Answer:
Tariffs increase the prices of imports, helping domestic producers, while voluntary restraints do not.
Explanation:
A tarrif is defined as a tax that is imposed by government on goods and services that are imported from another country. Tarrifs are used to discourage imports by increasing their prices compared to locally produced goods and services.
Voluntary restraint agreements is is also called voluntary export restraint. It is a restriction on the amount of goods and services that exporters are allowed to export to other countries. It is also referred to as export visa.
Tarrifs results in increase in price of goods and services while voluntary restraint agreement does not.
It is true because a country that imports a tariff on shoes buyers of shoes in that country don’t do well so the answer would be True
Answer:
C. the divine coincidence does not always hold
Explanation:
When a temporary negative supply shock hits the economy the divine coincidence does not always hold.
Answer and Explanation:
Economic Growth can be defined as an increment in production capacity of an economy using all its available resources. The PPF illustrates the largest possible quantity of goods and services a nation can produce base on its available resources. An outward shift in the economy’s production possibility frontier (PPF) depicts a raise in productive capacity of an economy. An outward shift implies that an economy has capacity to increase its production outputs. This can be as a result of the economy employing new technology, allowing specialization, increasing its labour force, using new production approaches etc. Likewise, an inward shifting PPF implies an economy has witness a loss or exhaustion of some of its scarce resources and it will culminate into reduction in an economy’s productive potential.
Effects of saving and investment upon national GDP
level of savings direct related to the level of investment, investment feeds on available finance from saving. If more people save, the banks will be able to lend more to firms to support their investments.
low savings and investment implies a PPF inward shift. low savings in economy implies that the economy is opting for short-term consumption over long-term investment, and this will lead to future undue pressure on available infrastructures ad resources.
spending on consumer goods vs capital goods effect on the economy
In the short run, the economy must prefer using available resources to produce capital rather than consumer goods. Standards of living will be affected, as private consumption will have access to fewer resources. However, in the longer run, the raised production of capital goods will boost the production of more consumer goods ad therefore standards of living will experience more increase than they would have witness if the economy had spent most of its income on consumer goods.
A. NPV of the project
NPV = -2000 + 2500/(1.15) = $173.91
B. Value of the firm and its debt and equity components before and after the project addition.
Determine expected cash flows before the project.
($3,000 + $3,000 + $1,000)/3)/1.15 = $2,333.33/1.15 = $2,028.99
($1,500 + $0 + $0)/3)/1.15 = $500/1.15=$434.78
Determine value with project.
($3,000 + $3,000 + $3,000)/3)/1.15 =$3,000/1.15 = $2,608.70
($4,000 + $2,500 + $500)/3)/1.15 = $2,333.33/1.15=$2,028.99
C. The company should not take the project because the NPV does not go to equity but to bond holders.
