Shahid Monametsi
This chapter discusses the basic tools used in finance when analyzing a financial market ( by the looks of it they are mostly focused on bonds in this chapter). I found this chapter to be easy to understand as it is often times the applied situations on tests that I struggle to understand. This chapter, however, seemed to have none of that built into the lesson, so I am positive that I will be able to succeed. This chapter covers the range of approaches that people (investors) take when they consider purchasing ownership. It was a little easier to digest as the last chapter covered this topic in great detail (the slightly easier portion of the unit test). To me this all seems very relate-able as risk aversion happens in everyday life. It only seems natural that it play a part in finance when choosing a stock or bond. Even the equations in this chapter were easy to grasp as they were all covered to an extent in math classes.
The only thing that I struggle to understand was the utility function. I'm not really sure how they got that shape from the risk aversion. One would think that wealth would only raise and that the curve would be concave up. I fail to comprehend why it is a flat line and hope to uncover this in the future, before any testing.
Wednesday, January 25, 2017
Thursday, January 19, 2017
Chapter 26 Blog Post
This chapter discusses financial economics. It covers the the investment aspect of economics which is more specifically the investments portion of GDP. While I originally knew how to derive/ isolate the I in the equation of GDP (Y), I'm not too sure how to find the other equations that the book gave us. I know that we will most likely have to have memorized those though, I know that I will definitely have to commit that to my memory in the coming days.
Another thing that this chapter cover was the idea that the laws of supply and demand play a similar role when talking about investments. This to me was very shocking, as I did not think that I would be using a supply and demand chart in a chapter like this. This, however did make the concept easier for me to understand as it is not very complex. From there the chapter then talks about the factors that then affect the equilibrium interest. This was too difficult to comprehend either as this was also very similar to the factors stated in supply and demand. I think that this chapter will not be bad, however the tests always trip me up, so we'll see.
Another thing that this chapter cover was the idea that the laws of supply and demand play a similar role when talking about investments. This to me was very shocking, as I did not think that I would be using a supply and demand chart in a chapter like this. This, however did make the concept easier for me to understand as it is not very complex. From there the chapter then talks about the factors that then affect the equilibrium interest. This was too difficult to comprehend either as this was also very similar to the factors stated in supply and demand. I think that this chapter will not be bad, however the tests always trip me up, so we'll see.
Monday, January 16, 2017
Chapter 24 Blog Post
This chapter moves onto CPI (consumer price index) and PPI (producer price index). This however becomes a little confusing at times, as one can't help but wonder what the purpose of GDP and the GDP deflator is at this point. It is important to remember (or learn I suppose) that GDP measures produced goods, while the CPI focuses on purchased goods. This most definitely one of the more trickier parts of the chapter. The equations were not that hard to grasp, however I'm sure that will trip up a lot of people. I hope to fully grasp the importance and differentiate the two measurements. I also hope to remember the factors that weight into CPI misconceptions (substitution biases, Introduction to new goods, and Unmeasured quality changes.
Something I didn't quite like from this chapter was how they approached the explanation of measuring inflation. I fail to understand the differences between the inflations received from CPI and GDP deflators. The chapter also makes it seem as though the price will always increase. I think that that is very misleading, as that may not be the case if one might be looking a recession. I myself am still not quite sure how to figure out when a recession occurs, but I think that it would be great if the writer (Mankiw) or Mr. Waller took time to explicitly talk about this.
Something I didn't quite like from this chapter was how they approached the explanation of measuring inflation. I fail to understand the differences between the inflations received from CPI and GDP deflators. The chapter also makes it seem as though the price will always increase. I think that that is very misleading, as that may not be the case if one might be looking a recession. I myself am still not quite sure how to figure out when a recession occurs, but I think that it would be great if the writer (Mankiw) or Mr. Waller took time to explicitly talk about this.
Sunday, January 8, 2017
Chapter 23 Blog Post
This chapter begins by differentiating between microeconomics and macroeconomics. After having spent the first half of the schools learning about micro it was nice to look back at the definition, because it reminds you the purpose of everything you've learned.
The new information in this chapter covers Gross Domestic Product and the many markets that contribute to a nation's GDP. I thought that this all seemed fairly similar as we have covered something similar to the flow chart in the micro section of econ. It also made sense that black market products did not contribute as they are not sold over the counter/ legally. While I knew about the Gross Domestic Product and its use before this chapter I had no idea that there were different types or about GDP Deflator. I don't quite understand the reason for there being two different measurement, but I acknowledge them. I like how the book thought to finish off by saying economically well off does not equate to happiness. This seems to be a common debate, and I found it interesting that the book even felt the need to bring that up.
The new information in this chapter covers Gross Domestic Product and the many markets that contribute to a nation's GDP. I thought that this all seemed fairly similar as we have covered something similar to the flow chart in the micro section of econ. It also made sense that black market products did not contribute as they are not sold over the counter/ legally. While I knew about the Gross Domestic Product and its use before this chapter I had no idea that there were different types or about GDP Deflator. I don't quite understand the reason for there being two different measurement, but I acknowledge them. I like how the book thought to finish off by saying economically well off does not equate to happiness. This seems to be a common debate, and I found it interesting that the book even felt the need to bring that up.
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