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Degger [83]
3 years ago
15

If inflation in the U.S. is projected at 3% annually for the next 5years and at 7% annually in Turkey for the same time period,

and Lira/Dollar spot rate (L/$) is currently equal to 5.6702 then the exact relative PPP value of the spot rate (L/$) five years from now is given by:
Business
1 answer:
GrogVix [38]3 years ago
5 0

Answer:

6.86011 Turkish liras per US dollar

Explanation:

US's inflation 3% for the next 3 years

Turkey's inflation 7% for the next 3 years

current Lira/Dollar spot rate (L/$) = 5.6702 (liras per dollar)

  • inflation rate US = (1 + 0.03)⁵ = 1.159274
  • inflation rate Turkey = (1 + 0.07)⁵ = 1.402552

difference = 1.402552 / 1.159274 = 1.20985 x current spot rate = 1.20985 x 5.6702 = 6.86011

Since the Turkish inflation rate is higher than the American inflation rate, then the Turkish lira will depreciate faster than the US dollar.

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Answer:

c. There are more unemployed resources.

Explanation:

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At equilibrium income level, aggregate expenditure is equal to aggregate output. The equilibrium equation can be written as Y = C+I+G+X-M where

Y = national income, I = investment expenditure of the firm, G = government expenditure on goods and services, X = export, M = import.

7 0
3 years ago
In the case of oligopolistic markets, self-interest makes cooperation difficult and it often leads to an undesirable outcome for
Tanya [424]

Answer: True

Explanation:

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This usually leads to an undesirable outcome. For instance, if two oligopolistic firms agree on a price to sell goods, one of them might decide to sell at a lower price in order to gain more market share. This will cause the other firm to reduce its prices as well which means that both companies would be worse off than when they started.

7 0
3 years ago
hich of the following is not a change in the audit report as a result of the new reporting standard (AS 3101)? a. Specific menti
Alex

Answer: d. A statement that the financial statements are the responsibility of the client's management

Explanation:

The new reporting standard (AS 3101) requires auditor's opinion on the financial statements to be moved to the first paragraph of the Audit report, Requires the Auditor to use section titles to identify and highlight important information, Requires an Auditor to provide a clear clarification that the audit scope includes notes to the financial statement, and also the Auditor is required to disclose the year they began serving consecutively as the company's auditors.

A statement that the financial statements are the responsibility of the client's management is NOT part of changes brought by AS 3101

5 0
2 years ago
A researcher is conducting an experiment in which one group of people is exposed to an advertisementand another group is exposed
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d. subjects

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Reference: Pelz, Bill, and Herkimer County Community College. “Research Methods for the Social Sciences.” Lumen, 2019

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3 years ago
AA Tours is comparing two capital structures to determine how to best finance its operations. The first option consists of all e
-Dominant- [34]

Answer:

d.select the unlevered option since the expected EBIT is less than the break-even level

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Unlevered option comprises of more equity than the  debt, and is thus less risky. While an option leveraged is even more debt than equity, which brings additional risk. Since the estimated EBIT is below the break-even point, it would be safer to go for an unlevered (less riskier) option.

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8 0
3 years ago
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