economics

Question 1

gresham’s law

Answer 1

observation in economics that “bad money drives out good.” More exactly, if coins containing metal of different value have the same value as legal tender, the coins composed of the cheaper metal will be used for payment, while those made of more expensive metal will be hoarded or exported and thus tend to disappear from circulation.

Money functions in ways other than as a domestic medium of exchange; it also may be used for foreign exchange, as a commodity, or as a store of value. If a particular kind of money is worth more in one of these other functions, it will be used in foreign exchange or will be hoarded rather than used for domestic transactions. For example, during the period from 1792 to 1834 the United States maintained an exchange ratio between silver and gold of 15:1, while ratios in Europe ranged from 15.5:1 to 16.06:1. This made it profitable for owners of gold to sell their gold in the European market and take their silver to the United States mint. The effect was that gold was withdrawn from domestic American circulation; the “inferior” money had driven it out.

Question 2

lindy effect

Answer 2

the remaining lifespan of a non-perishable item is equal to how long it has been in existence, meaning the older something is the more likely it is to continue to survive the tests of time

Question 3

greenmailing

Answer 3

Greenmail is the practice of buying enough shares in a company to threaten ahostile takeoverso that the target company will instead repurchase its shares at a premium.

Question 4

grin-fuck

Answer 4

when someone smiles and shakes your hand in a business meeting assuring you that they will take your thoughts into consideration but when in truth they have already dismissed you

Question 5

sheepskin effect

Answer 5

phenomenon in applied economics observing that people possessing a completed academic degree earn a greater income than people who have an equivalent amount of studying without possessing an academic degree