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Karo-lina-s [1.5K]
3 years ago
12

22) One year ago the spot rate of U.S. dollars for Canadian dollars was $1/C$1. Since that time the rate of inflation in the U.S

. has been 4% greater than that in Canada. Based on the theory of Relative PPP, the current spot exchange rate of U.S. dollars for Canadian dollars should be approximately ________. A) $0.96/C$ B) $1/C$1 C) $1.04/C$1 D) relative PPP provides no guide for this type of question
Business
1 answer:
saw5 [17]3 years ago
6 0

Answer: C) $1.04/C$1

Explanation:

We define the inflation rate in a certain country as

  • a rate at which the value of a currency is falling
  • as a result the usual level of prices for goods and services keeps rising.

1 year ago the spot rate of U.S. dollars for Canadian dollars was $1/C$1.

That time inflation rate in US was 4% greater than in Canada.

So, the  current spot exchange rate of U.S. dollars for Canadian dollars :

($1 + 4% of $1)/C$1

=($1+$0.04)/ C$1

=$1.04 / C$1

Hence, the correct option is C) $1.04/C$1

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 The important of the transformational leadership style is that it give a clear vision and the direction to an organization and it also helps in influence the lower level part of the company.

 According to the given question, Luis is the team member and he regularity motivated his team member due to the transformational leadership style.  

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6 0
3 years ago
A different ethanol processing facility costs $800,000 to construct but will instead last forever.Every year (starting the year
iragen [17]

Answer:

r = 5%

Explanation:

Construction cost 800.000

# of barrels produced 10.000

Price per barrel $4

let the interest rate = r

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800000 = 10000 x 4/(1 + r) + 40000/(1 + r)2 + .......

800000 = 10000 x 4/r

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8 0
2 years ago
Select all that apply Benefits of small amounts of inflation include Multiple select question. more expansionary monetary policy
EleoNora [17]

Benefits of small amounts of inflation include more expansionary monetary policy, the placebo effect, and the facilitation of relative price changes.

<h3>What is meant by inflation?</h3>

Inflation is the term used to describe the rate of price rise for goods and services.

It is sometimes used to categorize inflation according to cost-push, demand-pull, and built-in factors.

The two most popular inflation measures are the Consumer Price Index and the Wholesale Price Index.

Inflation can be viewed favorably or badly depending on the perspective and rate of change.

Inflation may be advantageous for those who own tangible assets since it will raise the value of their holdings, such as real estate or goods that are kept in storage.

Inflation's primary causes include:

  • Consumer-driven inflation
  • Price-driven inflation
  • more money available
  • Devaluation
  • increasing pay
  • Regulations and policies

Benefits of Inflation: In order to meet increasing demand, production must increase. Additionally, debtors benefit from inflation because they can return their loans with funds that are less valuable than the funds they borrowed. This promotes borrowing and lending, which boosts expenditure on all levels once more.

To know more about inflation refer to:  brainly.com/question/15692461

#SPJ4

6 0
1 year ago
A​ firm's marginal product of labor is 4 and its marginal product of capital is 5. If the firm adds one unit of labor but does n
marissa [1.9K]

Answer: C. use 0.8 fewer units of capital.

Explanation:

The Marginal Rate of Technical Substitution (MRTS) shows how much you can decrease capital or labor by in order to keep production constant if you increase either capital or labor.

It is calculated by the formula:

= Marginal product of labor  / Marginal product of capital

= 4 / 5

= 0.8

<em>The firm should use 0.8 fewer units of capital in order to maintain the same production level. </em>

7 0
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