Polite discussion about an economics scenario

[BackAgain]

I saw a video or reel on another website.

It posed an interesting (albeit maybe basic) economics type riddle in the form of the following scenario (my reconstruction is different only as to the actors):

Man enters hotel lobby and asks for a room. Guy at desk says we have one such suite available. 1st man puts a $100.00 bill on the counter to secure the room while he inspects it first.

Desk guy uses that $100.00 bill to pay the meat supplier for the hotel’s restaurant.

Meat supplier uses it to pay the rancher who provided the cows to prepare the steaks.

The rancher pays back a part of his loan with the C note

The lender uses it to pay his son’s tutor.

The tutor brings his wife to the original hotel for an anniversary evening out. He gets a suite for $100.00 and uses the bill he just recieved.

That $100.00 bill is now on the counter when man 1 returns and rejects the suite and gets his $100.00 bill back.

Question: did anyone lose any money?

Question: did the C note “create” anything in that bit of circulation?

 

[Donald H]

I saw a video or reel on another website.

It posed an interesting (albeit maybe basic) economics type riddle in the form of the following scenario (my reconstruction is different only as to the actors):

Man enters hotel lobby and asks for a room. Guy at desk says we have one such suite available. 1st man puts a $100.00 bill on the counter to secure the room while he inspects it first.

Desk guy uses that $100.00 bill to pay the meat supplier for the hotel’s restaurant.

Meat supplier uses it to pay the rancher who provided the cows to prepare the steaks.

The rancher pays back a part of his loan with the C note

The lender uses it to pay his son’s tutor.

The tutor brings his wife to the original hotel for an anniversary evening out. He gets a suite for $100.00 and uses the bill he just recieved.

That $100.00 bill is now on the counter when man 1 returns and rejects the suite and gets his $100.00 bill back.

Question: did anyone lose any money?

Question: did the C note “create” anything in that bit of circulation?

That's the way the capitalist system is intended to work. Each person involved is supposed to take his/her cut of the $100, and then on down the line.

If a capitalist system allows the owner of the hotel to take $90 then maybe you can see how it doesn't work.

So how can the system be corrected and does it need to be corrected so that everybody gets a piece of the pie?

Can it be corrected without government involvement?

To your questions: Nobody expects that the entire $100 would be passed on! What is reality?

 

[BackAgain]

That's the way the capitalist system is intended to work. Each person involved is supposed to take his/her cut of the $100, and then on down the line.

If a capitalist system allows the owner of the hotel to take $90 then maybe you can see how it doesn't work.

So how can the system be corrected and does it need to be corrected so that everybody gets a piece of the pie?

Can it be corrected without government involvement?

Try again. Maybe employ actual English.

 

[Donald H]

Try again. Maybe employ actual English.

Well that's my contribution. Now you're just stumped aren't you! You tried to lay out an imaginary scenario that would never take place and you did it for the purpose of trying to spam the lib'ruls.

In the real world the hotel owner never takes the entire $100, but he does take a portion. In America he gets away with taking something closer to $90, which leaves very little left for the fkng peasants.

Now run away schmuck, before you shoot off the other foot.

 

[BackAgain]

Well that's my contribution. Now you're just stumped aren't you! You tried to lay out an imaginary scenario that would never take place and you did it for the purpose of trying to spam the lib'ruls.

In the real world the hotel owner never takes the entire $100, but he does take a portion. In America he gets away with taking something closer to $90, which leaves very little left for the fkng peasants.

Now run away schmuck, before you shoot off the other foot.

Your ability to communicate coherently speaks for itself.

Irony.

 

[TNHarley]

The hotel spent 100 bucks.
What I dont get is, why did it take that man so long to inspect the room? Sounds like some funny shit was going on..

 

[jwoodie]

Try again. Maybe employ actual English.

You are both right. The velocity of money is how fast it circulates through the economy. The multiplier effect how many times that money can be used for different purposes. As profit and transactional expenses are deducted, the multiplier effect is sequentially reduced. For example, an overhead expense of 10% on each transaction would result in a multiplier effect of about ten. Thus the initial deposit of $100 would ultimately result in about $1,000 of productive economic activity.

 

[Donald H]

The hotel spent 100 bucks.
What I dont get is, why did it take that man so long to inspect the room? Sounds like some funny shit was going on..

Got you too didn't he!
Now you can run for cover or prove you understand reality.

Or better still, just spam and keep the lesson in mind for when some fascist asshole tries to get away with it again.

 

[Donald H]

You are both right. The velocity of money is how fast it circulates through the economy. The multiplier effect how many times that money can be used for different purposes. As profit and transactional expenses are deducted, the multiplier effect is sequentially reduced. For example, an overhead expense of 10% on each transaction would result in a multiplier effect of about ten. Thus the initial deposit of $100 would ultimately result in about $1,000 of productive economic activity.

Good answer, and true in part, but you can't make the OP right no matter how hard you try.

You did succeed in complicating the question to mae it out of reach for 9 our of 10 Americans. If you didn't have to be contradictory you could have left it in my simple terms that are basically correct.

The easy lesson for the OP to understand: Greedy capitalism doesn't work!

Capitalism works. China is demonstrating to the rest of the world how it has to work!

 

[BackAgain]

The hotel spent 100 bucks.
What I dont get is, why did it take that man so long to inspect the room? Sounds like some funny shit was going on..

All analogies limp.

 

[Kilroy2]

The hotel lost money.

 

[TNHarley]

All analogies limp.

nu uh

 

[BackAgain]

Good answer, and true in part, but you can't make the OP right no matter how hard you try.

You did succeed in complicating the question to mae it out of reach for 9 our of 10 Americans. If you didn't have to be contradictory you could have left it in my simple terms that are basically correct.

The easy lesson for the OP to understand: Greedy capitalism doesn't work!

Capitalism works. China is demonstrating to the rest of the world how it has to work!

The dullard Canuck Duck is quacking away. It has an issue with “capitalism.” But nobody is so silly as to buy his shit.

 

[The Sage of Main Street]

The easy lesson for the OP to understand: Greedy capitalism doesn't work!

Capitalism works. China is demonstrating to the rest of the world how it has to work!

Shows Show Only the Shallow

The rulers script the debate so it becomes about greed. One of the rulers' sides say it is dishonest; the other side claims it is well-deserved. But the real cause of cheating and overreaching is incompetence.

Heirs and their flunkies manufactured by class-biased college education are inferior people placed in superior positions. The only way such wannabe producers can make a profit is through cheating. So it is not greed at all; it is desperation.

Theoretical economics from academia is only capable of understanding structure, which is a shallow analysis. It is the materials used to build the structure that make it work or not. Defective materials, or the wrong materials fit into the blueprint will make it fall apart, no matter how sound the structure is theoretically.