If the country can produce a good or service at a lower opportunity cost, it has a comparative advantage.
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What is comparative advantage?</h3>
- In an economic model, agents have a comparative advantage over others if they can produce that good at a lower relative opportunity cost or autarky price, i.e. at a lower relative marginal cost prior to the trade.
- Comparative advantage describes the economic reality of trade advantages for people, firms, or nations as a result of disparities in their factor endowments or technological progress.
- (The absolute advantage, comparing output per time (labor efficiency) or per quantity of raw material (monetary efficiency), is typically considered more intuitive but less accurate – productive trade is possible as long as the opportunity costs of manufacturing commodities vary between countries.)
Therefore, if the country can produce a good or service at a lower opportunity cost, it has a comparative advantage.
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Answer: True
Explanation:
Financial intermediaries are the institutions they have been put in place like a building society, bank, or unit-trust company, which are charged with the responsibility of holding funds from the lenders so that loans will be made available to people that wants to borrow.
It should be noted that banks that are financial intermediaries generate earnings when they facilitate the transfer of money from savers to borrowers by paying savers a smaller return than they demand from borrowers. This earning is their charges for the service rendered.
Answer:
$15.43
Explanation:
Following actions are required for triangular arbitrage:
Available: $ 10,000
Buy sterling pound @ 1 $ = 1.62 pounds and receive pounds 6172.84 upon conversion.
Now, sell these pounds and purchase NZ $ at the rate :
1 pound = NZ $ 2.95 and receive NZ$ 18209.87
Now, reconvert the above proceeds into US $ at the rate
1 NZ $ = $0.55 i.e sell NZ $ at this rate and receive US $ 10,015.4285
Hence profit from implementing triangular arbitrage is $10,015.43 - $10,000
= $15.43
Arbitrage refers to the prospect of earning a profit by utilizing the mispricing in two different financial markets. An arbitrageur never uses his own funds and always borrows.
Arbitrage works only in the scenario wherein the interest rate purchase parity (IRPT) does not hold good.
The strategy of arbitrage is best explained as "Buy at low price and sell at a high price".
Answer:
False
Explanation:
The climate of the organization refers to the work environment that is perceived by the employees. A positive environment improves employee satisfaction and because of that managers try to maintain this. They can asses the climate in their work groups and make changes in management practices that can affect the working climate. Because of that, the statement that says that the actions of associates in supporting diversity are more important than the actions of managers because associates establish the working climate of the organization is false because the managers as the leaders can improve or not the climate of the organization with their decisions.
