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Assoli18 [71]
3 years ago
13

On January 1, 2001, El Salvador "dollarized" its economy. The U.S. dollar circulated throughout the country along with the Salva

doran colon for the first year. By the end of 2002, the official currency circulating in the economy was the U.S. dollar. El Salvador abandoned its own currency and adopted the currency of the United States because:
Business
2 answers:
solniwko [45]3 years ago
6 0

Answer:

1. The government could not finance it's deficit budget.

2. The Dollar was stable and Through dollar adoption, interest rate would be lowered and investments would increase.

Explanation:

The colon was changed to dollars because El Salvador wanted a boost in it's economy through the US Dollar.

Printing money to finance deficit would no longer be done by the government and inflation would be brought under control. Because of the adoption El Salvador has no control over it's monetary policy.

the government would still be able to run deficits by printing money

with dollars, shocks caused by demand in the economy will be offset more effectively by using monetary policy.

By printing U.S. dollars, the government would still be able to finance deficits.

stealth61 [152]3 years ago
5 0

Answer:

The government would no longer be able to finance deficits by printing money, and inflation would be under control.

Explanation:

The country of El Salvador abandoned it currency, therefore the country no longer has a national currency, this mean that, government cannot print it because it is using the currency of the U.S. There will be better control of deficits and reduction in inflation because they are forced by adoption of the U.S. Also, Sharing the same currency with U.S, this implies that they will share the same monetary policy with the United Sated of America.

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You are a self-employed profit-maximizing consultant specializing in monoplies. Five single-price, profit-maximizing monopolies
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Answer:

<u>Firm A  </u>

Firm A is charging a cost of $3.90 for every unit. The normal expense is the all out cost separated by amount which ends up being $3.70 per unit. Presently its minor income is $3.00 per unit and negligible expense is $2.90 per unit. The imposing business model firm can't create enough yield in light of the fact that the minor income surpasses the minimal expense.  

Consequently, Firm A is encouraged to expand its yield. This will bring increasingly net income and get it a higher benefit. The yield should increment till minimal income and negligible expense gets equivalent.  

<u>Firm B  </u>

Firm B is charging a cost of $5.90 for every unit. The normal expense is $4.74 per unit. Presently its peripheral expense is $5.90 per unit. Note that the syndication firm is charging a value which is equivalent to the negligible expense. Consequently, it is carrying on seriously. by delivering more and charging less.  

Consequently, Firm An is encouraged to diminish its yield. This will expand cost more than the expansion in cost with the goal that it acquires a higher benefit. The yield should diminish till minimal income and minor expense gets equivalent.  

<u>Firm C  </u>

Firm C is charging a cost of $11.00 for every unit. The normal expense is the all out expense is $11.90 per unit. Minimal income is $9.00 per unit and minor expense is $9.00 per unit. The imposing business model firm is delivering a benefit expanding yield on the grounds that the minor income rises to the peripheral expense. Nonetheless, it is bearing misfortunes since normal expense is higher than cost.  

Thus, Firm C is encouraged to stay at the present degree of yield. It can close down over the long haul if misfortunes keep on happening. This is on the grounds that it can't increment or diminishing its yield as it will just alumni the misfortunes.  

<u>Firm D  </u>

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Thus, Firm D has fouled up estimations with respect to its cost. Thoughtfully, the cost ought to consistently be higher than the minimal income or at most extreme it tends to be equivalent to minor income. It ought to return and recalculate the cost.  

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The information identified with the minor income and minimal expense for Firm E isn't given. The cost charged is $35.00 per unit. The normal expense is at its base level and is equivalent to $33.00 per unit. This data isn't adequate to distinguish if the firm is working at a benefit boosting level.  

Therefore, Firm E is encouraged to stay at the present degree of yield.

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