What are the biggest misconceptions people have about economics?

How prices are set - prices are generally set at by determining the profit maximizing price, many people believe that prices are generally set on a cost plus basis.  This misconception is behind the belief that businesses will simply 'pass the cost on to consumers'.  In

Which countries use the US dollar as their national currency?

The US dollar is the official currency of the following countries:EcuadorEl SalvadorMarshall IslandsMicronesiaPalauPanamaTimor-LesteThe United States (obviously)It is also used several non-US territories, such as the British Virgin Isles, Caribbean Netherlands, and Turks & Caicos Islands.

Which country in the world has the highest income tax rates?

Many countries adopt progressive taxation - each income level pay different rate. So, it's not fair to compare 'the highest income tax rate' across the world.In general, European countries have higher rate since they provide generous welfare to their

Will the US ever be able to pay off the national debt?

The debt will not be paid off, because voters will not elect politicians who will raise taxes and cut expenditures.Certainly nobody alive today will live to see the debt go to zero, but that may be okay. For reasons I am not smart enough

What are some major controversies in economics?

Here's one issue that's massively controversial that is mostly in the background but has huge implications on economic policies:How you compare GDP of different countries.This sounds like a no brainer - GDP is GDP right? We often hear figures like US's GDP is 16.77 trillion USD (in 2013) and that's way more than

Does wealth create poverty?

It is the exact opposite. Wealth creates wealth.I recently came across a wonderful story. It is the story of a man named Earl Crawly.Mr. Crawly has for 44 years been working at a parking lot. His salary? $12/hour.This is what many would call a

Economics: Is Texas in better shape than most states after the recession? Why?

Texas is the center of two of America's biggest addictions - oil and war. These industries are often recession-proof & counter-cyclical. Thus, Texas is not much affected by the recession due to the nature of its economy. Two weeks ago, I drove Texas end to end (from Arkansas

How does employment at-will as the default rule help employees in light of the imbalance of power between labor and capital?

In a word, it does not. You can leave your job at any time, but that is small compensation for having your job constantly at risk. In practice, employers don't usually fire people arbitrarily and without notice: they generally make some effort to build a case against the employee (even if the charges are trumped up), and many offer

What are some common misconceptions people have about capitalism?

Thanks for the A2A.  Some great answers already.  Here are some misconceptions that I would add:That property ownership is some sort of natural or inevitable right.  This is a completely invented concept and has no empirical basis.  Property ownership, like many other social constructs of modern society, is a collective agreement enabled and enforced by

What are the biggest misconceptions people have about economics?

How prices are set - prices are generally set at by determining the profit maximizing price, many people believe that prices are generally set on a cost plus basis.  This misconception is behind the belief that businesses will simply 'pass the cost on to

What are the most common misconceptions about socialism?

socialism / communism are blanket terms for all leftist movements and can be used interchangeablyThis is arguably the worst misconception of all. Leftists are perhaps the most diverse political spectrum, ranging from anarcho-syndicalists to Marxist-Leninist-Maoists and everything in between, and to cast an immediate stigma and preconceived judgement upon all of them is frivolous and sectarian to say

What developed country is the most corrupt in the world?

Transparency International's Corruption Perceptions Index rates countries on how corrupt they are perceived (mostly by foreigners) to be.  The top quartile of the UN's Human Development Index lists 47 countries that are clearly developed.  Argentina is the 45th from the top, and its Corruption Perceptions Index is a mere 34.  So it is the most corrupt country that can

What will happen if financial crisis happens today?

Immediately financial markets will crash . Money supply issues. Capital shortage low production low returns low productivity. Economy slump. Despite of all these indian economy will not face such scene. As its fin. Sector is so tightenDo not allow any such issues. It

Why is same-sex marriage of political concern?

It is of political concern because in just about every country in the world the act of getting and being married results in the government bestowing certain benefits on the married couple.Pension rights, insurance rights, rights of survivorship and inheritance, the rights vary from