A US multinational company is required to report its financial results in US dollars. How does this create currency exchange risk for the company? What is the term which most accurately describes this particular risk? a. Currency risk- if unexpected changes in currency values affect the value of the firm 4.
EGT 1 Task 2: Elasticity Jeffery S. Short #0257373 Element A: The world of business exists because of the consumer. Business owners are concerned if customers will purchase the goods they offer and how they will react to the constant changes that occur in the marketplace. If a business owner can estimate how consumers will react to product offerings or the changes to those products, then they can offer better services while maintaining profitability. Economists study the many variables involved in the marketplace by observing how consumers react to changes in products, pricing, supply and demand in an effort to classify or codify trends. They then develop calculations to categorize these consumer patterns, and then use them as tools to provide insight into consumer reactions and possible future buying patterns.
When the demand for U.S. dollars increases, the value of the dollar will increase or appreciate (Stone 2008, pp. 685). As a result, U.S. products become more expensive for foriegners causing a reduction in exports and increasing imports. This not only effects the U.S. economy, but also affects the economies in other countries. Monetary policies influence and are influenced by international developments, including exchange rates, and based on these market conditions the U.S. government can make strategic changes to these policies to maintain the country’s economic stability (full employment, stable growth and price stability).
In the next chapter we learn how sellers set the prices in which we pay for an item, why things cost what they do and not what they are worth. The key to prices are sellers that can sell their products as close to the cost of making the item. In a regular market, prices are the key. Businesses cannot afford to charge a higher price, customers are normally looking for a lower price and the lower the better, in today’s economy. Many customers ask the question, “What affects prices?” We learn that things happen beyond the sellers’ and buyers’ control to raise and lower prices in today’s market.
Dollar store current market condition Paper Laura Morrison ECO/365 OCTOBER 10, 2011 Tarron Khemraj Dollar store current market condition Paper To analyze the current market value of the Dollar general Store there are other topics that need to be addressed such as the condition of the organization Market Structure of Dollar general in which describe a company that has made strategic changes. These changes will be based on the market effect, of new companies pricing and Technology, productivity, cost structure, wages, and benefits, and other fixed, and variable costs. Furthermore, it will incorporate price elasticity of demand and the relationship between competitors, and supply and demand analysis as well the effect of government
Proponents of the notion of a "political business cycle" suggest that: A. The standardized budget is a better indicator of the state of the economy than the actual budget B. Cyclical swings in the economy are produced by the inherent instability found in capitalist economies C. A possible cause of economic fluctuations is due to the use of fiscal policy for political purposes D. There is a tradeoff among goals that tends to make the economic policies of state and local governments procyclical 19. One of the timing problems with fiscal policy is an "operational lag" that occurs between the: A. Beginning of a recession and the time that it is recognized that the event is occurring B.
In determining which goods to import from which country and which goods to export, I encountered some of the advantages and some limitations of the international trade. According to the theory of comparative advantage, a country should specialize in the production and export of commodities that it can produce at a lower opportunity cost than other countries while it should import commodities that are produced at a lower opportunity cost than other countries. Limitations such as imposing a quota or tariff can raise the price of products and lead to a loss in consumer surplus or cause retaliation from the country therefore reducing the goods a country is able to export. There are factors that influence the foreign exchange rate which also has an impact on a country’s importing and exporting. Regardless of these things, international trade is important to a countries
Explain why change happens in a business environment. You should include at least three reasons in your answer. Economy is a big factor in change in a business, some reasons for this are as follows: • Competitors behaviour, performance and trends. • Tax and Interest rates • International competitors' behaviour, economy, economic trends, tax, interest rates, exchange rates and trade issues • Product changes Section 2 – Understand the purpose of supporting change in a business environment 1. Identify the main reasons for reviewing working methods, products and / or services in a business environment.
The company needs to identify what is the contributing factor in loss sales and revenue. Internal and External surveys should be done to identify the contributing factor for loss sales and revenue and the key will be to pay attention to details to locate the trouble indicators. Once the company has identified their strength and weakness they will need to identify opportunity for sales and revenue increase for the future. Some of the key questions to identify areas of opportunity are; what are the trends patterns of the customer, what changes in technology will affect this market, what affect the economy
Many economists believe “that a rapid stock of the nation’s money causes inflation” (pg.169). The rate of inflation can affect borrowing power for a new business owner as, “the rate of inflation expected by the borrower and the lender will be influence by various interest rates” (pg. 169). When inflation is high, many lenders interest rate increase to compensate for the impact inflation has on their business and the decrease in purchasing power of money that has to be paid back in the future. Since, the FED set the interest rate in which the banks borrow from, Edgars’ ability to borrow enough money or establish a line of credit to start his business will be affected by inflation, interest rate and financial policies.