Joshua is currently consuming the optimal (utility-maximizing) quantities of tuna and ham when the price of tuna suddenly decreases. He will respond to this price change by increasing the consumption of tuna as his purchasing power will increase.
Whenever the price of a commodity is decreased, it increases the purchasing power of the consumer and hence the consumer will increase the demand of the goods as well. The consumer will be able to save more money as their expenses are reduced.
According to the law of demand and supply, demand and supply are related to each other and also affect the price of the commodity. The price tend to increase when the supply is lower than the demand and the price tend to increase when the supply exceeds the demand.
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There are at least five prime ministers up to date that have received the Nobel Peace Prize award. If you were asking for the first one who received it, the answer would be Hjalmar Branting: Prime Minister of Sweden who received the Nobel award in 1921 for supporting the establishment of the League of Nations, and promoting international cooperation between countries. Lester Pearson, Prime Minister of Canada in the 1950's seems like a popular search result as well. He received the award in 1957.
<u>Answer:</u>
According to the International fisher effect , for any two countries, the spot exchange rate should change in an equal amount but in the opposite direction to the difference in nominal interest rates between the two countries.
<u>Explanation:</u>
- International fisher effect states that if there is difference in nominal rate in two countries then this might affect the exchange rate of the two countries.
- If any country has higher nominal interest then there is a higher chance of inflation which might result in depreciation in there currency.
- For example XYZ country has 8% nominal interest and another ABC country have 10%. If we look closely, country ABC will be more appreciable but the country with higher interest will have higher inflation rate.
- So, inflation depreciates the currency of country as compared with the country with low nominal interest.
