[A Sip of Books] 51 Most Frequently Asked Economic Questions by People

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This book sheds light on the economic principles that drive everyday life. Before being swayed by timing and rising stars, it introduces key economic concepts and principles such as how interest rates change, what happens with exchange rate fluctuations, and the factors driving inflation. Two authors working at the Bank of England have separately compiled 51 of the most frequently asked questions about economics.

Before 1998, university students in the UK did not pay any tuition fees. Of course, they had to cover costs like books and dormitory fees, but these could be managed through scholarships. However, in November 1997, a bill was proposed allowing universities to charge incoming students up to ?1,000 (about 1.6 million KRW) per year in tuition fees. One report emphasized the precarious financial state of UK universities and explained the economic and social reasons why this issue had to be resolved through tuition fees paid by students. It was only later realized that the introduction of tuition fees in 1997 was just the beginning. In 2006, the annual tuition fee rose to ?3,000, and in 2012, it tripled again to ?9,000, prompting many students to protest with street demonstrations. Debates over the amount of tuition fees and who should bear the cost are complex and often worrisome. However, at the root of this debate lies a fundamental economic concept: externality. -p.76, from "Can We Leave the Climate Crisis to the Market?"

What exactly does technology mean? You might think of technology as knowledge or know-how. The more knowledge you have about cakes, the more or better cakes you can make using the same baking pan (land), the same labor (you), and the same capital (spoon). If technology is likened to cake-making, it can be seen as a new cookbook containing the secrets to making tastier cakes even when using the same ingredients as before. -p.132, from "Why Do I Live Wealthier Than My Grandfather?"

Another problem with Bitcoin stems from the very characteristic that Nakamoto and others valued: its fixed supply. This is essentially the same as the gold standard, except it is not backed by gold. Bitcoin cannot be issued arbitrarily, and as history of the gold standard shows, when supply is rigid, it cannot respond to changes in demand. Bitcoin is an attractive technology and many people have made money using it, but most economists agree that it is not money. -p.215, from "What Exactly Is Money?"

The South Sea Company bankruptcy affected the entire economy. Banks in London began to fail because they could not recover their loans. This event also had a harmful impact on other stocks. This type of crisis is defined as speculation. It means large-scale investments were made simply because it seemed prices would rise without clear grounds. The bubble bursts the moment investors realize the investment targets were overvalued. This happened in 1929, 1987, and again in 2007-2008. -p.257, from "Why Did No One Know the Economy Would Collapse?"

Studying Economics Before Investing | Written by Rupal Patel & Jack Meening | Translated by Lee Kyung-sik | Willbook | 336 pages | 18,800 KRW

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