        
        Impact of Factors Shifting Aggregate Supply
        An Increase in | Shifts SRAS | Shifts LRAS | Reason
        
        Supply of labor | Rightward | Rightward | Increases resource base
        
        Supply of natural resources | Rightward | Rightward | Increases resource base
        
        Supply of human capital | Rightward | Rightward | Increases resource base
        
        Supply of physical capital | Rightward | Rightward | Increases resource base
        
        Productivity and technology | Rightward | Rightward | Increases efficiency of inputs
        
        Nominal wages | Leftward | No impact | Increases labor cost
        
        Imput prices (eg energy) | Leftward | No impact | Increases cost of production
        
        Expectation of future prices | Rightward | No impact | Anticipation of higher costs and/or perception of improved pricing power
        
        Business taxes | Leftward | No impact | Increases cost of production
        
        Subsidy | Rightward | No impact | Lowers cost of production
        
        Exchange rate 影响进口原料成本 | Rightward | No impact | Lowers cost of production
        
        影响长期的，必然影响短期。影响短期的，未必影响长期。低端劳动力Labor，高端劳动力human capital = 劳动力。natural resource+机器physical capital =资本。technology=科技。
        下面只影响短期。左移工资，能源费电费，税 vs 补贴，汇率进口原料成本，预期未来价格涨右移。
      - 4 Decrease in Input Prices
        
        原材料能源价格下降--供给增加
        
        Higher GDP, lower price
      - Sources of Economic Growth
        
        Factors influencing economic growth
        
        Physical capital stock: a high rate of investment increases a country's stock of physical capital. A larger capital stock increases labor productivity and potential GDP. An increased rate of investment in physical capital can increase economic growth.
        
        Technology: improvements in technology increase productivity and potential GDP. More rapid improvements in technology lead to greater rates of economic growth.
        
        Natural resources: raw material inputs, such as oil and land, are necessary to produce economic output. These resources may be renewable (eg, forests) or nonrenewable (e.g., coal). Countries with large amounts of productive natural resources can achieve greater rates of economic growth.
        广义的资本+科技
        
        A production function describes the relationship between output and labor, the capital stock, and productivity.
        
        Economic output can be thought of as a function of the amounts of labor and capital that are available and their productivity, which depends on the level of technology available. That is:
        Y = A x f(L,K) (Y = TK^α L^(1-α)) where:
        Cobb-Douglas production function
        Y = aggregate economic output;
        L = size of labor force;
        K = amount of capital available;
        A = total factor productivity 全要素生产效率
        
        Total factor productivity is a multiplier that quantifies the amount of output growth that cannot be explained by the increases in labor and capital.
        
        It exhibits constant returns to scale: increasing all inputs by a fixed percentage leads to the same percentage increase in output.
        由什么决定了经济的增长，科普道格拉斯函数，20世纪30年代，数学家Cobb和经济学家Douglas 共同提出来的。三个因素，T科技technology，L劳动力Labor，K资本capotal。
        
        Factors influencing economic growth
        
        Labor supply低端劳力: the labor force is the number of people over the age of 16 who are either working or available for work but currently unemployed.
        
        It is affected by population growth, net immigration, and the labor force participation rate. Growth of the labor force is an important source of economic growth
        
        Human capital高端劳力: the education and skill level of a country's labor force can be just as important a determinant of economic output as the size of the labor force.
        
        Because workers who are skilled and well-educated (possess more human capital) are more productive and better able to take advantage of advances in technology, investment in human capital leads to greater economic growth
        
        Y = TK^α x L^(1-α)
        LnY = LnT + αLnK + (1-α)LnL
        ∆Y/Y= ∆T/T+α∆K/K +(1-α)∆L/L
        α资本的分配比率，1-α劳动者分配者比率
        
        Growth of Total Factor Productivity
        
        A well-known model of the contributions of technology, labor, and capital to economic growth is
        
        growth in potential GDP = growth in technology + W (growth in labor) + Wc (growth in capital)
        求导 ∆Y/Y= ∆T/T+(1-α)∆L/L +α∆K/K
        
        where W. and We are labor's percentage share of national income and capital's percentage share of national income.
        
        Growth in total factor productivity is driven by improvements in technology. Sometimes, the relationship between potential GDP, technology improvements, and capital growth is written on a per-capita basis as
        
        growth in per-capita potential GDP= growth in technology + WC (growth in the capital-to-labor ratio)
        Y = TK^α x L^(1-α)
        Y/L = TK^α x L^(1-α-1)
        = TK^α L^(-α) = T(K/L)^α
        LnY/L = LnT + αLn(K/L)
        求导人均GDP (∆Y/L)/(Y/L) = ∆T/T + α[∆(K/L)]/(K/L)人均资本
        
        Assuming the number of workers and a remain constant, increases in output can be gained by increasing capital per worker (capital deepening) or by improving technology (increasing TFP).
        
        Labor productivity data can be used to estimate the rate of sustainable growth of the economy. A useful way to describe potential GDP is as a combination of aggregate hours worked and the productivity of those workers
        
        Potential GDP = Aggregate hours worked X Labor productivity
        
        Transforming the above equation into growth rate, we can get the following
        
        Potential growth rate = Long-term growth rate of labor force + Long-term labor productivity growth rate
        增长率 = 长期的劳动力增长 + 劳动效率增长(人均GDP)
        Y = Y; Y = Y/L x L; LnY = LnL + Ln Y/L
        ∆Y/Y = ∆L/L + (∆Y/L)/(Y/L)
        现在老龄化，劳动力增长负数，科技没有边际效益递减，科教兴国
- - - - Perfect Competition
        完全竞争
        
        The assumption of perfect competition 大白菜
        
        There are a large number of potential buyers and sellers 无穷多买家卖家
        
        The products offered by the sellers are virtually identical 卖的东西几乎一摸一样
        
        There are few or easily surmountable barriers to entry and exit 几乎无壁垒
        
        Sellers have no market-pricing power 没有定价权
        
        Non-price competition is absent 非价格竞争没有
        
        A price taker is a firm that cannot influence the market price and that sets its own price at the market price. 接受价格
        
        Individual firm's demand schedule is perfectly elastic (horizontal, Price = Demand = Marginal Revenue = Average revenue). 完全弹性，水平线
        
        单个公司来说，demand是水平线。整个行业来说，仍然是X型需求供给。对市场来说，demand负斜率，便宜需求越高。
        
        利润最大化
        
        短期
        
        Perfectly competition firm's short-run equilibrium
        
        Profit max: MR=MC ->确定Q
        
        MR=P=AR=D (price tacker)
        短期来看 MC > ATC 有超额收益（阴影部分）
        
        长期
        
        Perfectly competition firm's long-run equilibrium
        
        The long-run equilibrium output level for perfectly competitive firms is where MR=MC ATC, which is where ATC is at a minimum. At this output, economic profit is zero and only a normal return is realized.
        
        In equilibrium, each firm is producing the quantity for which P=MR=MC=ATC, so that no firm earns economic profits.
        长期超额利润，被大家都种大白菜，消失
      - Monopolistic Competition
        垄断竞争
        
        The following market and product features define monopolistic competition:
        
        There are a large number of independent sellers
        
        Each firm has relative small market share;
        
        Each seller produces a differentiated product
        
        The most distinctive factor in monopolistic competition is product differentiation
        
        Firms compete on product quality price and marketing:
        
        Firms are free to enter and exit;
        
        Firms in monopolistic competition face downward-sloping demand curves and the curves are highly elastic because competing products are perceived by consumers as close substitutes.
        有好几家商家，每一家有小的市场份额。洗发水，特点差异化产品，去屑，止痒，不含硅。差异化，就会有质量，价格，营销（扩占市场）上的竞争。日用品进入退出算容易。偏水平的负斜率
        
        Product development and marketing
        
        Innovation and product development
        
        Less-elastic demand curve, earn economic profit;
        
        Close substitutes and imitations will eventually erode the initial economic profit;
        
        Continually look for innovative product features.
        
        Brand names
        
        Provide information to consumer by providing them with signals about the quality of the branded product.
        
        Advertising
        
        High for firms in monopolistic competition
        
        Inform consumers about the unique features of the product
        
        Advertising costs are greater, and increase the ATC curve
        
        Output increase
        
        If advertising leads to enough of an increase in output(sales), it can actually decrease a firm's average total cost
        垄断竞争关键点在差异化。通过创新，产品开发，广告。
        
        利润最大化
        
        短期
        
        Short-run equilibrium in monopolistic competition
        
        In the short-run, the profit-maximizing choice is the level of output where MR=MC
        
        Because the product is somewhat different from that of the competitors, the firm can charge the price determined by the demand curve
        垄断竞争差异化，符号LV。竞争激烈，短期超额收益
        MR=MC 价格 < demand curve价格 > ATC
        
        长期
        
        Long-run equilibrium in monopolistic competition
        
        In the long-run for the monopolistic competitive firm, economic profit will fall to zero
        
        output is till optimal at the level where MR=MC
        长期超额收益为零，ATC高到=MR
        有超额收益就会有人进入抢分。超额亏损别人就退出，自己就不会亏损太多钱，赚到应有的利润。
      - Oligopoly 寡头
        
        Oligopoly is a form of market competition characterized by:
        
        A small number of sellers
        
        Interdependence among competitors
        
        Large economies of scale
        
        Significant barriers to entry
        
        Either similar or differentiated products
        
        Compared to monopolistic competition, an oligopoly market has higher barriers to entry, fewer firms, and, typically, less elastic firm demand curves.
        
        In contrast to a monopolist, oligopolies are highly dependent upon the actions of their rivals when making business decisions.
        
        Four models of oligopoly
        
        Kinked demand curve model
        
        Cournot duopoly model
        
        Nash equilibrium model (prisoner's dilemma)
        
        Stackelberg dominant firm model
        例子有汽油，钢铁，汽车，电信。关键词互动，互相依靠。
        有规模经济，进出很难，可类似可差异
        寡头互动四模型
        
        互动四模型
        
        kinked demand
        
        The kinked demand curve model of oligopoly is based on the assumption that each firm believes that if it raises its price, others will not follow but if it cuts its price, other firms will cut theirs.
        
        Between range A and B, the optimum Q is constant can't determine price.
        
        Qx is the profit-maximizing level of output and the price at which the kink is located is the firm's profit maximizing price.
        
        Shortcoming: it is incomplete because what determines the market price (where the kink is located) is outside the scope of the model.
        
        拐折需求。寡头市场，你涨价，别人不跟着你涨价，P上Q降地多=弹性大，线平坦。P降价，大家都跟随，Q上不多 = 没有弹性，陡峭。
        
        MR与MC没有交点 -> 没办法决定市场价格，利润最大化。
        
        Cournot不考
        
        Only two firms competing (e.g. A duopoly).假设两个寡头
        
        Both have identical and constant marginal costs of production 假设MC是一样的+保持不变
        
        Each firm knows the quantity supplied by the other firm in the previous period and assumes that is what it will supply in the next period.
        
        Firms determine their quantities simultaneously each period and, under the assumptions of the Cournot model, these quantities will change each period until they are equal.
        
        When each firm selects the same quantity, there is no longer any additional profit to be gained by changing quantity, and we have a stable equilibrium. 假设产量是一样的
        
        假设例子
        
        Cournot model could be explained as the following
        
        Aggregate market demand: Q=450-P, Q=q1+q2
        
        The supply function is represented by constant marginal cost MC=30.
        
        Rearranging the aggregate demand function in terms of price, we get:
        P=450-Q=450-q1-q2, and MC=30
        
        Total revenue for each of the two firms
        
        TR1 =Pq1=(450-q1-q2)*q1 = 450q1 - q1^2 -q1q2
        
        TR2 =Pq2=(450-q1-q2)*q2 = 450q2 - q2^2-q1q2
        
        MR,=-∆TR1/∆q1 = 450-2q1-q2
        
        MR = ∆TR2/∆q2 = 450-2q2-q1
        
        For the profit-maximizing output, set MR=MC, or
        450-2q1-q2=30 and 450-2q2-q1=30
        
        Because q1=q2 under Cournot's assumption, insert this solution into the demand function and solves as
        450-q1-q1 = 450-3q1 = 30
        
        Therefore, q1 = 140, q2 = 140, and Q=280
        
        The price is P = 450 - 280 = 170
        
        Nash equilibrium
        
        Nash equilibrium is reached when the choices of all firms are such that there is no other choice that makes any firm better off (increases profits or decrease loss)
        
        Prisoners' Dilemma is a game that illustrates that the best course of action for an oligopoly firm, when engaging in collusion with another oligopoly firm, is to cheat
        Prisoner B is silent | Prisoner B confesses
        Prisoner A is silent | A gets 6 months B gets 6 months |
        A gets 10 years B goes free
        Prisoner A confesses | A goes free B gets 10 years | A gets 2 years B gets 2 years 囚徒困境，招供对己最优选
        
        Best overall outcome is for both to remain
        silent and get sentences of six months. But it is not equilibrium.
        
        The Nash equilibrium is for both prisoners to confess, and for each to get a sentence of two years.
        
        Confess/confess is the Nash equilibrium since neither prisoner can unilaterally reduce his sentence by changing to silence.
        
        The duopoly result from the Nash equilibrium. Assume there are two firms in the market, ArcCo and BatCo. ArcCo and BatCo can charge high prices or low prices for the product.
        BatCo low price | BatCo high price
        ArcCo low price | ArcCo 50 BatCo 70 | ArcCo 80 BatCo 0
        ArcCo high price | ArcCo 300 BatCo 350 |ArcCo 500 BatCo 300
        A高价策略>低价策略；B低价策略>高价策略
        
        Collusion 串谋
        
        Collusion is when firms make an agreement among themselves to avoid various competitive practices, particularly price competition. 寡头都想串谋，竞争太激烈，亏了自己
        
        If the two parties comply with the collusion the market is just like a monopoly firm, which will make less outputs and higher price.
        
        Collusive agreements to increase price in an oligopoly market will be more successful (have less cheating) when
        
        There are fewer firms;
        
        Products are more similar (less differentiated)
        
        Cost structures are more similar;
        
        Purchases are relatively small and frequent;
        
        Retaliation by other firms for cheating is more certain and more severe;
        
        There is less actual or potential competition from firms outside the cartel
        成功元素，家数少，产品越类似(竞争越激烈)，成本结构类似。买量越少越频繁，(不规律难谈)，惩罚严重，外界竞争小
        
        Dominant firm model
        
        Dominant firm model
        
        A single firm has a significantly large market share
        
        Greater scale;
        
        Lower cost structure.
        
        Market price is essentially
        determined by the dominant firm
        
        The other competitive firms take this market price as given
        
        If the other companies in the market attempts to gain market share by undercutting the price set by the dominant firm, the market share of the dominant firm will increase.
        
        Over time, the dominant company's market share tends to decrease as profit attract entry by other companies.
        
        主导厂商理论，寡头市场有一家特别大=有主导权，
        以自己的 MR=MC->Q->P，其他厂家跟着这P
        
        小公司打起来降价，小公司斗死退出市场，大厂获得更多市场。
        
        长期来看，主导厂商市场下降，因为超额利润会吸引其他人进入市场
      - Monopoly 垄断
        
        A monopoly is characterized by
        
        A single seller of a well-defined product for which there are no good substitutes
        
        High barriers to the entry of other firms into the market for the product
        Types of barriers
        
        Legal barriers to entry create legal monopoly. A legal monopoly is a market in which competition and entry are restricted by the granting of a public franchise, government license, patent or copyright
        
        Example: radio and television station
        
        Natural barriers to entry create natural monopoly, which is an industry in which one firm can supply the entire market at a lower price than two or more firms can (Economies of scale)
        
        Example: electric utility
        垄断只有一家。高壁垒，政府许可证，电台/广播台。自然垄断，水电公共服务。
        
        A monopolist faces a downward sloping demand curve. Just as price searchers with low entry barriers will expand output until MR=MC, so do monopolists. This will maximize profit. Positive economic profits can exist in the long run due to the high entry barriers. 向下斜率，寡头高负斜率。长期有超额利润，因为垄断
        
        The monopolists want to maximize profits, not price. So they will not charge the highest possible price.
        
        Compared to a perfect competitive industry the monopoly firm will produce less total output and charge a higher price.
        
        例子
        
        Monopolist's demand and marginal revenue
        
        Suppose a company operating on a remote island is single seller of natural gas
        Qd = 400-0.5P -> P = 800-2Qd (D线)
        TR = PxQ = 800Qd-2Qd^2 -> MR = 800Qd-4Qd （MR线)
        AR = TR/Qd = 800-2QQd
        
        demand, marginal revenue,
        cost structure
        
        To maximize profit, monopolists will expand output until marginal revenue (MR) equals marginal cost(MC), MR=MC
        
        The relationship between MR and price elasticity, Ep is MR=P(1-1/Ep)
        
        Economic profit = (P* -ATC*) x Q*
        
        Price Discrimination
        每个人不同价
        
        Price discrimination is the practice of charging different consumers different prices for the same product or service.
        
        First-degree price discrimination, where a monopolist is able to
        charge each customer the highest price the customer is willing to pay.
        
        In second-degree price discrimination, the monopolist offers a menu of quantity-based pricing options designed to induce customers to self-select based on how highly they value the product.
        
        Producers can use not just quantity but also the quality to charge more to customers that value the product highly.
        
        Third-degree price discrimination happens when customers are segregated by demographic or other traits.
        
        Government Regulation
        水电行业
        
        Average cost pricing is the more common form of regulation at the point where ATC=D. This will
        
        Increase output and decrease price.
        
        Ensure the monopolist a normal profit (but no economic profit) since price=ATC, 价格=平均成本 TR=TC 正常利润
        
        Marginal cost pricing which is also referred to as efficient regulation, forces the monopolist to reduce price to the point where MC=D. this will
        
        Increase output and reduce price.
        
        Causes the monopolist to incur a loss since price is below ATC. 以MC来定价，低于ATC，导致亏损
        
        Such a solution requires a government subsidy in order to provide the firm with a normal profit. 需要政府补贴生存
        
        Concentration Measures
        市场集中度指标
        
        The N-Firm Concentration Ratio: the sum or the percentage market shares of the largest N firms in a market.
        
        Advantage: simple to compute
        
        Disadvantage: does not directly quantify market power
        
        Limitation: it may be relatively insensitive to mergers of two firms with large market shares.
        
        The Herfindahl-Hirschman Index (HHI): the sum of the squares of the market shares of the largest firms in the market.
        
        Limitation: both of our simple concentration measures is that barriers to entry are not considered in either case. Even a firm with high market share may not have much pricing power if barriers to entry are low and there is potential competition.
        
        四种市场，一个比一个集中。N-firm集中度，中石油中石化≈95% 集中度高，培训行业前100家≈15%集中度很低。一种说法，4-firm集中度>60%叫寡头，不敏感收购兼并。HH指数严谨，所有市场份额的平方数相加，(a+b)^2=a^2+2ab+b^2; 比如一50% 二30% 合并，多出来2ab=2x50x30=3000，在100%^2= 10000一万的总比例里，占大影响=敏感。共同缺点，算历史数字。
- - - - AD0 ->AD1，在交点2. 价格更低，GDP更低 => recession 衰退。两法，政府积极干预凯恩斯主义，把AD1推回到AD0，拉动利息宽松政策，减税，政府项目4万亿。2法让经济自动平衡，经济衰退 = 原料没人买了，工人失业了 -> 原料工资成本更低了。就有资本家发现，招工人，买原料，再生产合算了 -> AS上升 = SRAS0 -> SRAS1 到交点3，恢复了均衡。
        总需求AD下降的话，可以政府干预，扩大内需，刺激经济。或等经济自动平衡，新的资本家进场，总供给AS增加，回到均衡点3.
    - - AD0 -> AD1 P价格更贵了，GDP更高了。P带来通胀问题。两法，政府干预，AD总需求太大，采取紧缩措施，AD1退回AD0。2法自动平衡，东西更贵了，原料更贵了，劳动力太贵，资本家就削减生产，导致总供给减少，SRAS0 -> SRAS1，回到均衡点3.
    - - 比如说原料的能源价格上升了。原料太贵了，不愿意供应了。SRAS0 -> SRAS1 均衡点1到2点的不均衡。东西更贵了，GDP更低了。最糟糕的情况，考试喜欢考stagflation，导致经济衰退/停滞同时通货膨胀发生～滞胀。总供给下降，很难干预。宽松政策会导致通货膨胀更严重。紧缩政策，将会导致经济更衰退。两难，通货膨胀+经济双重问题。不去解决，会有政治压力(老百姓觉得，怎么不做一些事情?)。可以自动平衡，时间久了，大家不买原料了，原料价格会下降=AS线，自动回来下降。
      - Stagnflation - Adjustment to decrease in AS
        Combination of declining economic output and higher prices.
        
        Stagflation is generally associated with a sharp decrease in aggregate supply.
        
        Stagflation is difficult for government policymakers to address because policy changes to reduce inflation tend to make unemployment worse, while policy changes to fight recession tend to make inflation worse.
        
        If the government does not intervene, declines in wages and other input prices should return SRAS and real GDP to long-run equilibrium. However, this may be a slow process that makes it politically risky for the government to take no immediate
    - - 原料能源价格下降，总供给上升。SRAS0 -> SRAS1 价格更低，GPS更高。好事，不需要干预。工业革命之前，人类都在艰难求生。二战45年结束之后，人类意识大觉醒，人权，科技，民生的提升。中国是改革开放之后78年。晚了30年，收益于整体世界经济。科技发展，原料能源下降，大米下降，电大幅下降。原来用木头，现在人造板，物质丰富了。
        健身器材收，几乎不给钱。以前值钱，现在回收铁不值钱，因为现在用铁矿石，在大规模炼铁炼钢，成本比回收旧铁重新炼药低得多。=原料价格不断下降，经济极大发展，东西变得更便宜。