CFA - Methods Flashcards
1
Q
The efficiency quantity between sold and production is the point between?
A
Marginal Cost (MgC) = Marginal benefits (MgB)
2
Q
Price Elasticity of Demand (PQP) é a variação do percentual de …. dividido pela variação percentual do ….
A
Pelast = Delta Q % / Delta P % / Sendo que ambos são calculos da seguinte forma: (Final - inicial) / média
2
Q
Consumer surplus is?
A
o quanto o consumidor economizou, excedente do consumidor
3
Q
Porduce surplus is?
A
o excedente do produtor, o quanto ele ganhou a mais do que queria
4
Q
Caso o Price Elasticity of Demand seja -1,94. Isso significa que?
A
Se o preço subir 1%, a quantidade irá cair 1,94%
5
Q
Price Elasticity of Demand for maior que 1 ou -1, a demanda é?
A
Elástica
6
Q
Price Elasticity of Demand for entre 0,99 e -0,99. A demanda é?
A
Inelástica
7
Q
Price Elasticity of Demand, se tem muito substitutos a demanda é elástica ou inelástica?
A
quanto mais substituto mais elástica é a demanda
7
Q
Price Elasticity of Demand quais são os 3 factors?
A
1) availability of substitutes; 2) time elapsed since the price change; 3) proportion of income spent the product
7
Q
Price Elasticity of Demand, se a pessoa gasta grande parte da sua renda em um item, este item tem a demanda mais ou menos elástica?
A
as more of the proportion of income the person spent on the item, more elastic is the demand of this item
7
Q
Price Elasticity of Demand, if the time elapsed since previous price change is high, a demanda é elastica ou inelastica?
A
mais elastica.
8
Q
For a Perfectly inelastic demand. A reta da demanda é vertical ou horizontal? And elasticity é zero ou infinita?
A
Vertical e é zero. (Qualquer preço, a demanda será a mesma)
9
Q
For a Perfectly elastic demand. A reta da demanda é vertical ou horizontal? And elasticity é zero ou infinita?
A
Horizontal e é infinita.
10
Q
A Straight-line Demanda Curve, the slope depends of?
A
Price and quantity. Lembrando que uma variação em um preço que ja é muito alto, irá ter uma maior variação na demanda, se tiver uma variação no preço de algo barato, a variação será menor. Ex: se aumentarem 1 real o preço do pod, vou continuar comprando, afeta muito pouco. Se aumentarem 200 reais o preço do pod, poucas pessoas vão continuar comprando
11
Q
Cross Price Elasticity of Demand, oque é e oque significa se for maior que zero ou se for menor que zero.
A
the ratio of the percentage change in the quantity demanded of a good to the percentage change in the price of a related good. Cross price elasticity > 0: the goods are substitutes (aumentou muito o preço do pod elfbar, ai começo a comprar ignite) / Cross price elasticity < 0: the goods are complements (aumento muito o preço do jack daniels, acabo comprando menos agua de coco e energético)
12
Q
Income Elasticity of Demand, seria % change in … dividido por % change in …
A
% change in quantity demanded dividido % change in income. it is the sensitivity of quantity demanded to changes in income
13
Q
Income Elasticity of Demand, what hapens if it is a normal good ? And if it is an inferior good?
A
Normal good: aumento no income, aumenta a demanda pelo item (Inc. Elasticity > 0). Inferior good: aumento no income, diminui a demanda pelo item (Inc. Elasticity < 0)
14
Q
What is the substitution effect?
A
When the price of a good falls, consumers purchase more that good and less of other goods. (Ex: valor da corona caiu, vou comprar mais corona e menos hieneken)
15
Q
What is the giffen good?
A
an inferior good for which the negative income effect of a price drecrease outweights the positive substitution effect
16
Q
Income effect what is? And what happen if it is negative or positive?
A
It is a decrease in the price of a good that a consumer purchases results in extra income if purchases remain the same price. If it is negative is inferior good and if it is positive is normal good
17
Q
What is the difference between information assimetry and information simetry?
A
Information assimetry não tem como o vendedor saber quanto a pessoa está disposta a pagar.
Information simetry o vendedor sabe exatamente quanto cada comprador está disposto a pagar (MgR = D)
18
Q
Data-Snooping bias:
A
from repeatedly doing tests on same data sample
19
Q
Sample Selection bias:
A
sample not really random
20
Q
Survivership bias:
A
sampling only surviving firms
21
Look-ahead bias:
using information not available at the time to construct sample
21
Time-period bias:
relatioship existis only during the time period of sample data
22
Self-selection bias:
backfill bias
23
What is Law diminishing return?
Cmg chaga em um ponto que vai aumentando e o lucro diminuindo.
24
Sobre Breakeven and Shutdown - Onde é o breakeven e quando é shutdown no SR and LR?
Se o Price é igual ao MC -> Breakeven;
Se o Price está abaixo do AVC -> No SR e LR shutdown;
Se o Price está entre AVC e ATC -> No SR operate mas no LR shutdown;
Se o Price está acima do MC (seria AVC) > gera lucro economico
25
Economies e diseconomies. Existem 3 estágios quais são?
1) Economies; 2) Minimum efficient sacle; 3) Diseconomies
26
Perfect Competition, principais caracteristicas
Price takers (precisam aceitar o preço do mercado); não tem influencia sobre o price, large numbers of independent firms, the firms have a small market share, no barries to entry or exit, supply and demand determine market price. Economic profit = 0; For the firm: D = MR = AR;
27
Pure Monopoly, principais caracteristicas
single producer of a product with no good substitutes (ex: empresa de transmissão de energia), barries to entry because it is economies of scale, sometimes needs government licensing, single-price monopolist must reduce price to sell more, marginal revenue is less than price. To maximize profit at MC = MR. Se for necessário regular o mercado seria: Mc = D or ATC = D.
28
Monopoly Competition, principais caracteristicas
large number of firms, each firm has a small market share, firms produce differentiated products (close but not substitutes), relativetly elastic demand, firms compete on price, quality and marketing, low barries to entry
29
Monopoly Competition, firms compete on 3 things, it is
price, quality and marketing.
30
Monopoly Competition qual a diferença em SR e LR
Em SR the firm can have a PRICE higher than ATC (tem economic profit), but in the LR the firm need to use price = ATC
31
Oligopoly principais caracteristicas
small numbers of sellers, firms demand curves less elastic than monopolistic competition, interdependence among competitors and their demand curves, significant barries to entry (scale of operations), products may be similiar or differentiated.
32
Explique os 3 tipos de Oligopoly (Kinked demand curve, cournot model, stackelberg model)
Kinked demand cuver: competitors match price decreases, but not price increases (ex: passagem de avião)
Cournot model: same product, identical cost, simulntaneous decisions, firms split the market equally (ex: cartel)
Stackelberg model: decisions are sequential, leader firms captures more of the market (ex: fiat vs outras)
33
Em Oligopoly, cournot model não funciona segunda a teoria de Nash Equilibrium, porque?
Empresas tendem a se trair, tentando pegar o mercado do concorrente, por isso lucro economico tende a zero e talvez algumas empresas quebrem no caminho
34
Herfindal-Hirscheman Index (HHI) vs N firm concentration ratio?
HHI: sum of squared market share of N largest firms in a market. More sensitive to mergers but ignores barries to entry and ignores elasticity of demand.
N firm concentration ratio: sum of the percentage market shares of the N firms in an industry. It is more simple but ignores barries to entry
35
GDP is the market value of ?
all final goods and services produced in a country/economic during the period.
36
Calculating GDP, the difference between Expenditure approach and Income Approach?
Expenditure approach: Opção 1: sumthe market value of all final goods and services produced in the economy. Opção 2: Sum all the increases in value (value added) at each stage of productions process.
Income approach: oncome of households + business + government
37
Oque é Twin deficit?
Deficit fiscal (G - T) is positivo e (X - M) is negativo.
37
Qual a formula do GDP? (cigarro do X-M)
GDP = C + I + G + (X-M) -> C = consumo; I = Investimento; G = governo; (X-M) = Exportação - Importação
38
Oque é Stagflation?
An economy with increasing inflation that is operating at less than full-employment GDP. (seria inflação alta e recessão).
38
Qual a formula para Se indio gosta de tribo, a xuxa de mansão?
(S - I) = (G - T) + (X - M)
38
Oque é Crowding out?
Quando o governo gasta mais do que arrecada (G - T é positivo) e (S - I) é positivo
39
Quais são os problemas para resolver Staglation? Is it possible government address inflation and recession?
if increasing AG to increase GDP would increase more the inflation.
If decreasing AD to reduce inflation would reduce more real GDP.
It is impossible address both.
39
What are the factors increase LRAS when we are talking about GDP?
Increase in labor supply, increase availability of natural resources, increase stock of physical capital, increase human capital (labor quality), advances in technology/labor productivity
40
Para aumentar o GDP, there are 3 things there are important?
1) growth in labor, growth in capital and technology/education
41
Sobre o GDP, também temos Law diminishing return? Qual item que quando investido em excesso pode causar esse fenomeno?
Technology. Em certo ponto será muito caro investir em tecnologia para o retorno que vai dar em GDP (ex: investimento dos USA na nasa para ir na lua, pararam de ir pq exige muito capital para pouco retorno
42
Is it fast or slow to increase physical capital?
slow.
43
About Neoclassical. Explicar: Cause of bussiness cycles and Recommended policy
Cause: technology changes; Recommended policy: allow wages, prcies to adjust;
Ex: melhor forma para ajustar o mercado, é ajustando os salários.
44
Keynesian. Explicar: Cause of bussiness cycles and Recommended policy
Cause: AD shifts with changes in business expectations; contractions pessist due to downard sticky wages;
Recommended: use fiscal and/or monetary policy to full employment;
Ex: estou com pouca demanda e o sindicato não deixa abaixar o salário, então o governo deve resolver
45
New Keynesian. Explicar: Cause of bussiness cycles and Recommended policy
Cause: same as Keynesian, but other input prices also downard stickty.
Recommended: same as keynesian, use fiscal and/or monetary policy
46
Monetarist. Explicar: Cause of bussiness cycles and Recommended policy
Cause: innapropriate changes in money supply growth rate;
Recommended: stready, predictable growth rate of money supply.
Ex: só deveria imprimir moeda conforme o crescimento do GDP
47
About Austrian. Explicar: Cause of bussiness cycles and Recommended policy
Cause: inappropriate government interation in economy;
Recommended: dont´force interest rates to artificially low levels;
Ex: o mercado deve ser livre, sem o governo se meter
47
About New classical (Real business cycle theory). Explicar: Cause of bussiness cycles and Recommended policy
Cause: rational responses to external shocks, technology changes;
Recommeded: don´t intervene to countract business cycles;
Ex: quando acontece algum evento inesperado, seria um shock, e por isso leva um tempo para o mercado se restabelecer
48
About economic indicators: Leading, Lagging and Coincident
Leading: é um indicador futuro. S&P Index, consumer expectations, 10-year interest spreads
Lagging: inflation, inventory/sales, change in labor cost, duration of unemployment
Coincident: employee payrolls, industrial production, main facturing sales
49
Types of Unemployment: Cyclical Unemployment; Frictional unemployment; structural unemployment
Cyclical unemployment: funcionários ficam trocando de emprego toda hora, ningume se especializa;
Frictional unemployment: funcionário troca de emprego porque recebeu uma proposta. É bom
Structural unemployment: pessoas não conseguem emprego porque precisam de novas skills e não possui, é preocupante. Ex: máquina substituindo trabalhadores.
50
Oque significa desinflation?
decrease in positive inflation over period
51
Hiperinflation?
inflação cresce mais de 100% em 3 anos
52
Two types of inflation?
Cost-push inflation: beigns with decrease in SR aggregate supply
Demand-pull inflation: beigns with an increase in aggregate demand that results in SR equilibrium greater than full-employment GDP
53
What are the most significants biases in the CPI data ?
consumer substitution of lower-priced products for higher-priced products;
New goods replace older (lower priced products)
Price increases due to quality improvements
54
Headline inflation?
prices indices that include all goods and services measure headline inflatio
55
Core inflation?
refers to price of all goods excluding food and energy
56
Formula Unemployment rate?
= number of unemployment / Labor force (labor force seria a população economicamente ativa, não inclui pessoas que não estão empregadas ou estão procurando emprego, termo seria discouraged workers)
57
Formula Participation rate (quando estamos falando sobre as medidas de employment or unemployment)
Participation rate = labor force / working-age population (só considera maiores que 16 anos de idade)
58
Oque são discouraged workers ?
are not employed or seeking employment, and it is not counted in labor force
59
Para calculo da inflação, CPI Laspeyres ou CPI paasche, é utilizado para medir inflação dos USA
USA usa CPI Laspeyres
60
Qual a formula do CPI Laspeyers?
= (BASE-YEAR basket at current price / BASE-YEAR basket at base year prices) x 100
61
CPI Paasche reduce substitution bias?
yes
61
Monetary Policy is the management of the supply of?
money and credit
62
If you increase money supply. It is expansonary ou contractionary?
expansionary
63
Fiscal Policy is about ?
G - T.
64
if the governemnt decrease taxes and increase spending. Is it expansonary or contractonary?
Expansonary
65
Oque é Fisher Effect? (refers to monetary policy)
Ele diz que a taxa de juros nominal é a taxa de juros real + a inflação esperada + um premio pela incerteza da inflação
66
Quais são os objetivos do Central Banks?
They try to have a price stability (low inflation rates). Usually the target is 2% or 3%. They can attempt to: maitain full employment; promote economic growth; keep exchange rates stable; keep long-term interest rate moderate
67
What is the 2 monetary policy tools? (Open market operations; required reserve ratio?
Open market operations: most often used. Central bank sells or buys government to increase or decreases money supply.
Required reserve ratio: lower reserve ratio increases funds banks have to make loans (Max money multiplier = 1 / required % reserve)
68
If Policy rate > neutral rate? It is contractionary or expansionary?
Contractionary
69
If Policy rate < neutral rate? It is contractionary or expansionary?
Expansonarity
70
The neutral interest rate try to?
growth rate of real GDP and target inflation rate
71
About Fiscal Policy (G-T). What is the idea of Keynesian economists and Monetarists ?
Keynesian: beleive discretionary fiscal policy can stabilize the economy, increasing AD to combat inflation.
Monetarists: acreditam que crises são temporarias e com uma politica monetaria correta, tudo volta ao normal
72
About Fiscal Policy (G-T). What are the tools to spending (G)?
Transfer payments: cash payments by government to redistribute wealth;
Current Spending: purchases of goods and services;
Capital spending: increase future productivity to support research or and new technologies.
73
About Fiscal Policy (G-T). What are the tools to revenue (T)?
Direct taxes: basied on income but take time to implement
Indirect taxes: basied on goods and servies, its quick implement to raise revenue or promote social goals, or both
73
Qual é a formula do Fiscal Multiplier?
FM = 1 / ( 1 - MPC * (1-t) ; Sendo que MPC é Marginal propsumption consumer
74
Qual a formula do BBM (Balance Budget Multiplier)?
(Delta G * FM) - (Delta T * FM)
74
What are the reasons to NOT be concerd about the size national of DEBT/GDP?
debt owed to own citizens, money used for capital investment, ricardian equivalence, spending reduces unemployment
75
Sobre Ricardian Equivalence? Se o governo baixar os impostos, as pessoas vão consumir mais?
Não, pois vão ficar com medo de que o governo aumente os impostos la na frente
76
About Geopolitics. Hegemony is non-cooperation or cooperation? is globalization or nationalism/anti-globalization?
Non-coperation and Globalization. Ex: USA and Russia
76
Sobre BBM (Balance Budget Multiplier), para que serve?
É a relação sobre o quanto o aumento de gastos do governo (G), vai aumentar a arrecadação de impostos (T). Com base no Fiscal Multiplier
76
What are the reasons to be concerd about the size national of DEBT/GDP?
May lead to higher future taxes, crowding out (of private investments), money creation may increase inflation
77
About Geopolitics? Multilateralism is non-cooperation or cooperation? is globalization or nationalism/anti-globalization?
Globalization and Cooperation. Ex: Alemanha, Japão
77
About Geopolitics? Autarky is non-cooperation or cooperation? is globalization or nationalism/anti-globalization?
Non-coperation and nationalism/anti-globalization. Ex: Korea do Norte
78
About Geopolitics? Bilateralism is non-cooperation or cooperation? is globalization or nationalism/anti-globalization?
Nationalism/anti-globalization and Cooperation. Ex: México
79
Exogenous risk?
unantecipated events (ex: natural disaster)
79
Event risk ?
Timming known but outcomes unkonw (ex: eleição)
80
Thematic risk?
risk that tend to grow over time (Ex: terrorismo)
81
About automatic stabilizers. Taxes and transfer payments tend to increase or decrease deficits during the recesions?
Increase
81
About Fiscal Policy lags. Recognition lags, action lags, impact lags?
Recognition lags: demora para entender que preicsa de uma mudação na politica fiscal.
Action lags: demora para implementar a mudança;
Impact lag: demora a nova politica fazer efeito
82
About automatic stabilizers. Taxes and transfer payments tend to increase or decrease deficits during the expansions?
Decreasing
82
What are the benefits about International trade?
Lower cost to consumers of import and higher employment, wages and profits in export industries
83
What are the prejudice about International trade?
Displacement of workers and lost profits in industries competing with imported goods
84
About models of trade. What is the ricardian model?
Labor is the only factor of production. Comparative advantage depends on relative labor productivity for different goods.
85
About models of trade. What is the Hckescher-Ohlim model?
Two factors labor and capital. Comparative advantage depends on relative amount of each factor possessed by county. With trade, the price is more abudant factor increeases in each country
86
What is absolute comparative?
Refers to lower cost in terms of resources used
87
What is comparative advantage?
Refers to the lowest opportunity cost to produce a product
88
What are the reasons for trade restrictions?
Protecting domestic job and producers
89
About objectives of capital restrictions ...
REDUCE VOLATILITY of domestic prices; MAINTAIN EXCHANGE RATE TARGET while using monetary and fiscal policy for domestic goals; KEEP DOMESTIC INTEREST RATES LOW by restricting outflows of capital to foreign; PROTECT STRATEGIC INDUSTRIES from foreign downership.
90
In trade restrictions. What are the effects for the consumer in: Tariff, Import Quota, Voluntary Export Restaint and Export Subsidy?
Tariff: loses
Import Quota: Loses
Voluntary Export Restraint: loses
Export Subsidy: Loses
91
In trade restrictions. What are the effects for the Producer in: Tariff, Import Quota, Voluntary Export Restaint and Export Subsidy?
Tariff: Gains
Import Quota: Gains
Voluntary Export Restraint: Gains
Export Subsidy: Gains
92
In trade restrictions. What are the effects for the government in: Tariff, Import Quota, Voluntary Export Restaint and Export Subsidy?
Tariff: gains
Import Quota: Depends (on wether the government captures quota rents)
Voluntary Export Restraint: No change
Export Subsidy: No change
93
In trade restrictions. What are the effects for the welfare (saúde/bem estar) in: Tariff, Import Quota, Voluntary Export Restaint and Export Subsidy?
Tariff: loses (possible gain in theory in large country if no retaliation and gains from lower world price oputweigh deadweight losses)
Import Quota: Loses (possible gain in theory in a large country if government captures quota rents)
Voluntary Export Restraint: loses
Export Subsidy: Loses
94
About Balance of payments. There are Current Account, Capital Account and Fincancial Account. Explain in Current Account what are the 3 items.
Balance of trade: bens materiais (exportação e importação)
Balance of Services: serviços, patentes e etc
Unilateral transfer: mandar dinha para o filho no exterior, não tem retorno.
94
About Balance of payments. There are Current Account, Capital Account and Fincancial Account. Explain in Capital Account what are the 3 items.
FDI (Forest direct investment): empresa estrangeira entra no Brasil
Security and loans
Special Drawning rights (FMI): pegar empréstimos
95
About Balance of payments. There are Current Account, Capital Account and Fincancial Account. Explain in Finacial Account what is the item
Reserves: reservas se for necessário.
96
About Foreign Exchange Quotations. What are the difference between Nominal and Real?
Nominal: exchange rate is quoted rate at any point in time
Real: exchange rate is the normal exchange rate adjusted for inflation in each country compared to a base period.
97
What are the formula to calculate the Real exchange rate (p/b)?
CPI base / CPI price
98
Formula Foward Exchange Rate?
(( 1 + Interest Rate price x tempo) / ( 1 + Interest Rate base x tempo)) x spot
99
Classic Marshall-Lener Condition. What is the formula?
Wm = Imports / (Imports + Exports) and Wx = Exports / (Imports + Exports). Ex + Exm > 1 (seria curva de elasticidade)
100
Sobre J-curve effect. Qual efeito em SR and LR?
SR = demanda é inelastica. SR = demanda é elastica
