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.
“Another negative factor was a 6.6 percent drop, on an annualized basis, in federal defense spending.” She supports that the decrease in GDP is directly related to the decrease in government spending g which proves how fiscal policy can affect overall economic growth. Monetary policy can be defined as: A central banks changing of the money supply to influence interest rates and assist the economy in achieving price stability, full employment, and economic growth. The article discusses how decline in economic growth can in part be due to uncertainty of interest rates which is directly controlled by the Federal Reserve. The author supports this idea by showing that uncertainty of interest rates has affected business investments and the slowing of the housing
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.
2. a. Critique Ace Repair’s current method of estimating its before-tax cost of debt. b. Is the earnings yield (E/P) an appropriate measure of the firm’s cost of equity? 3. a.
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. This change may be due to weather conditions, new transportation options, or an increase in the demand for a product or service. Oil companies are a prime example of the affects in pricing, and adjusting the prices of gasoline as supply and demand change. The government has many ways to affect prices, by taxes and subsidies, which lead us into the next chapter. How do you fix the prices?
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.
Highlight statistics that you think would indicate that your country runs a market-oriented economy. Conversely, highlight statistics that would indicate government intervention in your market. Use this data to place your Country on the Economic System continuum document, alongside the rest of your teammates. On your continuum, place the flag of your country in what you think the correct spot is. Include a brief characterization of your economy
Quiz #1 1. TCO 1) The primary focus of the study of economics is on making the most efficient use of scarce productive resources. 2. (TCO 1) The key economic concept that serves as the basis for the study of economics is Student Answer: scarcity. 3.
The think that I learn from this project, when there is economical problem the prices of stock fluctuate whether it goes up or down. This assignment taught me how to better understand the stock market and what we should expect when it falls or goes up. And what could be the risk when investing such a lower market. I learn that various industry have different trend and the way to develop those trend. I learn that the company who mislead their consumer could run to a higher risk.
The following is a dissemination of our reviews and research. Abe & Kuldip: Surplus is an excess of revenues over payments Budget surplus influences the health of our economy by creating additional funds with which the government can use