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klemol [59]
3 years ago
5

In January 2012, one US dollar was worth 50 Indian rupees. Suppose that over the next year the value of the Indian rupee decreas

es to 60 Indian rupees to one US dollar. Suppose also that the price level of all goods and services in India, as measured in rupees, falls 20%, so that the Indian price index falls from a value of 100 to 80. At the same time, suppose that the US price level increases by 6%, to 106.
By what percentage did the value of the real exchange rate change over this period? Please give your answer to the nearest whole percentage point.
What will happen to the following as a result of the changes?
America's consumption of Indian goods and services will likely...
a)increase
b)decrease
c)stay the same
India's consumption of American goods and services will likely...
a)increase
b)decrease
c)stay the same
Business
1 answer:
satela [25.4K]3 years ago
3 0

Answer:

59% - a)increase - b)decrease

Explanation:

First of all, we should say that the real exchange rate is calculated by multiplying the nominal exchange rate for the price index and then divide it by the price index of the other country. In another language, using this case as the example, the first nominal exchange rate is 50, as you need 50 rupees to buy 1 dollar. So to calculate the real exchange rate you need to multiply 50 by 100 (the price index of USA) and then divide it by 100 (the price index of India). Note that both price indexes are 100, just a coincidence for making easier the question. Result: 50.

Then we calculate the next real exchange rate: multiply 60 (the new nominal exchange rate) by 106 (the new US price index) and divide by 80 (the new India price index). This throws a result of 79,5. We see a 29,5 increase, and 29,5 represents 59% of 50 (the initial real exchange rate).

Then both questions is more common sense than the reading of the results we just calculated. For example, nominal exchange rate changed from 50 to 60, so the people in India will now have to collect 10 more rupees to buy the same dollar. Let's suppose a pair of shoes in USA costs 40 dollars. Before, Indians needed 2000 rupees to buy it. Now they will need 2400 rupees... it will be more expensive. Plus, the prices of USA had gone up 6%, which means the pair of shoes will now cost 42,4 dollars... even more expensive! As products in USA are more expensive, we can expect that India's consumption of American goods will decrease (law of demand).

With the American consumption of Indian goods happens the opposite, the goods in India became cheaper (price index has fallen), and for the Americans, the same dollars they had will buy more rupees when the exchange rate changed to 60.

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Minarski Electronics sells computers and provides hardware maintenance services. On April 1st, Minarski sold a package deal cont
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Second step is to find the Percentage of computer

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Third step is to find the Percentage of maintenance

Percentage of maintenance = 216/1,200

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a $104,000 selling price with $24,000 down at 6.5% for 25 years results in a monthly payment of: multiple choice $545.61 $554.71
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The monthly payments, given the selling price, the down payment, and the rate is, D. $540.17

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First, find the loan amount:

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= 104, 000 - 24, 000

= $80, 000

The monthly payment is an annuity because it is constant. To find this annuity, find the monthly periodic rate and the number of monthly periods:

Monthly rate :

= 6.5% / 12

= 6.5%/12

The number of periods is:

= 25 x 12

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Then put this into an annuity calculator to find the monthly payment to be:

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1 year ago
On January 1, 2021, the Allegheny Corporation purchased equipment for $115,000. The estimated service life of the equipment is 1
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Answer:

1. $11,000 each year

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Explanation:

The calculation of the depreciation expense for the 2021 and 2022 is shown below:

1. Straight-line method:

= (Purchase value of equipment - estimated residual value) ÷ (estimated service life)

= ($115,000 - $5,000) ÷ (10 years)

= ($110,000) ÷ (10 years)  

= $11,000

In this method, the depreciation is same for all the remaining useful life  i.e for 2021 also the same depreciation is applied i.e $11,000

2. Double-declining balance method:

First we have to determine the depreciation rate which is

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Now the rate is double So, 20%

In year 1, the original cost is $115,000, so the depreciation is $23,000 after applying the 20% depreciation rate

And, in year 2, the $(115,000 - $23,000) × 20% = $18,400

3. Units-of-production method:

= (Purchase value of equipment - estimated residual value) ÷ (estimated production units)

= ($115,000 - $5,000) ÷ ($220,000 units)

= ($110,000) ÷ (220,000 units)  

= $0.5 per units

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= Production units in 2021 year × depreciation per unit

= 30,000 units × $0.5

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Now for the 2022, it would be  

= Production units in 2022 year × depreciation per unit

= 25,000 units × $0.5

= $12,500

4 0
3 years ago
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