If people's need (Demand) for money is more sensitive (elastic) to price level changes,, then when the price level increases the Demand for Money curve will shift rightward more,, therefore the Nominal interest rate will increase at a greater rate than if people's need (Demand) for money is less sensitive (inelastic) to price level changes.
Interest Rate Sensitivity and Investment Demand
If people's investment demand is more sensitive (elastic) to interest rates,, then when the interest rates increase investment demand will decrease by a larger amount (think full crowding-out),, if people's investment demand is less sensitive (inelastic) to interest rates,, then when interest rates increase investment demand will decrease by a small amount (think partial crowding-out)
Thursday, January 23, 2020
Journey to thank a thousand people for a morning cup of Joe.
Ted Talk
Author AJ Jacobs embarked on a quest with a deceptively simple idea at its heart: to personally thank every person who helped make his morning cup of coffee. More than one thousand "thank yous" later, Jacobs reflects on the globe-trotting journey that ensued -- and shares the life-altering wisdom he picked up along the way. "I discovered that my coffee would not be possible without hundreds of people I take for granted," Jacobs says.
Specialization
Comparative Advantage
Division of Labor
Invisible Hand
MR University
A simple example of hamburgers being made at home versus at a restaurant can help illuminate the explosion of prosperity since the Industrial Revolution. The story of the division of labor and development of specialized tools is not a new one — Adam Smith began The Wealth of Nations with this concept. Yet it still has tremendous explanatory power about the world we inhabit.
Every spring convoys of trucks arrive in the almond orchards of central California. They are carrying bees. Millions of them.
They arrive from all over the country, but especially southern states like Louisiana, and they have to get there at just the right time, when the almond trees start to flower so the bees can pollinate hundreds of acres of almond fields.
But why make the 2,000 mile trek from the South instead of raising bees right in the Central Valley? It comes down to comparative advantage. Louisiana has better conditions for bees. It's warm, green and there are plenty of flowers for the bees. And California has the edge in almond growing.
The journey has it's own set of challenges. Not least of which is, you can't stop during the day or the bees try to escape.
Today on the show, how bees keep our produce sections stocked with fruit.
