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strojnjashka [21]
3 years ago
6

Suppose in 1992, the average price level in Pacifica was 100, and that in Atlantica it was also 100. In the foreign exchange mar

ket 1 Pacifica pound was exchanged for 1 Atlantica mark. In 2012, the price level in Pacifica had risen to 280 and the price level in Atlantica had risen to 360. According to the relative purchasing power parity (PPP) theory, what should the pound-mark exchange rate be in 2012? If the actual pound per mark exchange rate is 0.5 pound/mark in 2012, is the mark overvalued or undervalued relative to its PPP value?
Business
1 answer:
wolverine [178]3 years ago
8 0

Answer:

a. 1 Pound/1.29 or 0.78 Pound/Mark

b. Overvalued

Explanation:

a. What should the pound-mark exchange rate be in 2012?

Ratio of Pacifica pound to Atlantica mark in 2012 = 360/280 = 1.29

Or,

Ratio of Atlantica mark to Pacifica pound in 2012 = 280/360 = 0.78

Therefore, according to the relative purchasing power parity (PPP) theory, one Pacifica pound should equal to 1.29 Atlantica mark, i.e. 1 Pound/1.29 Mark.

This can also be stated differently that 1  Atlantica mark should equal to 0.78 Pacifica pound, i.e. 0.78 Pound/Mark.

b. If the actual pound per mark exchange rate is 0.5 pound/mark in 2012, is the mark overvalued or undervalued relative to its PPP value

Since the PPP pound per mark exchange rate value estimated in a above is 0.78 Pound/ Mark is higher than the actual pound per mark exchange rate of 0.5 pound/mark in 2012, mark is therefore overvalued.

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suppose that a college physics experiment goes horribly wrong and releases an electronic pulse that renders all electronic equip
Ainat [17]

After the accident, the wages earned by Ohio workers will decrease because the marginal productivity of Ohio workers will decrease. Thus the correct answer is A.

<h3>What are wages?</h3>

Wages are referred to as payments received by daily workers. This payment is done on an hourly or daily basis to the blue-collar people who worked in factories or in construction sites.

The release of an electronic pulse in the city will decrease the wages earned by Ohio workers as marginal productivity of workers will decrease due to limited demand and negative impact on employees.

Therefore, option A is appropriate.

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6 0
1 year ago
Which of the following is a correct description of the crowding-out effect of deficit spending?
borishaifa [10]

Answer:

the options are missing, so I looked for them:

a. The buying of government bonds leads to lower interest rates, thereby reducing private investment.

b. The selling of government bonds leads to higher interest rates, thereby reducing private investment.

c. The selling of government bonds leads to lower interest rates, thereby reducing private investment.

d. The buying of government bonds leads to higher interest rates, thereby reducing private investment.

the answer is:

b. The selling of government bonds leads to higher interest rates, thereby reducing private investment.

Explanation:

The crowding out effect happens when the government increases its spending level in order to engage in an expansionary fiscal policy but someone needs to pay for this extra spending. In order for the government to finance their spending, they have to choose to either increase taxes or issue more debt. When they issue more debt, they end up decreasing private investment since money that could be used by private companies is used by the government instead.  

5 0
3 years ago
A manufacturer estimates that its product can be produced at a total cost of C(x) = 50,000 + 100x + x3 dollars. If the manufactu
timofeeve [1]

Answer:

The level of production x that will maximize the profit is: 22,966

Explanation:

C(x) = 50,000 + 100x + x³

R(x) = 3400x

P(x) = R(x) - C(x)

      = 3400x - [50,000 + 100x + x³]

      = 3400x - 50,000 - 100x - x³

      = 3300x - 50,000 - x³   .................... (A)

P'(x) = 3300(1) - 0 - 3x²

       = 3300 - 3x²

At a critical point, P'(x) = 0

∴   0 = 3300 - 3x²

  3x² = 3300

    x² = 1100

     x = ± \sqrt{1100}

P"(x) = -6x

P(\sqrt{1100}) = -6 (\sqrt{1100})   < 0

by second derivative, 'P' max at    x = \sqrt{1100} = 33.17 (rounds)

since x =  \sqrt{1100} ,

recall that P(x) = 3300x - 50,000 - x³ from equation (A)

Therefore, Maximum Profit

P(\sqrt{1100}) = 3300\sqrt{1100} - 50000 - \sqrt{1100} ^{3}

              = 3300(33.17) - 50,000 - 33.17³

              = 109461 -50,000 - 36495.26

              = 22,965.74

Maximum profit is 22,966 to the nearest whole number

5 0
3 years ago
As of December 31, the Stanford company has the following information. Use this information to answer questions 1 to 3.
Luba_88 [7]
It would determine that the answer is 50k
8 0
3 years ago
Walters Corporation sells radios for $50 per unit. The fixed costs are $525,000 and the variable costs are 60% of the selling pr
anyanavicka [17]

Answer:

26,000 units  

Explanation:

The computation of the new break even point in units is shown below:

= (Fixed expenses ) ÷ (Contribution margin per unit)  

where,  

Fixed cost = $525,000 + $125,000 = $650,000

Contribution margin per unit = Selling price per unit - Variable expense per unit

= $50 - $25

= $25

So, the break even point in units is

= $650,000 ÷ $25

= 26,000 units  

3 0
3 years ago
Read 2 more answers
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