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Nata [24]
4 years ago
11

Is overshooting (in theory and in practice) consistent with purchasing power parity? Consider the reasons for the usefulness of

PPP in the short run versus the long run and the assumption we’ve used in the asset approach (in the short run versus the long run). How does overshooting help to resolve the empirical behavior of exchange rates in the short run versus the long run?
Business
1 answer:
Ludmilka [50]4 years ago
6 0

Answer:

1. Yes, overshooting is consistent with PPP. Investors forecast the expected exchange rate based on the theory of PPP. When there is some change in the market, the investors know the exchange rate will change to equate relative prices in the long run. This is why we observe overshooting in the short run. The investors incorporate this information into their short-run forecasts.

2. Exchange rates are volatile in the short run. The theory's implication that there is exchange rate overshooting (in response to permanent shocks) is one explanation for short-run volatility in

exchange rates.

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While similar in some respects, the key difference between panel data and pooled cross-sectional data is that panel data consist
elixir [45]

Answer:Yes

Explanation:

Pooled data occur when there is a time series of different cross sections with each observations not necessarily from the same unit while Panel data is sample from the same units. The main difference between them is the "units". The units can be countries, households, schools or other things we are collating data on.

In pooled cross section, random samples from different time periods and from different units are taken e.g. we can take data on number of females and males in schools A, B and C in 2020 and schools X, Y and Z in 2023.

In pure panel data, we are using the same units e.g we can take data on genders in schools A, B and C in 2020 and collect data from the same schools in 2023. Therefore the main difference is just the units we observe.

5 0
3 years ago
If a consumer withdraws money from his deposits at the bank (banking leakage), then the monetary base and money supply Group of
Maurinko [17]

Answer:

The correct option is A. will go down.

Explanation:

Note: This question is not complete as the answer choices are omitted. The complete question is therefore provided before answering the question as follows:

If a consumer withdraws money from his deposits at the bank (banking leakage), then the monetary base and money supply

Group of answer choices

A. will go down

B. monetary base will go up and money supply will go down

C. will go up.

D. will remain unchanged

The explanation of the answer is now provided as follows:

The monetary base (or M0) is the total amount of a currency that is either in general circulation or retained in the central bank's reserves in the form of commercial bank deposits.

Money supply a country's entire amount of money in circulation or in existence.

Since each money supply and monetary base has an element of money in circulation, both the monetary base and money supply will go down if a consumer withdraws money from his deposits at the bank (banking leakage).

Therefore, the correct option is A. will go down.

7 0
3 years ago
Adie wants to take some online classes this semester. She is willing to pay $1,000 for the first class, $800 for the second, $70
erastovalidia [21]

Answer:

As the class cost $750 Adie will only take one class because she is not willing to pay $750 for the second, third or fourth class. Also because she is willing to pay $800 for the first class her consumer surplus will be $50(800-750)

Explanation:

5 0
3 years ago
Which is an advantage corporations enjoy over partnerships?
Trava [24]
<span>The owners of a corporation don't have to work together to make all of the business decisions.

</span>An advantage of corporations enjoy over partnerships is that the owners of a corporation don't have to work together to make all of the business decisions, while this is true for partnership. Partnership<span> generally has more money to invest in starting or expanding a business.</span>
3 0
4 years ago
Help please!!!
joja [24]

Answer: It's possible. Act equally. Limited Partnership Certificate change. It depends on the contract. It can be registered as a corporation immediately.

Explanation:

  • It is possible if one party notices the severity of the termination of the mutual partnership agreement. If agents or representatives of companies in their reports convey such experiences to the competent authorities, this process can be initiated. If a party invests a certain amount of money in a joint venture, and it turns out that a business associate does not have serious business intentions, then court proceedings can also be initiated. Two or more parties sign certain documents before the start of the business, and the company can be canceled following the law.
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  • If such a situation arises, a change in the limited partnership certificate should be filed with the Secretary of State strictly at the point of formation of the partnership. If one of the two partners leaves the job or collaboration and allows the other to continue the situation, the departing partner is entitled to the allowance.
  • If a party offers some compensation to another, then something like that is possible. This is valid from the agreement between the two parties. The partnership is formed by laws determined by the state and cannot go beyond these. However, potential partners were left with the possibility of negotiating and business maneuvering in this direction.
  • By submitting valid documentation to a management agency, if you are starting your business, it can be registered as a corporation immediately. Of course, such a thing is only possible with the adaptation of the required documentation ordered by the state. So it does not matter the size of the firm for the business to be registered as a corporation.
8 0
4 years ago
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