1answer.
Ask question
Login Signup
Ask question
All categories
  • English
  • Mathematics
  • Social Studies
  • Business
  • History
  • Health
  • Geography
  • Biology
  • Physics
  • Chemistry
  • Computers and Technology
  • Arts
  • World Languages
  • Spanish
  • French
  • German
  • Advanced Placement (AP)
  • SAT
  • Medicine
  • Law
  • Engineering
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.

You might be interested in
Behavioral economist Richard Thaler has studied several examples of how businesses make use of inconsistencies in consumer​ deci
KATRIN_1 [288]

Answer:

The correct answer is: An example of businesses taking advantage of inconsistencies in consumer​ decision-making is credit card companies not allowing stores to charge a fee to consumers if they pay with a credit card but allowing stores to provide a discount to consumers if they pay in cash

Explanation:

The purchase decision process is the decision-making process used by consumers regarding market transactions before, during and after the purchase of a good or service. It can be seen as a particular form of a cost-benefit analysis in the presence of multiple alternatives.

5 0
4 years ago
Pasadena Candle Inc. budgeted production of 715,000 candles for the January. Wax is required to produce a candle. Assume 10 ounc
Anna [14]

Answer:

Purchases Quantity = 441075 pounds

Purchases Value = $926257.5

Explanation:

To calculate the quantity and value of the purchases of direct material for the month of January, we first need to determine the quantity of direct material needed for production in January and adjust it with the opening inventory of direct material and the desired closing inventory.

To produce 715000 candles, the wax needed (in pounds) = 715000 * 10/16

To produce 715000 candles, the wax needed (in pounds) = 446875 pounds

The purchases for wax in pounds for January should be,

Consumption = Opening Inventory + Purchases - Closing Inventory

446875 = 18600 + Purchases - 12800

446875 + 12800 - 18600 = Purchases

Purchases = 441075 pounds

The value of Purchases will be = 441075 * 2.1  = $926257.5

6 0
3 years ago
A portfolio with a 21% standard deviation generated a return of 16% last year when T-bills were paying 5.5%. This portfolio had
EleoNora [17]

Answer:

0.5

Explanation:

A portfolio has 21% standard deviation

The return is 16%

T-bills were paying 5.5%

Therefore the Sharpe ratio can be calculated as follows

= 16-5.5/21

= 10.5/21

= 0.5

Hence the Sharpe ratio is 0.5

6 0
3 years ago
Which of these companies is demonstrating a first-mover advantage? The level of satisfaction Simon experienced when dining at th
Rainbow [258]

Answer:

Tide-All Inc. has more than 50 percent market share in the telecom industry, because no other company has invested in thisindustry before Tide-All Inc.

Explanation:

In marketing, first-mover advantage can be regarded as competitive advantage which is gained by initial significant occupant of particular segment of the market. first-mover advantage can also be regarded as ability of a firm to be better off compare with it's competitors due to the fact that it is the first to market new product category. For instance, Tide-All Inc. has more than 50 percent market share in the telecom industry, because no other company has invested in thisindustry before Tide-All Inc.

8 0
3 years ago
Two qualities that a good ___________ should have are to be persistent and not accept rejection.
worty [1.4K]
I say C makes the most since in the sentence
4 0
2 years ago
Other questions:
  • What is the process of getting a product to a consumer? A. Research B. Distribution C. Wholesale D. Subcontracting
    14·2 answers
  • Bj can overhaul a​ boat's diesel inboard engine in 15 hours. his apprentice takes 30 hours to do the same job. how long would it
    10·1 answer
  • Ramen noodles bought by college students are an example what types of goods?
    12·1 answer
  • Exhibit 9-1 Refer to Exhibit 9-1. If the economy is self-regulating, the price level is:_________.
    11·1 answer
  • Match each scenario with the source of monopoly market power.
    10·1 answer
  • Secondary data consist of ________. Group of answer choices information collected for the specific purpose at hand data that doe
    11·1 answer
  • Kevin Morales invests $15,451.93 now for a series of $2,900 annual returns beginning one year from now. Kevin will earn a return
    8·1 answer
  • -WILL GIVE BRAINLIEST-
    15·1 answer
  • A manufacturer who want to encourage repeat purchases and offer the consumer an immediate reward might consider what type of pro
    7·1 answer
  • The board of directors authorizes a cash or distribution of cash to its investors.a. Trueb. False
    8·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!