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olya-2409 [2.1K]
3 years ago
5

Your book describes the increase in the money supply as being analogous to giving people more money. If the output of goods and

services is not growing at a similar rate, inflation will eventually occur. According to PPP Theory, what will happen to the U.S. dollar? Why? Explain your answer in a well-constructed and persuasive manner.
Business
1 answer:
SOVA2 [1]3 years ago
4 0

Answer:

<em>Purchasing power parity (PPP): </em>The principle suggests that if the purchasing powers are the same in two different countries, their exchange rates would be in equilibrium.

<em>Happening:</em> When inflation occurs in the US and it occurs more rapidly than in other nations, the currency, the dollar, will be less attractive to other nations. This means that the dollar's exchange rate with the currency of another nation will increase.

Explanation:

Suppose the rate of exchange between pound and dollar is 1 pound= 1.5 dollar before inflation. When inflation happens it may be 1 pound= 2 dollars.

If it has greater buying power, the currency will be demanded more. The US dollar was more requested before inflation, as 1 pound is spent on buying just $1.5. When inflation occurs, the dollar's buying power goes down and it gets less needed. 1 pound is already being spent on that time but to buy more dollars, 2 dollars.

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5 0
3 years ago
Samuel's full retirement age is 65 years old and his monthly benefit at that age is $1,000. According to the Social Security Adm
Marina86 [1]

Answer:

Assuming that Samuel's retiring age is exactly 65 years old, and he starts collecting benefits 24 months before his full retirement age (exactly on his birthday number 63), then he will receive $867 per month (or 86.7% of his full benefits).

This calculation varies depending on the number of months, e.g.

months before full retirement age                   % of full retirement benefit

24                                                                     86.7%

23                                                                      87.2%

22                                                                      87.8%

21                                                                      88.3%

20                                                                      88.9%

19                                                                      89.4%

18                                                                      90.0%

17                                                                      90.6%

16                                                                      91.1%

15                                                                      91.7%

14                                                                      92.2%

13                                                                      92.8%

8 0
3 years ago
Tidewater Company uses the product coot concept of applying the cost-plus approach to product priding The cost and expenses of r
kkurt [141]

Answer:

The desired profit from the sale and production of K is 10% of invested amount=10%*$1285000

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cost per unit =$18.68

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cost per unit remains=$18.68

Profit per unit =$2,57

markup %=2.57/18.68=13.76%

Selling price =cost+mark up

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Explanation:

I have attached an excel file for further understanding on the formulas used above,please check out the file in order to gain  better insights into the exercise.

Download xlsx
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Answer:

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