Answer:
- there will be no adverse movement in exchange rates or interest rates.
Explanation:
John's best speculative element is that everything would remain in his favor; especially the exchange rates and there interest rates.
Assuming after his transaction there is a sudden negative or adverse effects on the interest rate from 6 percent to 1 percent for US deposit and a decline in the USD/Japanese Yen exchange rate he <u>would be faced with great loses.</u>
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Answer and Explanation:
Data provided
Depreciation = $185 million
The Journal entry is shown below:-
Depreciation expense $185 million
To Accumulated depreciation $185 million
(Being depreciation expenses is recorded)
Here we debited depreciation expense as expenses are increasing whereas we credited the accumulated depreciation as the assets decreasing.
Because of the wealth effect, a rising aggregate price level "reduces" the purchasing power of wealth and therefore "reduces" the aggregate quantity of output demanded.
<h3>What is wealth effect?</h3>
According to the wealth effect, a behavioural economic hypothesis, customers will spend more money even if their income stays the same.
The effect of wealth effect on aggregate demand is-
- People will increase their consumption as their wealth rises. Thus, at lower price levels compared to higher price levels, the consumption component of aggregate demand will be stronger.
- A person's desire for inexpensive fast food is likely to decline as their income rises, but their desire for more costly steak may increase.
To know more about the aggregate demand and aggregate supply, here
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<span>Money is not the only measure of success and not everything is transactional. A producer may choose to produce for many reasons. Among them, working with exceptional talent as well as gaining experience and getting street creds.</span>
