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3 years ago

If interest rates increase from 8% to 9½%, we would expect to see an

Business

1 answer:

____ [38]3 years ago

6 0

Answer:

a decrease in the demand for money

Explanation:

As the money is now more expensive because, holding cash in hand means not capitalize with the interest, the agents (families and business) will try to not have liquid money but, invest to achieve the better yields.

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Consider the following data on the factor endowments of two countries, A and B: Labor Force (millions of workers) 45 20Capital S

Alexus [3.1K]

Answer:

a. Country A

b. Country B

c. Country A

Explanation:

Given

For Country A

Labor force = 45 million = 45000000

Capital Stock = 15 thousand= 15000

For Country B

Labor Force = 20 million = 20000000

Capital Stock = 10 thousand = 10000

a. Which country is relatively capital abundant

A country is capital abundant if its endowment of capital relative to other factors is large compared to other countries.

We calculate the capital/labor ratio for each country.

For A, Ratio = 45000000÷15000 = 3000

For B, Ratio = 20000000÷10000= 2000

The Ratio of country A is greater than B.

So, A is capital redundant.

b. Which country is relatively labor abundant

A country is labour abundant if its endowment of labour relative to other factors is large compared to other countries.

We calculate the labor/capital ratio for each country

For A, Ratio = 15000÷45000000 = 0.000333

For B, Ratio = 10000÷20000000 = 0.0005

The Ratio of country B js greater than A

So, B is capital redundant.

c. Suppose that good S is capital intensive relative to good T. Which country will have comparative advantage in the production of S?

Heckscher–Ohlin theorem in the two-factor case, it states: "A capital-abundant country will export the capital-intensive good, while the labor-abundant country will export the labor-intensive good"

So, if product S is capital intensive relative to T then country A will have more advantage in production of product T to aid their exportation.

4 0

3 years ago

Read 2 more answers

Peter Parker, the HR vice-president of a well-known IT firm, called his team members for a meeting to discuss the measures to be

NikAS [45]

Answer:

groupthink

Explanation:

In team discussions and debates, groupthink is a common phenomenon where team members tend to agree with others without a constructive discussion filled with arguments. It is very common when an authoritative person (manager) is leading the discourse of discussion.

In this example, the reached consensus is an example of groupthink, since the team members did not critically evaluate the troublesome issue.

8 0

3 years ago

To find the break-even point for a company that sells several products, the analyst must make an assumption about what the sales

leva [86]

Answer:

True because in the case if the the company is producing single product then the method is simple. If the company is making number of products we have to assume a sales mix to calculate breakeven point. Reaching breakeven point is not easy in multi products case. To calculate breakeven point we have to calculate weighted average contribution per unit to put the values in the following formula:

Breakeven point (units) = Fixed cost/ weighted average cost per unit

7 0

3 years ago

The current USD/euro exchange rate is 1.4000 dollar per euro. The six month forward exchange rate is 1.3950. The six month USD i

Zigmanuir [339]

Answer:

the six month euro interest rate is 1.36%

Explanation:

Spot exchange rate: 1.4 USD/ EUR

6 month forward rate: 1.3950 USD/EUR

Domestic interest rate: 1% pa

Foreign interest rate: the six month euro interest rate?

We have the formula:

Forward rates = Spot rate * (1+domestic interest rate)/(1+foreign interest rate)

⇔ 1.3950 = 1.4 *(1+1%)/(1+foreign interest rate)

⇔ 1+foreign interest rate = 1.4 *(1+1%)/1.3950

⇔foreign interest rate = 1.01362 - 1 = 0.01362

⇒ the six month euro interest rate is 1.36%

7 0

3 years ago

What is the expected annual capital gain yield for Orange Corp stock, based on the Constant Dividend Growth Model

lyudmila [28]

Complete Question:

What is the expected annual capital gain yield for Orange Corp stock, based on the Constant Dividend Growth Model? The company plans to pay an annual dividend of of $4.12 per share in one year. The expected annual growth rate of the dividend is 12.9%, and the required rate of return for the stock is 16.63%. Answer as a percentage, 2 decimal places (e.g., 12.34% as 12.34).

Answer:

12.9%

Explanation:

As we know that:

Capital Gain Yield = (P1 - P0) / P0

Step 1: Find P0

Po = D1 / (Ke - g)

Here

D1 is $4.12 per share

Ke is 16.63%

g is 12.9%

By putting values, we have:

Po = $4.12 / (16.63% - 12.9%)

= $110.46

Step 2: Find P1

P1 = D2 / (Ke - g)

Here

D2 = D1 * (1 + 12.9%) = $4.12 per share * (1 + 12.9%) = $4.65

Ke is 16.63%

g is 12.9%

By putting values, we have:

Po = $4.65 / (16.63% - 12.9%)

= $124.70

<u>Step3: Find Annual Capital Gain Yield</u>

Capital Gain Yield = (P1 - P0) / P0

Now by putting values, we have:

Capital Gain Yield = ($124.7 - $110.46) / $110.46

= 12.9%

6 0

3 years ago