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creativ13 [48]
3 years ago
8

Explain and discuss how each phase of the boom-and-bust cycle has characterized the history of capital flows from the advanced i

ndustrial countries to the developing world. Should national governments or international institutions regulate capital flows? How effective are capital controls? What is the role of the IMF in regulating cross-border capital flows
Business
1 answer:
Neporo4naja [7]3 years ago
3 0

Answer:

The boom and bust cycle is a process of economic expansion and contraction that occurs one after the other. During the boom the economy grows, jobs are plentiful and the market brings high returns to investors. In the subsequent bust the economy shrinks, people lose their jobs and investors lose money.

Explanation:

Characteristics of Boom: Increases in demand for capital/consumer goods. Businesses tend to increase their investment, employment opportunities abound, Consumer confidence is strong and consumers have a positive outlook.

The bust periods are referred to as recessions; if the recession is particularly severe, it is called a depression.

Since the mid-1940s, the United States has experienced several boom and bust cycles. Why do we have a boom and bust cycle instead of a long, steady economic growth period? The answer can be found in the way central banks handle the money supply.

During a boom, a central bank makes it easier to obtain credit by lending money at low interest rates. Individuals and businesses can then borrow money easily and cheaply and invest it in, say, technology stocks or houses. Many people earn high returns on their investments, and the economy grows.

Yes, national government and international institutions should regulate capital flows because when credit is too easy to obtain and interest rates are too low, people will overinvest. This excess investment is called “malinvestment.”

When this happens, There won’t be enough demand and the bust cycle will set in. Investments will decline in value. Investors lose money, consumers cut spending and companies cut jobs. Credit becomes more difficult to obtain as borrowers become unable to make their loan payments.

The IMF controls cross border flows by promoting exchange stability, to maintain orderly exchange arrangements among members, and to avoid competitive exchange depreciation.

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Brand loyalty can be created by: a. minimal advertising. b. not using patents to protect products. c. cutting the costs for rese
vesna_86 [32]

Answer:

Option d is the correct option.

Explanation:

All other options creates less awareness and uniqueness of the products, whereas emphasising on better quality of products creates brand recognition and this higher brand recognition creates greater brand loyalty.

For creation of brand loyalty, we have to offer our customers something extra that our competitors are unable to deliver.

7 0
3 years ago
Read 2 more answers
When firms are said to be price takers, it implies that if a firm raises its price: a. buyers will go elsewhere. b. buyers will
MatroZZZ [7]

Answer:

The correct answer is a. buyers will go elsewhere.

Explanation:

This situation occurs when there is competition, that is, other businesses that offer the same or similar products as those of a particular company. In this scenario, the potential buyer will notice the difference according to their previous experiences and will find a way to acquire products from another brand that offer the same satisfaction as the product that rose in price. You must be very cautious with this practice, since it can end up damaging the operation, and in the worst case, leading to bankruptcy.

3 0
3 years ago
A firm's cost of equity is 22%. Its before-tax cost of debt is 13% and its marginal tax rate is 21%. The firm's capital structur
alisha [4.7K]

Answer:

WACC= 17.95%

Explanation:

Weighted average cost of capital is the average cost of all of the long-term types of finance used by a company weighted according to the that amount of finance used in relation to the total pool of fund.

It is calculated using the formula below:

WACC = (We×Ke)  +  (Wd×Kd)

Ke-cost of equity- 22%

We- equity weight- 100% - 45% = 55%

Kd-After tax cost of debt-10.3%

Wd- 45%

After tax cost of debt = Before tax ×× (1- tax rate)

After tax cost of debt = 13%× (1-0.21) = 10.3%

Cost of equity = 22%

WACC =(0.55× 22%) + (0.45× 13%)=17.95%

WACC= 17.95%

4 0
3 years ago
Research has found that employees whose managers participated in leadership training programs reported ________ afterwards.
Allushta [10]

Research has found that employees whose managers participated in leadership training programs reported higher levels of organizational commitment afterwards.

<h3>Why is leadership development crucial for a company?</h3>

Managers and leaders are often encouraged through leadership skills training to: Discover fresh, creative approaches to managing and developing people.create fresh business chances.

Take on the bigger socioeconomic problems they are facing.

<h3>How might leadership abilities enhance work performance?</h3>

Effective leaders are ready to encourage their team, handle and assign tasks, hear criticism, and have the pliability to address issues in a workplace that is always evolving.

These are the qualities that hiring managers search for in candidates for leadership positions.

Learn more about leadership:

brainly.com/question/1232764

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5 0
1 year ago
Which of the following are benefits of international trade?
AURORKA [14]

Answer:

Please find the detailed answer as follows:

Explanation:

International trade provides many benefits:

1. Technology differences, some countries are capital intensive and some are labor intensive. So the countries produce the good according to their intensivity. And export and import take place which is beneficial for the countries.

2.differentiated products.

When trade take place between the countries, then all the opportunity to consume different products. And countries produce their goods according to their labor and capital ratio and produce different variety of goods.

3.Specialisation in production

Countries specialise in the goods in which they have a comparative advantage.

3 0
3 years ago
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