Monthly Archives: January 2015

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Before answering questions below, make sure you have already done with these questions first to see whether you are subject to this kind of tax or not.

Does your country have tax treaty with Indonesian government?

If Yes, check tax treaty between Indonesian government and your government because tax rate under tax treaty usually below normal rate.

If No, see below

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According to Indonesian Tax Law, foreigner/expatriate in Indonesia can be included as subject to individual income tax. Answer following questions to see whether you are subject to individual income tax in Indonesia or not.

Do you earn income from/in Indonesia?

If No, you don’t have to pay individual income tax

If Yes, see below

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There are two kinds of risk aversion: Absolute and Relative. Absolute risk aversion has implications for the willingness of individuals to accept risk. The higher the coefficient of absolute risk aversion, the higher the risk premium the individual is willing to pay. On the other hand, relative risk aversion is absolute risk aversion times W, indicating initial Wealth. The higher the coefficient of relative risk aversion, the higher the relative risk premium. Two examples below would explain Absolute Risk Aversion based on microeconomics point of view.

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Absolute risk aversion has implications for the willingness of individuals to accept risk. The higher the coefficient of absolute risk aversion, the higher the risk premium the individual is willing to pay. On the other hand, relative risk aversion is absolute risk aversion times W, indicating initial Wealth. The higher the coefficient of relative risk aversion, the higher the relative risk premium. Two examples below would explain Relative Risk Aversion based on microeconomics point of view.

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Overview

– The Great Depression was a severe worldwide economic depression in the decade preceding World War II

– Two Big Shifts in Aggregate Demand: The Great Depression and World War II. From 1929 to 1933 (The Great Depression), GDP fell by 27 percent. From 1939 to 1944 (World War II), the economy’s production of goods and services almost doubled

– It started in 1930 and lasted until the late 1930s or middle 1940s. This period consists of a decline in economic activity (1929–33) followed by a recovery (1934–39). It was the longest, most widespread, and deepest depression of the 20th century.

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Small Open Economy with no trade

If there is no trade in the small open economy, equilibrium is determined by the tangency between the PPF and indifference curve for the representative consumer. In equilibrium, the slope of the PFF is equal to minus the price of good a relative to good b (see figure bellow).

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This article talks about an overview to public finance, further explanation will be discussed later on separate article.

1. Public Finance Definition

What is Public Finance? Public Finance/Public Sector Economics/Public Economics is the field of economics that analyzes government taxation and spending policies and their influence on the allocation of resources and distribution of income.

Public finance economics both analyze actual policies and develop guidelines for government activities. In the latter role, economist are influenced by their attitudes toward the role of government in society.