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
____ [38]
2 years ago
8

Consider relative purchasing power parity (PPP) and remember the consumer price index (CPI) provides the price level in a countr

y at any point in time. Assume CPI in the US is 165 in 2010 and 200 in 2015, and CPI in Canada is 170 in 2010 and 220 in 2015 (with base year as 2000). If the spot exchange rate was 0.7640 USD/CAD in 2010, what is it in 2015 if relative PPP holds
Business
1 answer:
pychu [463]2 years ago
4 0

Answer:

0.7156 USD/CAD

Explanation:

Relationship between relative PPP and inflation rates can be expressed as given below:

S(1)/S(0) = (1+I(y)) / (1+I(x))................(1)

==> S(0) = spot exchange rate at the beginning of the time period

==> S(1)  = spot exchange rate at the end of the time period

==> I(y) = expected inflation rate for country y, which is foreign country

==> I(x) = expected inflation rate for country x, which is domestic country.

Here, assumes that the US is a foreign country and Canada is domestic country

I(y) = (200/165) - 1 = 21.21%

I(x) = (220/170) - 1 = 29.41%

On putting the values of I(x) and I(y) in the first equation, we get:

S(1)/0.764 = (1+0.2121) / (1+0.2941)

S(1)/0.764 = 0.9366354996

S(1) = 0.764*0.936635

S(1) = 0.7156 USD/CAD

If relative PPP holds, the spot exchange rate in 2015 will be 0.7156 USD/CAD

You might be interested in
What does the word speculation mean to an economist? investing in low-risk stocks with surplus money investing in a type of stoc
Eddi Din [679]
The correct answer among the choices given is the third option. Speculation would mean to an economist as making high-risk investments with borrowed money. It is the purchase of something hoping for it to be more valuable at a certain time.
3 0
2 years ago
Read 2 more answers
Because your patented Gidgit is starting to gain attention and investors are starting to show interest, the executive committee
RideAnS [48]

Answer:

False.

Explanation:

Patent can be defined as the exclusive or sole right granted to an inventor by a sovereign authority such as a government, which enables him or her to manufacture, use, or sell an invention for a specific period of time.

Generally, patents are used on innovation for products that are manufactured through the application of various technologies.

Basically, the three (3) main ways to protect an intellectual property is to employ the use of trademarks, copyright and patents.

In this scenario, Because your patented Gidgit is starting to gain attention and investors are starting to show interest, the executive committee is considering becoming a publicly held company.

Since Gidgit is patented it cannot be sold to the government because it is a registered intellectual property that cannot be used or sold without the approval or consent of the owner.

4 0
3 years ago
Objectives are Multiple Choice the means by which a marketing goal is to be achieved, usually characterized by a specified targe
omeli [17]

Answer:

a road map for the marketing activities of an organization for a specified future time period, such as one year or five years.

Explanation:

A business objective is defined as measurable achievements a company wants to attain within a given period of time.

It acts as a compass that shows that activities are on track to realise business goals.

The steps to get a favourable result are outlined, resources to be used are usually stated and a time frame given to get results.

Goals on the other hand are general results that a company wants to attain. Objectives are more specific.

5 0
2 years ago
The following information is provided for Sacks Company before closing entries. Cash $ 12,000 Supplies 4,500 Prepaid rent 2,000
RideAnS [48]

Answer:

b. $78,500

Explanation:

Assets

Equipment                       $65,000

Cash                                 $12,000

Supplies                           $4,500

Prepaid rent                     <u>$2,000</u>

Total Assets                     <u>$83,500</u>

Equity and Liabilities

Common stock                $68,000

Retained earnings           <u>$10,500</u>

Total Equity                      $78,500

Accounts payable            <u>$5,000</u>

Total Equity and Liability <u>$83,500</u>

*<u>Working</u>

Net Profit = Service revenue - Salaries Expenses - Miscellaneous expenses

Net Profit = $30,000 - $4,500 - $20,000 = $5,500

Total retained Earning = $8,000 + $5,500 - $3,000 = $10,500

5 0
3 years ago
If a gig economy driver takes the standard mileage rate (SMR), which additional expense is allowed on top of the SMR?
Lostsunrise [7]

Answer:how do i get out of this

Explanation:

3 0
3 years ago
Other questions:
  • what are the building blocks of a personality select all that apply A. emotional qualities B, ethnic identity
    11·1 answer
  • Every time andres raises his hand, he receives one point. "raising his hand" is considered the:
    11·1 answer
  • The approaches and activities of managers in short-run and long-run planning and control decisions that increase value for custo
    6·1 answer
  • Your bank offers to pay you a 3% interest rate on a one-year fixed-deposit saving account. The inflation rate is expected to be
    8·1 answer
  • You recently graduated from Empire State University with a degree in Marketing. You loved your time at Empire State, and have ma
    7·1 answer
  • If you co-sign for a friend's credit card, what is the danger to you if your friend fails to pay? A. You might get secured credi
    6·2 answers
  • The first electronic stock market is known as
    6·1 answer
  • Determine whether each of the following topics would more likely be studied in microeconomics or macroeconomics.MicroeconomicsMa
    7·1 answer
  • In a perfectly competitive market, all producers sell very different goods or services. additionally, there are many buyers and
    10·1 answer
  • Cellular Talk is a new firm in a rapidly growing industry. The company is planning on increasing its annual dividend by 25% a ye
    15·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!