Answer: E) Many people who work for manufacturing plants live in areas in which the manufacturing plant is the only source of employment.
Explanation:
The scenario that'll make the labor union accept Richard's suggestion to lower the wages is when many people who work for manufacturing plants live in areas in which the manufacturing plant is the only source of employment.
The reduction in wages by Xanadu Industries wouldn't bring about loss.of workers as the manufacturing plant is the only industry in the area. Another way the company can reduce cost is through the reduction in its raw materials cost. If the employees aren't satisfied due to the reduction in wages, they can look for employment at Utopia Industry.
Therefore, the correct option is E.
Answer:
Explanation:
Forward excahnge rate/spot exchange rate = (1+rh)/(1+rf)
rh - periodic interest rate in the home currency
rf - periodic interest rate in the foreign currency
Forward/90 = [1+1%*180/360]/[1+2%*180/360]
Forward = 1.005/1.01 * 90 = 89.55
Forward rate is 89.55 yen/$
Answer:
D) Quantity sold rose while the effect on price is ambiguous.
Explanation:
Two separate things happened here;
- Change in consumer habits have shifted the the demand curve to the right, increasing the quantity demanded at every price level.
- Better technology and lower costs have also shifted the supply curve to the right, increasing the quantity supplied at every price level.
One thing is certain, the quantity demanded and supplied increased, so the total quantity sold definitely increased. The price issue is not certain because you would need additional information about which shift was larger, the shift of the supply curve or the demand curve.
Answer:
differing opinions on the point we are on the Laffer Curve
A
Explanation:
The Laffer Curve is a supply side economic theory developed by Arthur Laffer in 1974.
The curve depicts the relationship between tax rates and tax revenue
According to this theory, higher income tax rate reduces the incentive of labour to work and invest due to the fact that labour would have to pay higher tax. This means that at some point, increase in the tax rate would decrease government revenue rather than increase it.
The theory submits that there is an optimal tax rate at which tax income is maximised. Once this point is surpassed, increase in tax rate would reduce government revenue
Price ceiling is when the government or an agency of the government sets the maximum price for a product. It is binding when it is set below equilibrium price.
Effects of a binding price ceiling
1. It leads to shortages
2. it leads to the development of black markets
3. it prevents producers from raising price beyond a certain price
4. It lowers the price consumers pay for a product. This increases consumer surplus
A rent ceiling would lead to shortage of houses and a reduction of the quality of available housing.
Answer:
Interceptors, Inc.
Cash flow from financing in 2018:
$71
Explanation:
a) Data and Calculations:
2015 2016 2017 2018
Cash $ 54 $ 78 $ 102 $ 126
Cash from operations $ 146 $ 144 $ 141 $ 136
Net capital spending $ 178 $ 173 $ 178 $ 183
Cash from financing $ 56 $ 53 $ 61
2015 2016 2017 2018
Cash at the beginning $30 $54 $78 $102
Cash from operations $ 146 $ 144 $ 141 $ 136
Cash from financing $ 56 $ 53 $ 61 $ 71
Net capital spending ($ 178) ($ 173) ($ 178) ($ 183)
Cash $ 54 $ 78 $ 102 $ 126
Cash from the beginning for 2015 = (Cash at the end plus net capital spending) minus (Cash from operations plus cash from financing)
= /$30 ($54 + $178) - ($146 + $56)
Cash from financing in 2018 = (Cash at the end plus net capital spending) minus (Cash from operations plus cash at the beginning)
= $71 ($126 + $183) - ($136 + $102)
