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3 years ago

What will happen when two countries trade based on comparative advantage?

Business

1 answer:

Dmitry_Shevchenko [17]3 years ago

3 0

Answer:

Explanation: Trade between two agents or countries allows the countries to enjoy a higher total output and level of consumption than what would have been possible domestically. ... Comparative advantage and opportunity costs determine the terms of trade for exchange under which mutually beneficial trade can occur.

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There is a flexible exchange rate system and only two countries in the world, the United States and Mexico. If the inflation rat

xz_007 [3.2K]

Answer: The correct answer is "a. the dollar will depreciate and the peso will appreciate.".

Explanation: If the inflation rate in the United States rises relative to the inflation rate in Mexico, it follows that the dollar will depreciate and the peso will appreciate.

As inflation in the United States is higher, the dollar is affected by a loss of purchasing power, therefore it depreciates with respect to the Mexican peso.

5 0

3 years ago

Monetary Policy in Flosserland: In Flosserland, the Department of Finance is responsible for monetary policy. Flosserland has ha

evablogger [386]

Answer:

The correct answer is d) neither the long-run Phillips curve nor the Classical dichotomy.

Explanation:

The answer that best suits the situation described is the Phillips curve in the short term but not in the long term.

The Phillips curve starts from the principle that the amount of money circulating (commonly called "money supply") has real effects on the economy in the short term. In this way, an increase in the money supply would have a beneficial effect on aggregate demand, as citizens will spend more when their nominal wages are increased (known as “monetary illusion”) and a more favorable framework for investment and investment will be created. that the prospects of rising prices will improve the expectations of corporate profits. The improvement in aggregate demand would result in greater economic growth, and this in turn in the creation of new jobs. This is how an inverse relationship between inflation and unemployment is established, expressed graphically by a downward curve.

3 0

4 years ago

The company Andorinha Ltda. presented on 03/15/01 the total amount of R$1,500.00 in the account of Duplicates Payable; soon, on

DerKrebs [107]

Answer:

a) Credit Balance R$1,000.00

Explanation:

The Duplicates Payable represents a Liability in Andorinha Ltd records.

When Andorinha Ltda paid a cash duplicate in the amount of R$500.000 the entries recorded will be :

Trade Payable-Duplicates R$500.000 (debit)

Cash R$500.000 (credit)

<em>Effect on Balance of Duplicates Payable</em>

Decrease in Duplicates Payable by $500,000

Remaining Balance is $100,000 (credit)

8 0

3 years ago

Your parents put $300 into an account paying 11 percent interest for you when you were ten. Ten years later they tell you that y

Flauer [41]

Answer:

The balance in the account = $851.8

Explanation:

The future value of a lump sum is the amount expected at a future date when a sum of money is invested today at a particular rate of interest for certain number of years

This implies compounding the initial amount invested ($300) at the given interest rate(11%) for 10 years.This will be done as follows:

<em />

FV = PV × (1+r)^(n)

FV-Future value

r- rate of return per period

n- Number of period

PV - 300

r-11%

DATA

FV- ?

PV - 300

n- 10

FV= 300 × 1.11^10 = 851.83

The balance in the account = $851.8

3 0

3 years ago

Boots Plus has two product lines: Hiking boots and Fashion boots. Income statement data for the most recent year follow: If $25,

GaryK [48]

Answer:

The missing part of the question is found below:

Boots Plus has two product lines: Hiking boots and Fashion boots. Income statement data for the most recent year follow:

Total Hiking Fashion

Sales revenue $480,000 $340,000 $140,000

Variable expenses 355,000 235,000 120,000

Contribution margin 125,000 105,000 20,000

Fixed expenses 76,000 38,000 38,000

Operating income (loss) $49,000 $67,000 $(18,000)

Answer

By discontinuing fashion line of business operating income would increase by $5,000

Explanation:

The impact of eliminating Fashion line is evident in the revised Income statement below:

Hiking

Sales revenue $340,000

Variable expenses ($235,000)

Contribution margin 105,000

Fixed expenses($76,000-$25,000) ($51,000)

Operating income $54,000

By discontinuing the fashion line of business,the operating income would increase by $5,000 ($54,000-$49,000) from $49,000 when operating the two lines of business to $54,000 when fashion is closed up.

The most appropriate action is to concentrate on the hiking line which might mean that Boots plus has a competitive edge in the Hiking business sector.

4 0

3 years ago