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3 years ago

There will be a lower equilibrium price and higher quantity if _____.

Business

1 answer:

77julia77 [94]3 years ago

3 0

Answer: A) supply increases and demand stays the same

Check out the diagram below. The curves S1 and D1 are the original supply and demand curves for some product. If we shift S1 to the right, we get some new curve S2. This is increasing supply. Keeping D1 the same means that the equilibrium price slides down and the quantity goes up.

In short, we have more stuff in the market, and each of those items is cheaper.

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Suppose in New York £/$ = 1, while in Tokyo ¥/$=2.5, but in London £/¥ = 0.50. (a) (2) Is there any profit that could be made wi

Dimas [21]

Answer:

(a) Yes, there is a profit by making triangular arbitrage action. Profit starting with selling ¥1,000,000 in London will be ¥250,000. Detailed description is in explanation part.

(b)

The dollar-pound exchange rate will change in the way that pound will be depreciated because there is more supply of pound in New York market following a arbitrageur action as they notice the profit-making opportunity.

Cross rates after arbitrageurs notice will be adjusted to the point where there is no arbitrage opportunity occurs. In (a) example, keeping other exchange rate unchanged, the dollar-pound exchange rate will be adjusted to £/$ = 1.25.

Explanation:

(a)

Investor sell ¥1,000,000 in London to get £500,000 ( exchange rate £/¥ = 0.50).

Further, he sells these £500,000 in New York to get $500,000 ( exchange rate £/$=2.5)

Next, they sell $500,000 to get ¥1,250,000 in Tokyo ( exchange rate ¥/$=2.5)

=> Net profit is ¥1,250,000 - ¥1,000,000 = ¥250,000

(b)

Details have already been explained in the answer part.

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3 years ago

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Ceteris paribus, in a closed economy, if consumers become more optimistic ________.

alexandr402 [8]

Ceteris paribus, in a closed economy, if consumers become more optimistic the equilibrium interest rate should increase .

So the answer is the equilibrium interest rate should increase

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3 years ago

Suppose a company earns a profit this year and has a dividend payout ratio of one half. What does this mean?

algol [13]

Answer:

Explanation:

The dividend payout ratio is the ratio of dividends paid to shareholders in proportion to net income

Payout ratio = dividends / net income

If dividend payout ratio of one half, it means that only half of net income is paid as dividends

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Bull’s weighted average cost of capital (WACC) be if it has to raise additional common equity capital by issuing new common stoc

hram777 [196]

Answer:

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3 years ago

The government tax for a sole proprietorships and a partnership is classified under

guapka [62]

Answer:

the answer is personal income

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2 years ago

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