(p.748). A declining exchange rate decreases the buying power of currency and capital gains resulting from any revenues. These exchange rates take an important role in the rate of revenues on their
Factors like the strength of the economy, activities of international investors, and foreign trade all have something to do with the change in supply and demand. Given the size and mobility, the flow of capital is a determining factor of how the exchange rates will comply. Once the influences mentioned above affect the interest rates, the exchange rates among the market determined currencies are also influenced because currencies are extremely vulnerable to changes in interest rates and sovereign risk factors. The key drivers of an exchange rate stem from international capital and trade flows, the interest rate differentials net of expected inflation, trading activities in other currencies, monetary policy and central banks, and financial and political stabilities. If local prices in a country increase more than prices in another country for the same product; being is that foreign exchange forward markets are linked to interest markets; then the local currency may decline in value via its foreign counterpart, presuming there is no change with the structural relationship between the two.
only the portion of the loss attributable to inventory sold during the period is recorded in the financial statements. B. the market value figure for ending inventory is substituted for cost and the loss is buried in cost of goods sold C. a loss is recorded directly in the inventory account by crediting inventory and debiting loss on inventory decline. D. there is a direct reduction in the selling price of the product that results in a loss being recorded on the income statement prior to the sale. 15) Designated market value A. may sometimes exceed net realizable value. B. should always be equal to net realizable value less a normal profit margin.
This is an implausible trend on the Balance sheet that BDO should have investigated further, especially with Leslie Fay’s outstanding Income Statement. 2.) First of all I would want to investigate vendor and customer accounts to reconcile payable and receivable amounts. Also, I would obtain bank statements and other lines of credit since the long term debt to equity ratio shows the company being highly leveraged.
ECON 1312 Homework Assignment # 2 Chapter 4 1. Why do we need a units-free measure of the responsiveness of the quantity demanded of a good or service to a change in its price? Answer: To measure or to compare the demand of the two unrelated goods or services. 2. Define the price elasticity of demand and show how it is calculated.
(asic.gov.au) · As the financial markets became mainstream and matured, the access to capital markets and their scrutiny have both increased. Along with the added volatility, the lending markets have seen similar risks as equity markets. With the increased speed of both financial information and market changes, the rating agencies are more important as a first step, as they are to be scrutinized for their ratings and the trend in their rating changes. (investopedia.com) · CRAs and their ratings played a critical role in the recent market turmoil. Unlike securities trading on deeper, more transparent markets, credit ratings have had an inordinate impact on the valuation and liquidity of subprime RMBSs and RMBS backed
The Classical Dichotomy was a term introduced by Patinkin in the 50s to describe what classical economists believed the standard model of the economy was. It proved to be central to early economists thinking of the role of money and its controversies still play a significant role today. This paper will analyse the role that the short run and long run play in the Classical Dichotomy by firstly looking at the model and its mechanics. This will be followed by looking at the invalidity of the model and Patinkin’s contribution to the debate. Lastly a critique of Patinkin’s view of money will be discussed and how the short run and long run has been treated in reference to money.
In light of these disparities, he believes that a “race to the bottom” is a real threat. Tensions among the states could become especially severe during a sharp recession. Under such conditions, lacking countercyclical federal assistance, states with low per-capita income would be especially
What do economic sanctions achieve? The complexity of this question rests upon the scenario in which the economic sanctions are being imposed upon. One must consider that economic sanctions seem to aim for something in which they also may be causing; I refer to the idea that sanctions are imposed to eradicate unjust procedures. However, within many economic sanctions that are imposed – they create significant humanitarian, political and economic issues. (Gordon, 2006) One must avoid viewing this question bluntly as we must delve into all the elements involved.
The relationship between economics & global security is complex & not necessarily an immediate link to make. The relationship between economics & global security is complex & not necessarily an immediate link to make. It is central to understand the importance of a country's economic standing, or progress, & the effects that would have on the country as a whole. This can be done by exploring the theories of structuralism. In exploring the relationship between economic inequalities & global security it is also important to define the categories in which countries are classified with regards to their economic standing.