Answers
The moment on graph at which the kinked demand curve reverses course is the point of tacit collaboration.
What is the point of tacit collusion?As it ensures optimum profitability for all firms, it symbolizes the price and output level that every company in an oligopoly would ideally prefer to maintain. The companies currently have an implicit agreement to maintain constant output and price levels.
What are the three phases of the kinked demand curve?Three that phases make up the kinked demand curve are:
Above the point of tacit collaboration, the moderately price elastic sector represents the first phase. If the oligopolist in this case raises prices, the other businesses will not do likewise, resulting in a large loss of market share for the firm that is doing so.The vertical portion at the site of tacit collaboration is the second phase. Given the relative inelasticity of the demand in this situation, changes in price have little impact on it.The third phase, which begins below the point of tacit cooperation, is the somewhat price inelastic sector. If the oligopolist reduces prices in this case, the other businesses will do the same, resulting in a price war and lower earnings for all businesses. What is the Nash Equilibrium?The intersection of the firm's marginal revenue curve and marginal cost curve is known as the Nash equilibrium. This depicts the point at which the company optimizes its revenues in light of what its rivals are doing.
Why does the oligopolist always return to the point of tacit collusion?Because tacit collaboration represents the most successful outcome for all businesses, the oligopolist inevitably comes back to it. When one company changes its prices, other businesses will retaliate, which will reduce everyone's earnings. Therefore, maintaining constant prices and output levels at the point of tacit collaboration is in the best interests of all businesses.
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Related Questions
2. Your firm invested $2,506,900 in 230-day commercial paper today. At the end of the investment period (in 230 days) the firm will receive $2,596,100.
a. What is the 230-day holding period rate of return on the investment?
b. How many 230-day periods are there in one year?
c. What is the annual percentage rate APR earned on the investment? d. What is the effective annual rate (EAR)?
Answers
a. The 230-day holding period rate of return on the investment is 3.66%. This is calculated by subtracting the initial investment ($2,506,900) from the return on the investment ($2,596,100), and then dividing by the initial investment ($2,506,900).
What is initial investment?Initial investment is the amount of money that is required to launch a business or other venture. It is often used to cover the cost of purchasing or leasing equipment, hiring staff, and obtaining materials for production. In addition, it is also used to cover the cost of marketing and advertising, as well as other expenses related to starting a business.
b. There are approximately 1.6 230-day periods in one year. To calculate this, divide 365 (the number of days in one year) by 230 (the number of days in the holding period).
c. The annual percentage rate (APR) earned on the investment is 5.86%. This is calculated by taking the 230-day holding period rate of return (3.66%) and multiplying it by the number of 230-day periods in one year (1.6).
d. The effective annual rate (EAR) for the investment is 6.08%. This is calculated by taking the APR (5.86%) and adjusting it for compounding.
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7
Check my work mode: This shows what is comect or incomect for the work you have completed so far does not indie
1
Loong Corporation, a calendar year accrual besis corporation, reported $1 million of net income after tax on its financial statements
prepared in accordance with GAAP. The corporation's books and records reveal the following information
Luong's federal income tax expense per books was $200,000
- Luong's book income included $10,000 of dividends received from a domestic corporation in which Luong owns a 25 percent stock
interest and $4,000 of dividends from a domestic corporation in which Luong owns a 5 percent stock interest
- Luong recognized $10,000 of capital losses this year and no capital gains
- Luong recorded $8,000 of book expense for meals not provided by a restaurant and $10,000 of book expense for entertainment
- Luong's depreciation expense for book purposes totaled $400,000 MACRS depreciation was $475.000
Required:
& Compute Luong's federal taxable income and regular tax liability
& Prepare a Schedule M-1, page 6, Form 120, reconciling Luong's book and taxable income.
Required A
Complete this question by entering your answers in the tabs below.
Answer is complete but not entirely correct.
Compute Loong's federal taxable income and regular tax liability
Note: Enter your answers in whole dollars not in millions.
Amount
Answers
To compute Luong's federal taxable income, we need to start with the financial statement net income of $1 million and make adjustments for items that are not deductible for tax purposes and for items that are taxable but not included in book income. From the information provided, we have:
- Federal income tax expense per books: $200,000 (not deductible for tax purposes)
- Dividends received deduction: $10,000 x 0.25 = $2,500 (deductible for tax purposes)
- Capital losses: $10,000 (deductible for tax purposes)
- Meal and entertainment expenses: $8,000 + $10,000 = $18,000 (50% deductible for tax purposes)
- Depreciation: $475,000 (MACRS) - $400,000 (book) = $75,000 (taxable but not included in book income)
Therefore, Luong's federal taxable income is:
$1,000,000 - $200,000 - $2,500 - $10,000 - $9,000 + $75,000 = $853,500
To compute Luong's regular tax liability, we need to use the corporate tax rate schedule. For taxable income between $500,000 and $10,000,000, the tax rate is 34%. Therefore, Luong's regular tax liability is:
$853,500 x 34% = $290,790
To prepare a Schedule M-1, we need to reconcile Luong's book income to taxable income. The Schedule M-1 has two sections: reconciling items that increase book income but do not affect taxable income, and reconciling items that decrease book income but do not affect taxable income. From the information provided, we have:
Reconciling items that increase book income:
- Depreciation: $400,000
- Meals and entertainment: $18,000
Reconciling items that decrease book income:
- Federal income tax expense: $200,000
- Dividends received: $10,000
- Capital losses: $10,000
Therefore, Luong's Schedule M-1 is:
Increase in book income:
Depreciation: $400,000
Meals and entertainment: $18,000
Total increase: $418,000
Decrease in book income:
Federal income tax expense: $200,000
Dividends received: $10,000
Capital losses: $10,000
Total decrease: $220,000
Net increase in book income: $418,000 - $220,000 = $198,000
Therefore, Luong's taxable income per Schedule M-1 is:
Book income: $1,000,000
Net increase: $198,000
Taxable income: $1,198,000
This completes the answer to the question.
When an individual let a company borrow
their money why did they call it a "share"?
Answers
Answer:
When a company sells a "share" they are selling part of their company and sharing ownership of the company with the stock buyers. The company is sharing the ownership and in some cases will allow owners of their stock to vote on company policies and future plans.
What is not a good reason to request work accommodations?
You have a medical condition that makes it difficult to work eight straight hours.
You live very far away from your office.
You have a chronically sick child who needs care.
You don't like waking up early.
Answers
Requesting work adjustments because "you don't like getting up early" is not a valid justification. Workplace accommodations are designed to give employees with disabilities or medical conditions the appropriate modifications.
What qualifies as a reasonable accommodation and what does not?Removing core job duties, creating new positions, and giving personal necessities like eyeglasses and mobility assistance are not considered reasonable accommodations. The ADA does not forbid businesses from offering these kinds of accommodations.
What does workplace medical accommodation entail?An alteration to a position or workplace that enables a person with a handicap to carry out their tasks is known as a job accommodation. Specialized equipment, changes to the workplace, or alterations to work schedules may all be considered as accommodations.
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Executive Summary Transaction Overview Davis Industries Corporation ("Davis Industries" Or The "Company"
Fill out the grey columns
Answers
The amounts shown in gray columns are as follows: 64.1, 21.2, and 126.0 make up the total of 211.3.
Why is it referred to as an executive summary?The report's most important points should be summarized in an executive summary. It ought to repeat the reason for the report, feature the significant marks of the report, and portray any outcomes, ends, or proposals from the report.
They are referred to as executive summaries because their intended audience is the busy executive who may be required to make decisions regarding funding, personnel, or policy based on project findings or recommendations. By using market research, project examples, independent data, testimonials, etc., but not generalizing or expressing opinions, The reader may be misled. Keep your audience from coming to an unintended conclusion or recommendation. Concentrate on the facts.
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What is one of the main differences between a Roth IRA and a traditional IRA?
One can open a traditional IRA only after the age of
70
1
2
, whereas a Roth IRA can be opened at any time.
Contributions to a Roth IRA can be deducted from the federal income taxes, but traditional IRA withholdings are not considered taxable income at retirement.
Contributions to a traditional IRA may be deducted from the federal income taxes, but Roth IRA withholdings are not considered taxable income at retirement.
An employer may or may not offer an option for the employees to contribute to a traditional IRA, but everyone can open and contribute to a Roth IRA.
Answers
One of main differences between a Roth IRA and traditional IRA is the way they are taxed.
What is IRA?IRA stands for Individual Retirement Account, which is a type of investment account that provides tax advantages for retirement savings in the United States. There are several types of IRAs, including the traditional IRAs, Roth IRAs, SEP IRAs, and the SIMPLE IRAs. Traditional IRAs allow individuals to contribute pre-tax dollars, which reduces their taxable income for the year. Withdrawals in retirement are taxed as regular income. Roth IRAs, on the other hand, allow individuals to contribute after-tax dollars, but withdrawals in retirement are tax-free. SEP and SIMPLE IRAs are designed for small business owners and self-employed individuals. They offer higher contribution limits and tax benefits for retirement savings. IRAs are an important tool for retirement planning and can provide significant tax savings over time. It's important to consult with a financial advisor to determine which type of IRA is best suited for your individual needs and goals.
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What sport is part of both the ancient and modern Olympic games?
chariot racing
O
gymnastics
swimming
fencing
Answers
Answer: Fencing
Explanation:
The sport that is part of both the ancient and modern Olympic games is "fencing." Fencing has been part of the Olympic games since the first modern Olympics in 1896, and it was also included in the ancient Olympics as one of the five original sports.
What are the 3 primary Health Insurance
coverage areas?p
Answers
Answer:
life, health, long-term disability
Explanation:
The three main types of health insurance that the majority of financial professionals advise are life, health, auto , accident, and long-term disability.
Identify the major advantages of automated materials handling systems versus manual or nonautomated systems.
Answers
Automated materials handling systems offer several advantages over the manual or non-automated systems, including Increased efficiency, Improved safety, higher throughput and better inventory control.
What is efficiency?Efficiency refers to the ability to achieve maximum output with minimum input, thereby minimizing waste and maximizing productivity. It is a measure of how well resources are utilized to achieve a specific goal. In the context of business, efficiency can be applied to various areas, such as production, logistics, and customer service. Improving efficiency can lead to increased profits, reduced costs, and improved customer satisfaction. Various techniques can be used to improve efficiency, such as automation, streamlining processes, and improving communication and collaboration between team members. Ultimately, achieving high efficiency requires a focus on continuous improvement and a willingness to adapt to changing circumstances and new technologies.
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What are some products that have tariffs restricting their trade or subsidies promoting it (imposed either by the US or a trading partner)?
What are the dangers or benefits of removing a trading barrier or a subsidy?
Answers
Answer:
Some examples of products that have tariffs restricting their trade or subsidies promoting it are:
Steel and aluminum: The US imposed tariffs on steel and aluminum imports from several countries in 2018, citing national security concerns. Some countries, such as Canada and the EU, responded by imposing retaliatory tariffs on US exports of steel and aluminum. These tariffs have the potential to raise prices for consumers and hurt industries that rely on steel and aluminum imports.
Agricultural products: Many countries impose tariffs on imported agricultural products to protect their domestic farmers. For example, Japan has high tariffs on rice imports, while the US has tariffs on imported sugar. Subsidies for agriculture are also common, with many countries providing financial support to their farmers. These policies can make it difficult for farmers in other countries to compete in the global market.
Textiles and clothing: The US and many other countries have quotas on textile and clothing imports from certain countries, such as China. These quotas limit the amount of products that can be imported and help protect domestic textile and clothing manufacturers. However, removing these quotas could lead to lower prices for consumers and more competition in the industry.
The dangers or benefits of removing a trading barrier or a subsidy depend on the specific situation. Removing a tariff or quota can increase competition and lead to lower prices for consumers, but it can also hurt domestic industries that are unable to compete with imports. Removing a subsidy can reduce government spending and level the playing field for businesses, but it can also lead to job losses and hurt industries that have come to rely on the subsidy. It is important to carefully consider the potential effects of any policy change before implementing it.
Explanation:
Jill is a warehouse clerk at a big-box appliance store. Which step should Jill take first if she wants to transition into a management position?
Answers
Answer:
Jill should first research and understand the job requirements and responsibilities of a management position in the company. This will allow her to identify any gaps in her skills or knowledge that need to be addressed in order to be considered for a management role. She can also speak with current managers in the company to gain insights into their experiences and how they prepared for their positions
Answer:
Jill should look for opportunities to be promoted.
Explanation:
Gaining a promotion gives you the opportunity to take on a more significant job within your organization, earn a larger income, and feel more accomplished. You must perform well at work in order to get your supervisors' attention and improve your career inside your firm. While performance, experience, and abilities are frequently needed for a job promotion in many industries, you can go above and beyond to improve your chances of getting the job you want.
Surgical procedure charge $2400 patients pays half the total amount
Answers
how to use external debt to finance business
Answers
The part of a nation's debt that is borrowed from foreign lenders, such as commercial banks, governments, or international financial institutions, is referred to as its external debt. These loans, including interest, must normally be paid in the currency in which the loan was issued.
What is the advantage of external debt?Foreign debt can be advantageous since it enables the nation to finance investments across a range of industries, so enhancing economic growth. Furthermore, a nation might use the money it borrows from a foreign lender to pay for a variety of expenses.
When you borrow money to finance your firm, this is called debt financing. You consent to return the borrowed money to the creditor, along with interest, at a later time. Debt financing is distinct from equity financing, which involves selling a portion of your company's ownership to raise money.
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HELPPPP MEEEEE
i need help writing this
Answers
Answer: To increase your total income, you can use your earning power in the following ways:Improve your skills: One way to increase your earning power is to acquire new skills or enhance the ones you already have. Consider taking courses, attending workshops or seminars, or pursuing a higher degree to become more valuable to your employer or clients.Negotiate your salary: If you believe you are being paid less than what you are worth, you can negotiate with your employer for a raise. Present a strong case for why you deserve a higher salary and demonstrate how your skills and performance have added value to the organization.Look for higher paying opportunities: If you feel that your current job is not paying you enough, you can explore other job opportunities that pay more. Conduct a job search, network with professionals in your industry, and apply to positions that offer a higher salary.Start a side business: You can also increase your total income by starting a side business. Identify your skills and interests and start a business that aligns with them. This can be a source of passive income or a full-time venture if it becomes successful.Invest your money: Investing your money can be another way to increase your total income. Research and invest in stocks, mutual funds, real estate, or other investments that offer a potential return on investment. However, it's important to remember that investing involves risk and you should always consult a financial advisor before making any investment decisions.
ECONOMICS PLEASE HELP
Answers
Economics is a social science that examines how products and services are produced, distributed, and consumed as well as the decisions that people, corporations, governments, and nations make when allocating resources.
What serves as economics' support?
Those who study economics are better able to comprehend their surroundings. It makes it possible for individuals to comprehend other people, organisations, markets, and governments, enabling them to better react to the challenges and possibilities that arise when circumstances change. Economics is the study of scarcity and how it affects how resources are used, how commodities and services are produced, how production and welfare increase over time, and a wide range of other complicated concerns that are extremely important to society.
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1. Which of the following is an example of
entrepreneurship?
A Jim is a salesperson for a large
electronics company.
B Jane is a door-to-door salesperson for a vacuum company.
C Janet runs a home restaurant business.
Answers
Answer: A. Jim is a salesperson for a large electronics company
Ethiopia's incomes and expenditures are as follows (in billion bire) in 2009
Wages
at what approach 100
Social security contributions
7
Interest income
5
Personal taxes
20
Consumption expenditure by households
60
Government purchases of goods and services
150
50
Transfer payments
100
Corporate profit
30
Investment expenditures by business
20
Corporate Income taxes
50
Indirect business taxes
Undistributed corporate profit
90
Consumption of fixed capital( depreciation)
40
Non income charges
65
Expenditures by foreigners
25
Net foreign factor income earned domestically
25
a. Using expenditure approach, what is GDP?
Answers
The GDP of Ethiopia using the expenditure approach in 2009 was 205 billion bire.
What is Ethiopia's GDP?By adding up all of the expenditures on finished goods and services produced domestically, we may compute the GDP using the expenditure method. The following formula is used to determine GDP when utilizing the spending method:
GDP = C + I + G + (X - M)
where:
C = Consumption expenditure by households
I = Investment expenditures by business
G = Government purchases of goods and services
X = Expenditures by foreigners on domestically produced goods and services
M = Expenditures by domestic residents on foreign-produced goods and services
Using the given values for Ethiopia's incomes and expenditures in 2009, we can further input the values to calculate the GDP as;
GDP = C + I + G + (X - M)
= 60 + 20 + 150 + (25 - 25)
= 205 billion bire
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which did not explain the theories of idealism A, human beings believed peace & harmony B, depicts optimism C, depicts pessimism D, war is not the means to solve conflicts
Answers
"War is not the means to solve conflicts" does not explain the theories of idealism.
Therefore, Option C is the correct option.
What is Theory of Idealism?Theories of idealism are philosophical ideas that emphasize the importance of ideas, values, and consciousness in shaping human experience and understanding of the world. While they may be related to beliefs about peace and harmony, they do not necessarily explain them.
Optimism and pessimism are attitudes or perspectives that reflect positive or negative expectations about the future, respectively. While idealism may be related to optimism, it does not necessarily depict it, nor does it necessarily depict pessimism.
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A 15-year annuity of thirty $8,000 semiannual payments will begin 9 years from now, with the first payment coming 9.5 years from now.
a. If the discount rate is 11 percent compounded monthly, what is the value of this annuity 4 years from now?
b. What is the current value of the annuity?
Answers
The value of the annuity 4 years from now is $254,757.45.
What is annuity?An annuity is a financial product that provides a guaranteed income stream to an individual in exchange for a lump sum or periodic payments. The most common type of annuity is a retirement annuity, which is purchased with retirement savings and provides a regular income throughout retirement. An annuity may be fixed, where the payments are predetermined and do not change over time, or variable, where the payments are based on the performance of underlying investments. Annuities are commonly used to supplement retirement income, protect against market volatility, and provide a source of income that cannot be outlived. However, annuities can also be complex and come with fees and restrictions, so it's important to carefully consider all the factors before deciding to purchase an annuity.
PV = C * [(1 - (1 + r) ^(-n)) / r]
C = $8,000
r = 0.11 / 2 = 0.055 (11% compounded semiannually)
n = 15 * 2 = 30 (30 semiannual payments)
FV = $8,000 * [(1 + 0.055) ^30 - 1] / 0.055
FV = $342,961.86
PV = $342,961.86 / (1 + 0.055/2)^(2*4)
PV = $254,757.45
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Select the correct answer. Which definition correctly describes labor productivity? A. It is the total number of labor hours of a worker during a day. B. It is the total amount of goods produced by a worker during one day of labor. C. It is the total amount of goods produced by a worker during one hour of labor. D. It is the total amount of wages paid to a worker for one day of labor.
Answers
Answer: C. It is the total amount of goods produced by a worker during one hour of labor.
Describe one specific change you would suggest for the Wells Fargo pay plan in two paragraphs. E.x. add a different performance outcome or get more specific on how one of their new performance outcomes could be enacted or consider how to improve internal whistleblowing. Remember that contingent rewards often have unintended consequences, so explain how your change will help assure the performance outcome actually desired.
Answers
A report is made internally by a whistleblower within an organization. For this reason, firms frequently set up whistleblowing channels so that staff members and other interested parties may report malfeasance.
What is Wells Fargo pay plan?
CEO John Stumpf claims that every consumer receives a Fargo product. Furthermore, Wells Fargo revealed that over 5300 of its employees had been let go in recent years as a result of dubious sales practices. These are the principles that Stumpf acted as a role model for and the effects of culture.
The interest rate for each CD period is established at the time the account is opened, and Wells Fargo provides maturities ranging from three months to five years. It's crucial to remember that Wells Fargo's CD rates might fluctuate often and could not correspond to those provided by other financial institutions.
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Priya is in charge of a building site, overseeing all the workers who are building a new elementary school. She receives deliveries of lumber and other supplies, and she makes sure that the work matches or exceeds the standards in state and local building codes. What is Priya’s job title MOST likely to be?
A.
General contractor
B.
Surveyor
C.
Architect
D.
Engineer
Answers
The correct answer is Priya's job title is MOST likely to be option A, a general contractor.A general contractor is responsible for overseeing and managing construction projects from start to finish.
They work with architects, engineers, and other professionals to ensure that projects are completed on time, within budget, and meet all necessary building codes and regulations.In Priya's case, she is overseeing the construction of a new elementary school and ensuring that the work meets the standards set by state and local building codes. This role requires a broad knowledge of construction and building practices, as well as strong project management and leadership skills.Option B, surveyor, is unlikely as their role is to measure and map out land boundaries and topography, and provide data to architects and engineers.
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11-X
Which of the following was not a term
used to describe a manager by the
a Recent Survey?
goverment Employees Participating in
Answers
The term "dictator" is not used to describe a manager by government workers because it is more likely that they use adjectives like "authoritarian" and "strict" instead.
Who is viewed as a tyrant?A dictator is someone who exercises total control over others or at least behaves as though they do. A dictator is a leader in government who has complete control over a country and has no checks and balances to prevent power abuse. A person who behaves in a similar manner on a smaller scale is also known as a dictator. The Latin term "dictator" is the origin of the term "dictatorship." In the Roman Republic, the term "dictator" was used to describe a temporary magistrate who was given extraordinary powers to deal with state crises. However, modern dictators more closely resemble tyrants than dictators.
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). As a group leader in your business studies class, describe to your members how you would use external debt to finance your business?
Answers
As group leader in our business studies class, if we were to consider using external debt to finance our business, I would first ensure that we thoroughly research and understand types of external debt available to us.
What is external debt?External debt is the portion of a country's total debt that is owed to foreign lenders or creditors. This can include loans, bonds, and other forms of borrowing that are taken on by governments, businesses, or individuals in one country but owed to lenders in another country. External debt can be denominated in the borrower's domestic currency or in a foreign currency, and it is usually subject to repayment with interest. The level of external debt can have significant economic implications for a country, as it can impact the country's creditworthiness, ability to attract foreign investment, and overall financial stability. High levels of external debt can also increase a country's vulnerability to economic shocks, such as changes in exchange rates or fluctuations in global interest rates.
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how does a digital business manager increase the usage of intranet and extranet
Answers
Businesses are increasingly relying on intranets to deliver tools such as collaboration, scheduling, customer relationship management tools, and project management.
How can the internet intranet and extranet be used in the workplace?An intranet is a private, internal business network that allows your employees to share information, collaborate, and improve communication. An extranet allows your company to communicate and collaborate with selected business partners, suppliers, and customers more effectively.
How do businesses use extranets to manage information?einsteinerupload of. The software enables businesses to create a secure online environment for centrally sharing and storing information, saving time and allowing external users to access up-to-date and accurate information whenever they need it.
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One of the main features of globalization is
Answers
One of the main features of globalization is the increasing interconnectedness and interdependence of economies, cultures, and societies around the world.
What is globalization ?Globalization refers to the process by which goods, services, ideas, and people move more freely across national borders, facilitated by advances in technology, transportation, and communication.
This interconnectedness has led to a number of other features of globalization, such as the growth of multinational corporations and the spread of global cultural trends. Globalization has also led to increased competition and integration in the global economy, with many businesses and industries operating on a global scale.
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Risk and uncertanity may arise due to lack of Complete information about a particular Opportunity yet, the entrepreneur will work with what Information is available to decide whether or not to proceed with an opportunity. Discuss two ways in which an entrepreneur will use Informations to understand risk and Uncerfanity and deciding whether or not to exploit a business opportunity
Answers
Entrepreneurs can analyze financial data or conduct market research to understand risk and uncertainty.
What is a risk?
A risk is any potential event or circumstance that may lead to negative consequences or impact achieving objectives.
In the business context, risk specifically refers to the potential for financial loss, reputational damage, or other negative consequences that may arise from business activities or decisions.
Two ways entrepreneurs can understand risk and uncertainty are:
analyzing financial data, andconducting market researchAnalyzing financial data involves for example evaluating the potential costs and revenue streams of the venture. While, conducting market research involves researching consumer needs, competition, and industry trends.
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Which process involves checking the progress of the project and fixing any problems?
Answers
Answer:
I think Project Management is the right answer.
If I got it right...
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A bakery sells $31,000 worth of baked goods in a month. At the beginning of the month they purchased $3,000 worth of ingredients. After that they they pay their 6 workers $1,500 each. They pay $2,600 for rent, and $400 for utilities.
Without factoring in taxes, what is the bakery's profit for the month?
$31,000
$46,000
$16,000
$23,500
Answers
To calculate the bakery's profit, we need to subtract all of their expenses from their revenue.
Revenue = $31,000
Expenses:
Cost of ingredients = $3,000
Wages for 6 workers = 6 x $1,500 = $9,000
Rent = $2,600
Utilities = $400
Total Expenses = $3,000 + $9,000 + $2,600 + $400 = $15,000
Profit = Revenue - Expenses = $31,000 - $15,000 = $16,000
Therefore, the bakery's profit for the month is $16,000.
using an IS-LM -BP model, describe the effects of currency devaluation and revaluation in an economy.
Answers
Currency devaluation is a deliberate downward adjustment of a currency's value relative to other currencies.
What is Currency devaluation?Currency devaluation is the intentional downward adjustment of a currency's value relative to other currencies.
When a currency is devalued, its purchasing power is weakened in comparison to other currencies. This makes exports from the devaluing country less expensive, while imports become more expensive. Devaluation is often seen as a tool to help stimulate a struggling economy.
Conversely, currency revaluation is an upward adjustment of the value of a currency relative to other currencies. Revaluation strengthens the purchasing power of a currency relative to other currencies, making exports more expensive and imports less expensive. Revaluation is often used to address inflationary pressures in an economy.
In an IS-LM-BP model, currency devaluation and revaluation can have a variety of effects. In the IS curve, currency devaluation will shift the curve to the right, as it increases net exports and therefore increases aggregate demand. This increases output and reduces unemployment, stimulating the economy. Conversely, currency revaluation will shift the IS curve to the left, decreasing aggregate demand and output.
In the LM curve, currency devaluation will shift the curve to the left, as it reduces the amount of money needed to purchase a given amount of output. This increases the money supply
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