Cartel-like behaviour reduces competition and can lead to higher prices and reduced output. 3. Firms can be prevented from entering a market because of deliberate barriers to entry. 4. There is a potential
This gives us a clear comparison and to let us see who has the better GDP. GNP statistics reveal huge differences in wealth between nations. So this can be considered of worth. Reasons it can be considered of worth is that GGNP statistics indicate changes in a countries overall production and the direction of its economy, it can also measure how an economy is functioning, this is very useful when looking at wealth as you would be able to see which countries are thriving and the best to trade with, and which ones are not doing so good. Other reasons statistics are of meaning and worth are because it helps us to identify that the poorest countries actually have a declining GNP.
On the other hand, this idea of free trade is highly disadvantageous, and even harmful, to the Global South with the Global North dictating prices. The less developed countries find it difficult to compete with the economically advanced countries and the production of primary products is poorly paid. What’s more, the fact that the price is dictated by supply and demand leads to instability regarding income. This limits the Global South’s ability to develop as investment is restricted due to economic instability; ultimately free trade has led to “the development of the underdevelopment” In keeping with minimal
LDC(least developed countries) in this group have very low income with a low GDP per capita; they have sometimes been described as ‘Fourth World’ nations to emphasise their bleak conditions and their populations lack of engagement with globalising forces. Countries such as Sudan and Afghanistan are classified in this group; these countries are frequently described as ‘failed states’ by politicians. A benefit is that it’s an average of countries income and doesn’t look at uneven distribution in the world. However a problem with grouping the countries into LEDC’s or MEDC’s is that is far too simplistic to divide the world in two, the distribution of wealth and power is more complex. Instead grouping nations into High, Middle and Low income is now considered more useful.
This also includes the affordability range, and it stops unnecessary consumption, limits price growth to avoid excess societal burden. Government intervention varies with low- income developing countries to industrialized countries. In low income developing country, government’s focus is “how to improve access to their people”, whereas in industrialized nations direct some of their focus on cost-containment. Subsequently, government intervention also faces imperfections. It becomes complicated due to political manipulations.
Explain the circumstances of the LTCM’s collapse, and why the strategies presented in part a) failed. The strategies mentioned before could only generate tiny profits. Because after all the biases between similar bonds or derivative instruments are small, the profit made from their convergence is also small. Therefore leverage has to be used to create attractive returns. The risk control of LTCM’s was set to the volatility of an unleveraged position in U.S. equities.
Mandatory standards are needed because companies might want to make the accounts appear unrealistically favourable. If this were to happen then shareholders would not be obtaining an accurate view of the business. For example, if discretionary expenditure were deferred, such as spending on research and training, then earnings would be artificially improved. There is a need to make it more difficult to manipulate accounts such as by deferring expenditure. 2: The background in the United Kingdom In the 1960’s confidence was lost in accounting procedures.
However single sourcing can be devastating for a firm, worst scenario the firm would not receive any products. The supplier could also lack the capacity to meet the demand from the buying firm regarding such matters as quantity and quality. Multiple sourcing is more common when the firm seeks to enhance competition and flexibility. The cost will be reduced because of competition and the risk with not getting any products will be reduced. Also the buying firm will get more
Mechanically how is your strategy different than your best strategies in 4a Strategy 6 : Inventory Management in Price Cutoffs = 10 could be improved with a small tweak on the preloaded strategy. The cutoff could be reduced from 10 to say 5-6. Why does the change in 5a work better? With the tweaked strategy 6, the reduced cut-off will ensure that the inventory be cut down quickly when the overnight volatility and order processing costs are relatively high. The bid-ask spread is also a cost to the dealer.
It also ensures that he can put a high quality product on the market at a relatively low price. On the contrary, when the government requires that workers be paid more, businesses are forced to make adjustments in other areas to offset the added costs, such as reducing work hours, cutting benefits, hiring fewer people and charging higher prices. Naive lawmakers tend to believe, or at