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Anna007 [38]
3 years ago
10

Economic expansion throughout the rest of the world raises the world interest rate. Use the Mundell–Fleming model to illustrate

graphically the impact of an increase in the world interest rate on the exchange rate and level of output in a small open economy with a floating-exchange- rate system.
Be sure to label: i. the axes; ii. the curves; iii. the initial equilibrium levels; iv. the direction the curves shift; and v. the new short-run equilibrium.

Business
1 answer:
Kobotan [32]3 years ago
5 0

Answer: The answer is provided below

Explanation:

The fiscal expansion in the rest of the world will lead to an increase in the world interest rate and a decrease in the domestic investment.

As a result, a rise in the world interest rate will lead to an increase in the national income and also lower the nominal exchange rate.

The diagram has been attached.

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Crazy boy [7]

Answer:

They should make sure it's not like someone else's?

Explanation:

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8 0
2 years ago
Parks Corporation is considering an investment proposal in which a working capital investment of $10,000 would be required. The
Virty [35]

Answer:

$4,355.26  

Explanation:

The net present value is the present value of future cash flows expected from the project minus the initial investment outlay

initial investment outlay=working capital investment = -$10,000

Years 1-5 cash inflow=$2,000

Year 6 cash inflow=normal cash inflows+release of working capital

Year 6 cash inflow=$2,000+$10,000=$12,000

the present value of a future cash flow=cash flow/(1+r)^n

n is 1 for year cash inflow 2 for year 2 cash inflow, 3 for year 3 cash inflow and so on

NPV=-$10,000+$2,000/(1+10%)^1+$2,000/(1+10%)^2+$2,000/(1+10%)^3+$2,000/(1+10%)^4+$2,000/(1+10%)^5+$12,000/(1+10%)^6

NPV=$4,355.26  

5 0
3 years ago
Pablo has purchased several items from a gadget store. As the storekeeper bills the items, Pablo realizes that he does not have
Sergeu [11.5K]

Options:

A. Debit card

B. Loyalty card

C. Fleet card

D. Credit card

Answer: D. Credit card

Explanation: A credit card is an electronic payment system which uses cards that are linked to a bank account, this card allows you to make purchases online in order to pay later.

A credit card allows its holders to borrow money from financial institutions with the aim of not exceeding the Financial limits. Financial limits are determined by the issuers of the card based on a person's credit history and amount of minimum savings which are expected.

5 0
3 years ago
If a utility company were considering an increase in electricity or gas prices in order to cover the costs of a capital investme
Firlakuza [10]

Question:

If an utility company were considering an increase in electricity or gas prices in order to cover the costs of a capital investment, this sector would result in the smallest change in quantity demanded in the long run and thus higher profits. True or false?

Answer:

The answer is True.

Explanation:

Change in the demand for gasoline and or electricity is primarily set by the number of industrial or bulk users.

Scarce goods are allocated though the help of prices. It is important to note that demand for gasoline or electricity is <u>more elastic in the long term</u>, so small changes in price will alter supply and demand in either direction in the shortrun.

The demand for gas or electricity are by nature <em><u>inelastic.</u></em> This means that when prices go up, demand goes down <em><u>but not by much.</u></em>

It means that in the short term, the individuals cannot alter their lifestyle immediately to adjust for the hike in prices.

To adjust they would have to probably purchase new devices which or cars which consume less gas or electricity.

The effect this has for the company on the overall is that they are able to achieve their aim of recouping their capital investments from the planned increase in price.

Cheers!

8 0
3 years ago
Henry and claudia can claim alyssa for which tax benefits
34kurt
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6 0
3 years ago
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