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Black_prince [1.1K]
3 years ago
10

If the price of walnuts rises, many people would switch from consuming walnuts to consuming pecans. But if the price of salt ris

es, people would have difficulty purchasing something to use in its place. These examples illustrate the importance of a. the availability of close substitutes in determining the price elasticity of demand. b. a necessity versus a luxury in determining the price elasticity of demand. c. the definition of a market in determining the price elasticity of demand. d. the time horizon in determining the price elasticity of demand.
Business
1 answer:
lilavasa [31]3 years ago
4 0

Answer:

b

Explanation:

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​a(n) _____ operation does not start processing or assembling products until it receives a customer order.
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The amount of the check is written in how many places?
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In numerical form on the left and written out on amount line
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When workers are able to augment their stock of human capital, they can expect to?
ankoles [38]

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3 0
1 year ago
Suppose that the spot price of the euro is currently $1.30. The 1-year futures price is $1.35. Is the interest rate higher in th
valkas [14]

Answer:

The interest rate is higher in the US.

Explanation:

The forward price is calculated using the following formula,

F= S ( 1+Rd / 1+Rf)^t

where,

  • F = Forward rate
  • S = Spot rate
  • Rd = Nominal interest rate in domestic market
  • Rf = Nominal interest rate in foreign market
  • t = time in years

We consider that the domestic market is the US and the domestic currency is the USD. Thus, it is a direct quote where 1 EUR = 1.3 USD

The forward price ER is more than the Sport ER only when the interest rate in domestic market is more than the interest rate in foreign market and as a result, the value of domestic currency against a foreign currency in the forward market depreciates.

We can see this by the following example,

Say Spot rate is $1.3 per 1 EUR and the interest rate in US is 10% while that in Euro zone is 5%. When we calculate the forward ER we will see that 1 EUR will buy us more USD in forward (more than 1.3 USD)

F= 1.3 * (1.1 / 1.05)^1   => $1.362 PER 1EUR

3 0
3 years ago
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