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Nata [24]
3 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]3 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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Explanation:

A. Poor quality inventory will not be sold leading to excess of it thus it is a reason.

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3 years ago
Aram has plans on going to Georgia Tech to study Biomedical Engineering. Which of the following is he MOST LIKELY attempting to
lesantik [10]

Answer:

The answer is D. a higher of standard of living.

Explanation:

4 0
3 years ago
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sergeinik [125]

Answer:

2.072 rights

Explanation:

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stock outstanding = 540,000

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subscription price = $33 a share

Now,

Number shares to be issued = ( Amount needed ) ÷ ( subscription price )

= $8,600,000 ÷ $33

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3 0
3 years ago
You have a small business that makes $50,000 accounting and economic profit for you. As a disabled person, you must work at home
kifflom [539]

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The accounting benefit is nothing more than the difference between income and cost.  In this case it is still $50000.

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5 0
3 years ago
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sertanlavr [38]

Answer:

1. Total Annual Cash Inflows = 5000

2. Discount Factor = 3.72

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Answer:

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3.  What is the new machine’s internal rate of return?

Answer:

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<em>Note:</em> the question is incomplete and it lacks essential data to be used in part 4. without the exhibits mentioned in the questions. It is impossible to solve further.

7 0
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