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
iVinArrow [24]
3 years ago
14

4. True, False or Uncertain. For each of the following statements determine if the statement is TRUE, FALSE, or UNCERTAIN. You m

ust justify your answer either graphically or in words. No credit will be given without an explanation. a. "An increase in the nominal exchange rate (e) will cause the IS* curve to shift to the right." b. "If the value of the currency is reduced via a devaluation in a fixed exchange rate regime, then income will rise, but net exports will remain unchanged." c. "A raising of credit card transaction fees (which causes an increase in the demand for money) will lead to a recession according to the IS-LM model." d. "If Congress cuts government spending in order to reduce the budget deficit, the Federal Reserve can keep the economy from falling into a recession by conducting an open market sale
Business
1 answer:
Montano1993 [528]3 years ago
4 0

Question:

4. True, False or Uncertain. For each of the following statements determine if the statement is TRUE, FALSE, or UNCERTAIN. You must justify your answer either graphically or in words. No credit will be given without an explanation.

A. "An increase in the nominal exchange rate (e) will cause the IS* curve to shift to the right."

B. "If the value of the currency is reduced via a devaluation in a fixed exchange rate regime, then income will rise, but net exports will remain unchanged."

C. "A raising of credit card transaction fees (which causes an increase in the demand for money) will lead to a recession according to the IS-LM model."

D. "If Congress cuts government spending in order to reduce the budget deficit, the Federal Reserve can keep the economy from falling into a recession by conducting an open market sale

<u>Answer to A is True</u>

This explanation will require the following model which has the following components:

This model uses the following variables:

<em>Y</em> is real GDP

<em>G</em> is real government spending (an exogenous variable)

<em>T</em> is real taxes levied

<em>NX</em> is real net exports

<em>M</em> is the exogenous nominal money supply

<em>P</em> is the exogenous price level

<em>i</em> is the nominal interest rate

<em>L</em> is liquidity preference (real money demand)

<em>C</em> is real consumption

<em>I</em> is real physical investment, including intended inventory investment

Explanation:

Higher disposable income or a lower real interest rate (nominal interest rate minus expected inflation) leads to higher consumption spending.

Higher disposable income is created when there is an increase in salaries.

Lower interest rate happens when intentionally the Central Bank decides to resuscitate  the economy or prevent the economy from sliding into a recession. Either way, the IS curve which comprises Consumption and Investment spending shifts to the right.

The components of the IS* Curve are given below:

C=C(Y-T(Y),i-E(\pi ))\,

{\displaystyle I=I(i-E(\pi ),Y_{t-1})\,}

Where <em>E(π) equals the inflation rate expected.</em>

<u></u>

<u>Answer to B is </u><u><em>False</em></u>

The Mundell – Fleming model was used to demonstrate that an economy can not sustain a fixed exchange rate, free movement of capital and an independent monetary policy at the same time. Only two of the three can be maintained by an economy at the same time. This concept is also called the "<em>impossible trinity."</em>

<em />

<em>Devaluation</em> is a method used by monetary authorities to improve the balance of trade in the country by improving exports at moments when the trade deficit can become an economic issue.

<u>Answer to C is </u><em><u>False</u></em>

Increase in card transaction fees will does not decrease the demand for money or it decreases the demand for <u>credit</u>. It has no way of creating a recession since demand for money is not affected directly.

<u>Answer to D is </u><em><u>True</u></em>

When expenses surpass revenue and suggest a country's financial safety, a budget deficit occurs. This form of spending is usually characterised by heavy importation especially by the government. So on one hand, the government can <em>truly </em> can cut back on expenses to reduce the deficit.

On another hand, the government can conduction an open market sale to prevent the economy from falling into recession. An Open Market refers to the buying and selling of government bonds by the Federal reserve.

If a bank buys a government bond from the Federal Reserve, the bank acquires capital that it can lend out. The supply of money is expected to increase. Buying on an free market brings money into the economy.

This increase can be balanced by slamming high tax rates on importation or outrightly prohibiting them. That way, money is circulated internally and there is a push pressure on exports which gradually, along with a shift in the Investment and Consumption curves bring about a turn around in the economy.

Cheers!

You might be interested in
HELPPPKDDKKD
hram777 [196]

Answer:

A. Consumers will be more likely to buy luxury goods in foreign markets.

4 0
2 years ago
Read 2 more answers
Prepare a journal entry for the purchase of office equipment on February 19 for $31,700, paying $7,600 cash and the remainder on
Pani-rosa [81]

Answer:

Dr Office equipment 31,700

Cr cash 7,600

Cr Accounts payable 24,100

Explanation:

Preparation of the journal entry for the purchase of office equipment on February 19

Based on the information given the if asset was purchased on February 19 for the amount of $31,700 in which the company paid the amount of $7,600 cash and the remainder on account which means that the journal entry will be:

February 19

Dr Office equipment 31,700

Cr cash 7,600

Cr Accounts payable 24,100

(31,700-7,600)

8 0
3 years ago
Five hundred units of good x are currently bought and sold. The marginal buyer is willing to pay $40 for the 500th unit, and the
dimaraw [331]

Answer:

D : All options are correct

Explanation:

- The marginal buyer is the essence of demand curve while marginal seller is essence of supply curve.

- @ Q = 500 units,    Selling Price is set at SP = $35

- @ Q = 500 units,    Buying Price is set at BP = $40

- Since, SP ≠ BP our equilibrium price would be $ 37.5 assuming the price elasticity of demand and supply are equal. In any case the equilibrium price would lie in between [ 35 , 40 ] such that to prevent a shortage of units in near future.

- Moreover, if the seller decides to sell at price $35 then he must sell goods greater than 500 units to reach the equilibrium profits. However, it could also lead to excess of units or surplus.

- We see that from selling the goods at SP = $35 while the buyer is willing to pay BP = $40 for 500 goods, the seller would be under-profiting and would be earning $5*500 = $2,500 less than he would at equilibrium price of $40 and selling units greater than 500. Hence, 500 goods is not an efficient quantity of goods.

6 0
3 years ago
Craig is a salesperson for an industrial equipment company. Craig calls on factories and spends most of his time talking with eq
julsineya [31]

Answer:

Identify managers and people with authority to decide the purchase.

Explanation:

When you work with an opportunity to sell an important part of your work, to be able to advance until closing, it is to be able to interview the person or people with the power to decide the purchase.

If you discover during your first interviews that the person with whom you initially contacted does not have the authority or influence over the purchase decision, then you need this person to promote your access to the person with the true power to decide. In many cases this is very easy to achieve, but in other cases, you will need to negotiate access to the sphere of power. The most powerful tool at your disposal to negotiate this access is to have created a vision of the solution to your problems in the mind of your interlocutor. Once you have created a vision of the solution, we can say that this person already has a clear idea about how to solve their problems and improve the current situation of the company. You must become a promoter of your solution within your company and serve as an engine to promote your offer in front of the decision group.

5 0
3 years ago
White Tiger Electronics produces CD players using an automated assembly line process. The standard cost of CD players is ​$148 p
Stolb23 [73]

Answer:

A) a 23.5% decrease in materials

B) a 64% decrease in labor costs

C) a 29.1% decrease in overhead

Explanation:

White Tiger's multifactor productivity = $300 / $148 = 2.027

if we want to increase the multifactor productivity by 12%, it will = 2.27

since we will not change the sales price, we must determine the new total cost:

$300 / cost = 2.27

cost = $300 / 2.27 = $132.16 ≈ $132, which represents a $16 decrease

A) materials ⇒ $16/$68 = 23.5%

B) labor costs ⇒ $16/$25 = 64%

C) overhead ⇒ $16/$55 = 29.1%

4 0
3 years ago
Other questions:
  • A student wanted 20.000g of a salt. which balance should the student use in order to obtain the most accurate quantity: a platfo
    11·2 answers
  • Wes Motors has total assets of $98,300, net working capital of $11,300, owners' equity of $41,600, and long-term debt of $38,600
    14·1 answer
  • A(n) ________ represents a condensed version of the registration statement that enables prospective investors to evaluate a stoc
    9·2 answers
  • Selected information from Large Corporation's accounting records and financial statements for 2013 is as follows ($ in millions)
    14·1 answer
  • Which of the following is an outcome of the General Agreement on Tariffs and Trades​ (GATT) and created global rules of trade be
    11·1 answer
  • In 2019, Alliant Corporation acquired Centerpoint Inc. for $548 million, of which $98 million was allocated to goodwill. At the
    12·1 answer
  • Closing entries:
    5·2 answers
  • otal asset turnover 2.6 Profit margin 6.6 % Equity multiplier 1.5 Payout ratio 25 % What is the sustainable growth rate?
    11·1 answer
  • The Baldwin Company has just purchased $40,900,000 of plant and equipment that has an estimated useful life of 15 years. The exp
    10·1 answer
  • A factory can produce cars and trucks. If the price of cars increases, then the supply of trucks will
    5·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!