Answer:Governments intervene in markets to address inefficiency. In an optimally efficient market, resources are perfectly allocated to those that need them in the amounts they need. In inefficient markets that is not the case; some may have too much of a resource while others do not have enough. Inefficiency can take many different forms. The government tries to combat these inequities through regulation, taxation, and subsidies. Most governments have any combination of four different objectives when they intervene in the market.
Maximizing Social Welfare
In an unregulated inefficient market, cartels and other types of organizations can wield monopolistic power, raising entry costs and limiting the development of infrastructure. Without regulation, businesses can produce negative externalities without consequence. This all leads to diminished resources, stifled innovation, and minimized trade and its corresponding benefits. Government intervention through regulation can directly address these issues.
Another example of intervention to promote social welfare involves public goods. Certain depletable goods, like public parks, aren’t owned by an individual. This means that no price is assigned to the use of that good and everyone can use it. As a result, it is very easy for these assets to be depleted. Governments intervene to ensure those resources are not depleted.
Macro-Economic Factors
Governments also intervene to minimize the damage caused by naturally occurring economic events. Recessions and inflation are part of the natural business cycle but can have a devastating effect on citizens. In these cases, governments intervene through subsidies and manipulation of the money supply to minimize the harsh impact of economic forces on its constituents.
Socio-Economic Factors
Governments may also intervene in markets to promote general economic fairness. Government often try, through taxation and welfare programs, to reallocate financial resources from the wealthy to those that are most in need. Other examples of market intervention for socio-economic reasons include employment laws to protect certain segments of the population and the regulation of the manufacture of certain products to ensure the health and well-being of consumers.
Explanation:
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Answer:
The correct answer is: investigative spider-webbing.
Explanation:
Investigative spider-webbing refers to the practice of using information media to enhance the data that could be collected from a source that is already in use. The secondary information is typically obtained from the internet using laptops, smartphones or tablets to obtain supplementary content on relevant information or to create content that could be immediately seen in the primary device.
Answer:
PV= $1,521,531.53
Explanation:
Giving the following information:
Future value= $1,700,000
Number of periods= 1 year
Interest rate= 11%
<u>To calculate the initial value of the loan, we need to use the following formula:</u>
PV= FV/(1+i)^n
FV= future value
n= number of periods
i= interest rate
PV= present value
PV= 1,700,000/1.11
PV= $1,521,531.53
Answer:
The answer is 0.0707
Explanation:
Solution
Given that:
Probability Return Probability(return-expected return)^2
0.25 25 0.25(25-15)^2=25
0.5 15 0.5(15-15)^2=0
0.25 5 0.25(5-15)^2=25
Total = 25 +0 + 25
= 50
Thus
The next step is to find the standard deviation which is given below:
Standard deviation=[total probability (return-expected return)^2/total probability]^(1/2)
=(50)^(1/2)
=0.0707
Hence the standard deviation is 0.0707.
Note: The expected return is =15%
Answer:
c. decreases the value of its bonds
Explanation:
There is a significant decrease in the value of the bond if the firm declares bankruptcy.
