The long-run equilibrium of an economy occurs when the economy is operating at its natural rate of unemployment and the expected rate of inflation. In this case, the United States economy is in long-run equilibrium with an expected inflation rate of 6 percent and an unemployment rate of 5 percent. The nominal interest rate is 8 percent.
(a) To show the long-run equilibrium on a graph, we need to plot the short-run and long-run Phillips curves. The short-run Phillips curve represents the trade-off between inflation and unemployment in the short run, while the long-run Phillips curve represents the natural rate of unemployment and the expected rate of inflation. The current long-run equilibrium can be represented as point A on the graph.
(b) To calculate the real interest rate in the long-run equilibrium, we need to subtract the expected inflation rate from the nominal interest rate. In this case, the real interest rate would be 8 percent - 6 percent = 2 percent.
(c) If the Federal Reserve decides to target an inflation rate of 3 percent, they should undertake an open-market operation to decrease the money supply. This can be done by selling government bonds in the open market, which would reduce the amount of money in circulation.
(d) The open-market operation undertaken by the Federal Reserve will affect the nominal interest rate. When the money supply decreases, the demand for money will exceed the supply, leading to an increase in the nominal interest rate.
(e) An increase in the nominal interest rate will affect aggregate demand in the short run. When the interest rate increases, borrowing becomes more expensive, leading to a decrease in consumption and investment. This will result in a decrease in aggregate demand.
(f) If the Federal Reserve's action is successful, and the economy approaches a new long-run equilibrium, the following will happen:
(i) The short-run Phillips curve will shift to the left. This is because a decrease in the inflation rate targeted by the Federal Reserve will result in a decrease in the expected rate of inflation. As a result, there will be a decrease in the trade-off between inflation and unemployment in the short run.
(ii) The natural rate of unemployment will remain unchanged. The long-run equilibrium represents the natural rate of unemployment, which is determined by structural factors in the economy. The Federal Reserve's action does not directly affect the natural rate of unemployment.
Know more about long-run equilibrium here:
https://brainly.com/question/13085229
#SPJ11
In addition to international mutual funds, critically discuss how investors can achieve international portfolio diversification "at home" from the perspective of dollar-based investors
Expert Answer
In addition to international mutual funds, dollar-based investors can achieve international portfolio diversification "at home" by investing in American Depository Receipts (ADRs), multinational corporations (MNCs), and exchange-traded funds (ETFs) that are focused on foreign markets.
ADRs are certificates issued by a US bank that represent ownership of a foreign company's stock and are traded on US exchanges. MNCs are companies that operate in multiple countries and generate revenue and profits from foreign operations. ETFs provide exposure to foreign markets by investing in a basket of stocks from a particular country or region. Investing in ADRs, MNCs, and ETFs can provide investors with exposure to foreign markets while avoiding the complications and risks associated with investing directly in foreign stocks. These investments also provide the benefits of diversification across sectors and industries within foreign markets, which can help reduce risk and increase returns.
However, investors should be aware that there are risks associated with investing in international markets, such as currency risk, political risk, and economic risk. Therefore, it is important to conduct thorough research and due diligence before making any investment decisions and to diversify across different asset classes and regions to manage risk. In conclusion, dollar-based investors can achieve international portfolio diversification "at home" by investing in ADRs, MNCs, and ETFs that provide exposure to foreign markets while minimizing the risks associated with investing directly in foreign stocks. It is important to be aware of the risks associated with investing in international markets and to diversify across different asset classes and regions to manage risk.
To know more about the portfolio, visit:
https://brainly.com/question/29418020
#SPJ11
A five-year, 6.5% bond with a YTM of 5.0% has a duration of 4.45 and convexity of 25.59. The bond's current price quote is 106.494. Assume the bond pays annual coupons and has a par value of $1.000. a. Compute the percentage change in the bond's price if its YTM increases 75 basis points. b. Estimate the percentage change in the bond's price using modified duration and the convexity correction (the duration \& convexity rule) if the bond's YTM increases 75 basis points. c. Compute the percentage change in the bond's price if its YTM decreases 90 basis points. d. Estimate the percentage change in the bond's price using modified duration and the convexity correction (the duration \& convexity rule) if the bond's YTM decreases 90 basis points.
To calculate the percentage change in the bond's price if its YTM increases 75 basis points, we can use the following formula.
[tex]% Change in bond price = - Duration × ΔYTM + (Convexity × ΔYTM²) / 2[/tex] Where: Duration = 4.45ΔYTM = 75 basis points = 0.75%Convexity = 25.59 Therefore, [tex]% Change in bond price = - 4.45 × 0.75 + (25.59 × 0.75²) / 2= - 3.3375 + 11.4141= 8.0766[/tex] The percentage change in the bond's price if its YTM increases 75 basis points is approximately 8.08%.
To estimate the percentage change in the bond's price using modified duration and the convexity correction if the bond's YTM increases 75 basis points, we can use the following formula:[tex]% Change in bond price = - Duration × ΔYTM + (Convexity × ΔYTM²) / 2[/tex]Where: [tex]Duration = 4.45ΔYTM = 75[/tex] [tex]basis points = 0.75%Convexity = 25.59.[/tex]
To know more about percentage visit:
https://brainly.com/question/32197511
#SPJ11
Which of the following functions of money would be violated if inflation were high? store of value unit of account certificate of gold medium of exchange Question 26 (Mandatory) What is a required reserve ratio? The percent of deposits that banks must keep on hand. The percent of reserves that banks can loan out. The ratio of deposits to loans. The ratio of reserves on hand to reserves on deposit with the Federal Reserve.
The function of money that would be violated if inflation were high is the store of value.
One of the most important functions of money is as a store of value. Money can be saved for use in the future due to this function. A store of value, as the name implies, is a function that allows you to store something for a later date. Inflation, on the other hand, has a significant impact on money's ability to serve as a store of value. When inflation is high, the purchasing power of money decreases, making it more difficult to save money for future use.
Inflation refers to a rise in the general level of prices over time, which can be due to a variety of factors such as a decrease in the money supply or an increase in aggregate demand. Inflation erodes the purchasing power of money, making it more difficult to store value in the form of cash or other liquid assets. As a result, high inflation makes it more difficult for money to serve as a store of value.
Learn more about aggregate demand: https://brainly.com/question/15157098
#SPJ11
Acme Fashion Company Acme Fashion Company (Acme) was founded fifteen years ago in England, when a small retail store was opened to sell premium-priced women's clothing based on traditional Indian designs. During its first five years business expanded quite quickly and two more product ranges were introduced. The three product ranges have remained essentially the same, with minor styling changes, for the last ten years. Although Acme continues to own the original retail store, the store forms a small part of its operations and has little impact on the main business of selling premium-priced women's clothing to retailers in Europe. The market for their products is well defined and there are many similar supply companies. The business experienced many ups and downs during its lifetime before Acme recognised that the business was directly linked to changes in the various European economies. When the economy expanded super profits could be made. When the economy slowed it was necessary to curtail operations. Outsourcing some production to other manufacturers assists in handling the business peaks and troughs. Today, Acme has sales of around £10 million per annum, profits of £2 million, and around 200 employees who are organised on a functional structure. There are no borrowings. Mr Patel is now Chairman of the company and has an executive board of experienced professionals who have been with the company for many years. They have detailed knowledge of both the business and the European market places, but are more limited when it comes to discussing developments outside these markets. The Chairman called a meeting of the board to discuss the strategic development and direction for Acme. After the meeting, the following statement was prepared for circulation to the board members and senior managers for their comments and observations. Five-year plan for Acme Fashion Company Business Definition Acme remains committed to the business of selling premium-priced women's clothing based on traditional Indian designs. Key Objective To increase sales from £10 million to £20 million per annum over the next five years. Environment At present Acme sells only in Europe. Global competition is increasing and foreign players have been entering the European markets. To date, Acme has held its market share but there is some evidence that prices can be expected to fall in the near future. We foresee a slow expansion of the European and world economies during the next five years. Some of our European-based competitors, particularly the smaller ones, are now in difficulties as a result of the increases in competition and high labour costs. Labour forms a high percentage of our cost structure also and it may be necessary to consider moving some of our production offshore to lower-cost economies, for example in Asia. Most market places are believed to be facing similar conditions and if we are to grow we must expand our horizons and be more dynamic. Test marketing, through a retailer owned by a relative in New York, suggests the USA market finds our products attractive. Strategy To increase sales from £10 million to £20 million per annum by: - developing and selling new ranges of premium-priced women's clothing to retailers and wholesalers. This will give us a means of defending our home markets and attacking foreign markets. - entering new geographic markets, commencing with the USA. This will assist our growth. - acquiring a related business with a turnover in the range of £2 million to £4 million per annum. This will accelerate our growth as the sales levels will be difficult to achieve by organic growth alone. Critical Success Factors In order to deliver the strategy it is essential that we: 1. Maintain the quality of our products 2. Maintain inventory at current levels 3. Increase European PR and advertising spend 4. Increase sales by 20 per cent per year 5. Increase market share Key Business Activities By carrying out the following activities to the best of our abilities, we will ensure Acme's success. 1. Monitoring sales performance 2. Establishing new sources of supplies 3. Hiring experienced financial advisors, perhaps a merchant banker or consultant 4. Defining profiles for desirable market places 5. Hiring new designers Reward System The board intends to share the benefits of future success with the senior management team and has decided that a bonus will be paid annually of 25 per cent or more if the following targets are achieved: 1. Increase sales by 20 per cent per annum 2. Recruit new dealers and retailers 3. Maintain inventory at current levels 4. Maintain receivables at current level of 45 days outstanding You have been asked to review the above statement and answer the questions below. 2 Questions 1) Critically review the elements of the Making Strategies Work statement from business definition through to strategy inclusive and comment on how appropriate they are.
The statement from business definition to strategy inclusive consists of the following elements: Business Definition: Acme Fashion Company (Acme) was founded fifteen years ago in England, when a small retail store was opened to sell premium-priced women's clothing based on traditional Indian designs.
Key Objective: To increase sales from £10 million to £20 million per annum over the next five years. Environment: At present, Acme sells only in Europe. Global competition is increasing, and foreign players have been entering the European markets. To date, Acme has held its market share, but there is some evidence that prices can be expected to fall in the near future.
Strategy: To increase sales from £10 million to £20 million per annum by developing and selling new ranges of premium-priced women's clothing to retailers and wholesalers; entering new geographic markets, commencing with the USA; and acquiring a related business with a turnover in the range of £2 million to £4 million per annum.
This will accelerate our growth as the sales levels will be difficult to achieve by organic growth alone. Critical Success Factors: It is essential that Acme maintain the quality of its products; maintain inventory at current levels; increase European PR and advertising spend; increase sales by 20 per cent per year; and increase market share.
Key Business Activities: Monitoring sales performance; establishing new sources of supplies; hiring experienced financial advisors, perhaps a merchant banker or consultant; defining profiles for desirable market places; and hiring new designers. Reward System:
To know more about traditional visit:
https://brainly.com/question/27992543
#SPJ11
one could argue that gdp is not a good measure of the standard of living in a nation because it
GDP fails to account for income inequality, non-market activities, environmental sustainability, and social factors, limiting its ability to measure the standard of living accurately.
GDP measures the total economic output of a country, primarily focusing on the production and consumption of goods and services. However, it does not provide a comprehensive assessment of the standard of living for several reasons.
Firstly, GDP does not consider income distribution. It aggregates all economic activity, meaning that high GDP figures can coexist with significant income inequality. A country with a high GDP may have a small elite enjoying vast wealth while a large portion of the population struggles with poverty and limited access to basic necessities.
Secondly, GDP does not account for non-market activities and the informal economy. It does not capture unpaid work, such as household chores and caregiving, which are crucial for the functioning of society but are not accounted for in GDP calculations.
Similarly, activities within the informal sector, such as small-scale businesses and subsistence farming, often go unrecorded, leading to an incomplete picture of economic activity.
Additionally, GDP fails to consider environmental sustainability and resource depletion. Economic growth measured by GDP can come at the expense of natural resources, ecological damage, and increased pollution, which negatively impact long-term well-being and quality of life.
Moreover, GDP does not capture factors like education, healthcare, social services, and cultural aspects that contribute to the overall standard of living. A nation with high GDP may still have inadequate access to quality education or healthcare, limiting opportunities and well-being for its citizens.
In summary, while GDP provides a measure of economic activity, it falls short in reflecting the overall standard of living and well-being. It overlooks income distribution, non-market activities, environmental sustainability, and various social factors that are vital for a comprehensive assessment of the standard of living in a nation.
For more question on GDP visit:
https://brainly.com/question/1383956
#SPJ8
Imagine there is a raffle for a single item: a brand-new Corolla to the value of $30,000. You have no belief in winning this raffle but because your friend put his heart into it, you want to prove they’re wrong. You buy only one 10$ ticket, but your friend buys two 10$ tickets. Three thousand tickets are sold. What is the expected value of your gain? What is the expected value of your friend’s gain? What would be the expected value of your friend’s gain if he/she purchased one 20$ ticket instead?
What if you purchase a 10$ ticket and you are entered into a chance of winning the car, a Yamaha motorcycle, and a Samsung S22 ultra. What is the expected value of your gain?
The expected value of your gain is positive, which means that you are more likely to make money than to lose money. The expected value is still relatively small, so you should not expect to get rich by buying raffle tickets.
The expected value of your gain is calculated as follows:
Expected value = (Probability of winning * Value of winning) + (Probability of losing * Value of losing)
The probability of winning is 1 ticket / 3000 tickets = 0.000333.
The value of winning is $30,000.
The probability of losing is 1 - 0.000333 = 0.999667.
The value of losing is -$10.
Therefore, the expected value of your gain is:
Expected value = (0.000333 * 30000) + (0.999667 * -10) = -$2.99
The expected value of your friend's gain is calculated the same way, but they bought two tickets, so their probability of winning is doubled. So, their expected value of gain is:
Expected value = (0.000666 * 30000) + (0.999333 * -10) = -$1.99
If your friend bought one $20 ticket instead, their probability of winning would be the same, but the value of winning would be doubled. So, their expected value of gain would be:
Expected value = (0.000666 * 30000) + (0.999333 * -20) = -$9.99
Finally, if you purchase a $10 ticket and you are entered into a chance of winning the car, a Yamaha motorcycle, and a Samsung S22 ultra, the expected value of your gain:
Expected value = (Probability of winning * Value of winning) + (Probability of losing * Value of losing)
The probability of winning is 1 ticket / 3000 tickets = 0.000333.
The value of winning is $30000 + $5000 + $1000 = $36000.
The probability of losing is 1 - 0.000333 = 0.999667.
The value of losing is -$10.
Expected value = (0.000333 * 36000) + (0.999667 * -10)
Expected value = $10.89
To learn more about purchase: https://brainly.com/question/31832768
#SPJ11
Question 2: Intertemporal consumption [30 marks] Consider a two-period model in which an agent needs to decide how much to consume today, c1 and how much to consume tomorrow, c2. They begin in period 1 with some wealth, W, and receives income in both periods, y1 and y2. They can borrow or lend at rate r and their utility function is given by: u(c1,c2)=c1αc21−α Therefore the marginal rate of substitution (MRS) is: −∂c2∂u∂c1∂u=−1−ααc1c2 a) Derive an algebraic expression for the optimal present and future consumption, c1 and c2, as a function of the present value of lifetime resources (PVLR). b) Assume α=0.4,W=100,y1=100,y2=50, and r=5%. Find the numerical values for c1 and c2 using the formulas found in a). c) Does the individual saves or borrows? Explain. d) α and (1−α) represent the agent's preferences for present and future consumption, respectively. i. Find the value of α such that the equilibrium is now at the no-borrowing-no-lending point. ii. Find the value of α such that the equilibrium is now at the perfect consumption smoothing point. e) In the model, we assumed that every resources left in period 2 are consumed. Instead, let's assume the individual wants to leave an inheritance (denoted by B for Bequest). Rewrite the budget constraint with this new feature (algebraically only).
Intertemporal consumption The solution to this question is presented below; a) An agent in a two-period model has to decide how much to consume in period 1 (c1) and period 2 (c2) while beginning with wealth W and receiving income in both periods y1 and y2, respectively.
The agent can borrow or lend at the rate of r. The given utility function is as follows:
u(c1,c2) = c1^(α)c2^(1-α)
The marginal rate of substitution (MRS) is given as:
[∂c2/∂u ÷ ∂c1/∂u = -1-α ÷ αc1/c2
The optimization problem can be written as:
Max u(c1, c2) subject to c1 + c2/(1 + r) = (y1 + y2)/(1 + r) + W c1 ≥ 0, c2 ≥ 0
The Lag rangian function of the above optimization problem is given as:
L = c1^(α)c2^(1-α) + λ (W + y1 - c1/(1 + r) - c2/(1 + r) - y2/(1 + r))
The first-order conditions are:
∂L/∂c1 = αc1^(α-1)c2^(1-α) - λ/(1 + r) = 0 ∂L/∂c2 = (1 - α)c1^(α)
c2^(-α) - λ/(1 + r)(1 + r) = 0 ∂L/∂λ = W + y1 - c1/(1 + r) - c2/(1 + r) - y2/(1 + r)
Solving the above three equations, we get:
c1 = (1 + r)α/(1 + r)^(α+1-α) (W + y1/(1 + r)) and c2 = (1 + r)^(1-α)
(1 + r)^(α+1-α) (W + y1/(1 + r))b) Given α = 0.4, W = 100
y1 = 100, y2 = 50 and r = 5%
Putting the values in the given equation for MRS, we get: α = 0.5ii. At the perfect consumption smoothing point,
c1 = c2 = (W + y1 + y2)/(1 + r)
Putting the values in the given equation for MRS, we get:
α = 0.4e)
The budget constraint can be rewritten with the bequest (B) feature as:
c1 + c2/(1 + r) + B = (y1 + y2)/(1 + r) + W.G
To know more about consumption visit:
https://brainly.com/question/31868349
#SPJ11
Ellicott City Manufacturers, Inc. reported net sales of $692,000, and a gross profit margin of 62% in 2020. What is the firm's cost of goods sold? (Round to the nearest dollar).
Ellicott City Manufacturers, Inc. reported net sales of $692,000 and a gross profit margin of 62% in 2020. We can use the formula:
Gross Profit = Net Sales - Cost of Goods Sold
To find the Cost of Goods Sold, we can rearrange the formula to get:
Cost of Goods Sold = Net Sales - Gross Profit Gross
Profit is given as 62% of Net Sales.
We can convert the percentage to a decimal by dividing by
100:Gross Profit = 62/100 * $692,000 = $428,840
We can now substitute the values in the formula:
Cost of Goods Sold = $692,000 - $428,840
Cost of Goods Sold = $263,160
The firm's cost of goods sold is $263,160.
To know more about Manufacturers visit:
https://brainly.com/question/33621434
#SPJ11
If the marginal propensity to save (MPS) is \( 0.07 \), Instructions: Round your responses to two decimal places. a. the marginal propensity to consume (MPC) is b. the multiplier is
The Marginal Propensity to Consume (MPC) and the multiplier can be determined using the following formulas: MPC = 1 - MPS Multiplier = 1/MP Sa. The marginal propensity to consume (MPC) is:
To determine the MPC, we can use the formula: MPC = 1 - MPS where MPS = 0.07MPC = 1 - 0.07MPC = 0.93Therefore, the marginal propensity to consume (MPC) is 0.93.b. The multiplier is: To determine the multiplier, we can use the formula:
Multiplier = 1/MPS where MPS = 0.07Multiplier = 1/0.07Multiplier = 14.29Therefore, the multiplier is 14.29.
Note: The multiplier shows how much a change in autonomous expenditure (investment, government spending, exports - imports) can change the equilibrium level of national income.
In this case, a $1 change in autonomous expenditure will change the equilibrium level of national income by $14.29.
To know more about Propensity visit:
https://brainly.com/question/29035456
#SPJ11
Talbot Industries is considering launching a new product. The new manufacturing equipment will cost $12 million, and production and sales will require an initial $1 million investment in net operating working capital. The company's tax rate is 25%. Enter your answers as a positive values. Enter answers in millions. For example, an answer of $10,550,000 should be entered as 10.55. Round your answers to two decimal places. a. What is the initial investment outlay? $ million b. The company spent and expensed $150,000 on research related to the new project last year. What is the initial investment outlay? $ milion c. Rather than build a new manufacturing facility, the company plans to install the equipment in a buing in building could be sold for $1.5 million after taxes and real estate commissions. What is the initial investment outlay? $ million
a. The initial investment outlay is calculated as follows:
Initial Investment Outlay = Manufacturing Equipment Cost + Initial Working Capital Investment
[tex]Initial Investment Outlay = $12,000,000 + $1,000,000[/tex]
[tex]Initial Investment Outlay = $13,000,000[/tex]
Therefore, the initial investment outlay is[tex]$13 million[/tex].
b. The initial investment outlay, considering [tex]$150,000[/tex] spent and expensed on research related to the new project last year, is calculated as follows:
Initial Investment Outlay = Manufacturing Equipment Cost + Initial Working Capital Investment + Expenses on Research
[tex]Initial Investment Outlay = $12,000,000 + $1,000,000 + ($150,000 × 0.75)[/tex]
[tex]Initial Investment Outlay = $12,000,000 + $1,000,000 + $112,500[/tex]
[tex]Initial Investment Outlay = $13,112,500[/tex]
Therefore, the initial investment outlay, considering [tex]$150,000[/tex]spent and expensed on research related to the new project last year, is [tex]$13.11 million[/tex]. c. The initial investment outlay, considering that the building could be sold for[tex]$1.5 million[/tex] after taxes and real estate commissions, is calculated as follows:
Initial Investment Outlay = Manufacturing Equipment Cost + Initial Working Capital Investment - After-Tax Proceeds from Sale of Old Building
[tex]Initial Investment Outlay = $12,000,000 + $1,000,000 - ($1,500,000 × 0.75)[/tex]
[tex]Initial Investment Outlay = $12,000,000 + $1,000,000 - $1,125,000[/tex]
[tex]Initial Investment Outlay = $11,875,000[/tex]
Therefore, the initial investment outlay, considering that the building could be sold for[tex]$1.5 million[/tex] after taxes and real estate commissions, is [tex]$11.88 million[/tex].
To know more about Investment visit:
https://brainly.com/question/14921083
#SPJ11
According to the profession's ethical standards, which of the following events may justify a departure from GAAP?
I. New legislation
II. conflicting industry practice
III. evolution of a new form of business transaction
A. I and II
B. II and III
C. I and III
D. I, II, and III
D. I, II, and III. According to the profession's ethical standards, which of the following events may justify a departure from GAAP
According to the profession's ethical standards, there are certain events or circumstances that may justify a departure from Generally Accepted Accounting Principles (GAAP). These include new legislation (event I), conflicting industry practice (event II), and the evolution of a new form of business transaction (event III). In such cases, the ethical standards recognize that departures from GAAP may be necessary to accurately represent the financial information or to provide relevant and reliable information to users. However, it is important to note that any departure from GAAP should be disclosed and explained in the financial statements to maintain transparency and accountability.
Learn more about GAAP here:
https://brainly.com/question/20599005
#SPJ11
Imagine you have been assigned knowledge champion in a company, how and where will you establish knowledge management strategy and how ?
As a knowledge champion in a company, establishing a knowledge management strategy is critical to enhancing performance and achieving the goals and objectives of the company. The knowledge management strategy should be a holistic approach that is tailored to meet the needs of the company's stakeholders, customers, and partners.
The following are ways and places where a knowledge management strategy can be established:
1. Identify the needs of the stakeholders: Understanding the knowledge needs of the stakeholders is crucial to establishing a knowledge management strategy that meets their needs. This will involve conducting surveys and focus groups to identify the key areas of knowledge gaps.
2. Develop a knowledge management plan: A knowledge management plan should outline the objectives of the strategy and the steps that will be taken to achieve them. This includes establishing policies and procedures, assigning roles and responsibilities, and identifying resources that will be required to implement the plan.
3. Establish a knowledge management system: A knowledge management system should be established to capture, store, and disseminate knowledge across the organization. This includes developing a database that contains the company's knowledge assets, such as best practices, policies, and procedures.
4. Train employees: Employees should be trained on how to use the knowledge management system to ensure that they can effectively access and use the knowledge assets.
5. Monitor and evaluate the strategy: The knowledge management strategy should be monitored and evaluated on a regular basis to determine its effectiveness and make necessary adjustments.
In conclusion, the knowledge management strategy should be flexible and adaptable to meet the evolving needs of the stakeholders. A successful knowledge management strategy can lead to improved performance, increased innovation, and a competitive advantage.
To know more about establishing visit :
https://brainly.com/question/29503418
#SPJ11
Summarise the six tactics for managing supply shortfalls which are explained in the Sheffi, Y. (2020) - Who Gets What When Supply Chains Are Disrupted? MIT Sloan Management Review
– For each tactic in Sheffi (2020), identify a (one) complementary and/or opposing supply chain driver of competitive advantage in "Fundamentals of supply chain management twelve drivers of competitive advantage" (Mentzer, J. (2004)
– Provide at least one example of a situation (industry type/market segment/product type/supply chain configuration/geographical location/company size/etc.) where the suggested tactics and the complementary and/or opposing driver is suitable and one example where the selected strategies are not suitable. In other words, 1 tactic from Sheffi, Y. 2020 and a driver from Mentzer’s book that support/complement and/or oppose Sheffi’s (2020) suggested tactic; and provide suitability and unsuitability of each of Mentzer’s driver used in the context of industry type/market segment/product type/supply chain configuration/geographical location/company size/etc.) chosen above. Repeated for each of the six tactics and drivers selected.
The six tactics are the following as explained by Sheffi, Y. (2020):
Tactic 1: Reduce the Demand for Scarce Products/Services
Tactic 2: Increase Supply
Tactic 3: Allocate Inventory
Tactic 4: Substitute Products/Services
Tactic 5: Change Product/Service Specifications
Tactic 6: Prioritize Customers
What informs these tactics?Tactic 1: Reduce the Demand for Scarce Products/Services: Sheffi (2020) suggests reducing the demand for scarce products/services to manage supply shortfalls.
Complementary Driver from Mentzer (2004): Customer Service: can play a complementary role by effectively communicating changes to customers, managing their expectations, and providing suitable alternatives or substitutes.
Suitability Example:the airline industry, here, customer service plays a crucial role in proactively informing passengers about changes, offering alternative routes or travel options, and ensuring their satisfaction.
Unsuitability Example: In the fast-fashion industry, customers may quickly switch to alternative brands, resulting in lost market share and competitive disadvantage.
Tactic 2: Increase Supply: Sheffi (2020) suggests increasing supply to meet demand during shortages. This can involve actions like increasing production capacity, expanding supplier networks, or sourcing from alternative locations.
Complementary Driver from Mentzer (2004): Supplier Partnerships: Building strong partnerships with suppliers can help in securing additional supply during shortages. Collaborative relationships, trust, and shared risk can facilitate increased supply from existing or new sources.
Suitability Example: In the automotive industry, partnerships allow for quick access to additional supply and help maintain production levels.
Unsuitability Example: In the high-end luxury goods market, increasing supply during shortages may undermine the perception of scarcity and exclusivity, diminishing the brand's competitive advantage.
Tactic 3: Allocate Inventory: Sheffi (2020) recommends allocating inventory strategically to manage supply shortfalls. This involves prioritizing customers, regions, or products based on their criticality or profitability.
Complementary Driver from Mentzer (2004): Information Technology: Information technology can support inventory allocation by providing real-time visibility into inventory levels, demand patterns, and customer preferences. Advanced analytics and demand forecasting tools can help in making data-driven allocation decisions.
Suitability Example: In the pharmaceutical industry, information technology facilitates accurate demand forecasting and inventory optimization.
Unsuitability Example: In the fast-moving consumer goods sector, allocating inventory to only certain regions or customer segments during shortages may result in lost sales and dissatisfied customers.
Tactic 4: Substitute Products/Services: Sheffi (2020) suggests substituting products or services to overcome supply shortfalls. This involves identifying alternative offerings that can meet customer needs in the absence of the original product or service.
Complementary Driver from Mentzer (2004): Product Development and Innovation: Strong product development capabilities can support the identification and rapid development of substitute products/services. Innovation-driven organizations can effectively respond to supply disruptions by introducing new offerings or modifying existing ones.
Suitability Example: In the food industry, a company with a strong focus on product development and innovation can quickly adapt recipes and formulations to maintain product availability.
Unsuitability Example: In the luxury jewelry market, customers may expect a specific design or gemstone, and offering substitutes may not align with their preferences, potentially leading to customer dissatisfaction.
Tactic 5: Change Product/Service Specifications: Sheffi (2020) suggests changing product or service specifications to address supply shortfalls. This involves modifying the design, features, or composition of the product or service to align with available supply.
Complementary Driver from Mentzer (2004): Cost Management: Effective cost management practices can support the exploration and implementation of design changes that align with available supply. Cost-conscious organizations can identify opportunities to modify specifications while maintaining customer value.
Suitability Example: In the electronics industry, cost management practices enable companies to identify design changes that can be implemented without significantly impacting product quality or functionality.
Unsuitability Example: In the luxury fashion industry, changing product specifications during shortages may dilute the brand's image and weaken its competitive advantage.
learn more about Increase Supply: https://brainly.com/question/14798588
#SPJ4
Sales discount on credit sales can benefit a seller through earlier cash receipts and reduced collection efforts. Many sales discounts are favorable to the buyer, and many buyers will take advantage of them. New revenue recognition rules require that sellers report sales net of expected sales discounts. These rules apply to annual periods of public entities beginning after December 15, 2017 (earlier use is permitted for periods beginning after December 15, 2016).
Sales discount on credit sales can benefit a seller through earlier cash receipts and reduced collection efforts. Many sales discounts are favorable to the buyer, and many buyers will take advantage of them.
New revenue recognition rules require that sellers report sales net of expected sales discounts. These rules apply to annual periods of public entities beginning after December 15, 2017 (earlier use is permitted for periods beginning after December 15, 2016).Sales discounts on credit sales can help a seller benefit by allowing them to receive payments more quickly than they would without the discount, which in turn allows them to reduce collection efforts. However, many sales discounts are actually more favorable to buyers, who may take advantage of these discounts. Consequently, the revenue recognition rules have been changed in order to require sellers to report their sales net of expected sales discounts.In this way, the amount of revenue that a seller receives from their sales can be calculated in a more accurate manner. These rules apply to annual periods of public entities beginning after December 15, 2017, though earlier use is permitted for periods beginning after December 15, 2016.
To learn more about seller
https://brainly.com/question/13303534
#SPJ11
i) What is the benefit of pooling cross sections over time for regression analysis? Which
feature does allow this operation? In that case, are regression assumptions violated?
ii) We intend to analyze the effect of minimum wage adjustment on employment in
January of 2022. Higher minimum wages reduce employment. However, we haven't
had this data yet. In this case, we find similar period which had been occurred in 2016.
Please write an equation for this problem which can be taken as an event study
showing how two cross-sectional data sets, collected before and after the occurrence
of an event, can be used to determine the effect on economic outcomes (Policy
evaluation analysis). Which tools can be used? Express variables clearly.
The event study equation for policy evaluation analyzes the effect of minimum wage adjustment on employment using two cross-sectional datasets before and after the event.
In policy evaluation, an event study equation is used to examine the impact of minimum wage adjustments on employment. By comparing two cross-sectional datasets collected before and after the event, the equation estimates the effect on economic outcomes. The equation includes variables such as individual fixed effects, post-event period indicators, treatment indicators, control variables, and error terms. Tools like fixed effects regression or difference-in-differences analysis can be applied to estimate the causal effect and evaluate the policy's impact on employment.
Learn more about minimum wage here:
https://brainly.com/question/20819430
#SPJ11
The rules governing contingent fee arrangements do not permit a tax practitioner to charge a contingent fee for rendering:
a. Tax planning services
b. Payroll tax processing services
c. The preparation of a request for a refund of previously overpaid taxes
d. Taxpayer advocacy in an IRS administrative hearing
The rules governing contingent fee arrangements do not permit a tax practitioner to charge a contingent fee for rendering tax planning services.
Contingent fee arrangements refer to a fee structure where the payment to the tax practitioner is dependent on a specific outcome or result. These arrangements are generally prohibited for certain types of services in the field of taxation to maintain the integrity and objectivity of the tax system.
Tax planning services involve providing advice and assistance to taxpayers in optimizing their tax positions by utilizing legal strategies and provisions within the tax laws. Since tax planning services involve proactive and strategic advice, it is not permitted to charge a contingent fee for such services.
On the other hand, payroll tax processing services, the preparation of a request for a refund of previously overpaid taxes, and taxpayer advocacy in an IRS administrative hearing do not fall under the prohibition of contingent fee arrangements. Contingent fees can be charged for these types of services, as they do not involve the provision of tax planning advice.
It is important for tax practitioners to adhere to these rules and maintain ethical standards to ensure the proper functioning of the tax system and maintain the trust of their clients.
To learn more about, Tax, click here, https://brainly.com/question/31851456
#SPJ11
What is quantitative easing? It is an example of contractionary monetary policy where the central bank sells longer-term assets that are not normally sold to commercial banks. It is an example of expansionary monetary policy where the central bank sells longer-term assets that are not normally sold to commercial banks. It is an example of expansionary monetary policy where the central bank purchases longer-term assets that are not normally purchased from commercial banks. It is an example of contractionary monetary policy where the central bank purchases longer-term assets that are not normally purchased from commercial banks.
Quantitative easing is an example of expansionary monetary policy where the central bank purchases longer-term assets that are not normally purchased from commercial banks.
What is quantitative easing?Quantitative easing (QE) is a monetary policy where a central bank purchases securities, typically longer-term government bonds, from commercial banks and other financial institutions, in order to increase the supply of money and reduce interest rates. This results in an increase in the money supply, which makes it easier for consumers and businesses to borrow money in order to increase spending, which in turn, can help stimulate economic growth.
This is an example of expansionary monetary policy as it helps to expand the money supply. When interest rates are low, banks are more willing to lend, which can lead to increased spending by businesses and consumers. This increased spending can help to stimulate economic growth. Therefore, the central bank purchases longer-term assets that are not normally purchased from commercial banks in order to expand the money supply and increase economic activity.
Learn more about Quantitative easing (QE): https://brainly.com/question/32569162
#SPJ11
Your paper should follow this outline:
Identify your chosen scenario and then identify and describe the ethical principles in conflict (e.g., autonomy, beneficence).
Provide recommendations for management of the ethical dilemma, including the possible choices and resulting consequences as well as who to engage in the decision-making.
Summarize the issues and recommendations in your final paragraph.
topic: Mr. S has severe mobility issues due to paraplegia and some speech problems, but he is mentally intact. He wants to leave the facility against medical advice to pursue independent activities.
The scenario presents a case of conflict between the ethical principles of autonomy and beneficence. Mr. S has severe mobility issues due to paraplegia and speech problems, but he is mentally stable. He intends to leave the facility against medical advice and engage in independent activities. The nursing home staff is concerned about his safety outside the facility. Hence, this ethical dilemma demands appropriate resolution strategies.
The following recommendations can be made:Autonomy entails an individual's capacity to make their own decisions, even when those choices are not in their best interests. Mr. S should be allowed to pursue independent activities if he wishes to do so. On the other hand, beneficence implies that healthcare professionals should act in the best interest of the patient, and prioritize their safety and wellbeing. The nursing home staff may be hesitant to let Mr. S leave the facility due to concerns regarding his safety and protection. Hence, the ethical conflict arises.As a result, the nursing home staff should have a conversation with Mr. S, and try to persuade him to remain in the facility. They can present Mr. S with a list of leisure activities that he can engage in within the facility. For instance, the staff can provide him with a list of recreational activities that he can pursue within the premises. If he still insists on leaving the facility, then the staff can have a discussion with him regarding safety protocols. For instance, they can provide him with a list of emergency numbers that he can use in case of an emergency. The nursing home staff should also collaborate with Mr. S's family members and involve them in decision-making.Finally, in conclusion, Mr. S's right to autonomy must be respected. However, his safety and well-being should be prioritized. Therefore, the nursing home staff should engage in a dialogue with Mr. S to determine his preferences and provide him with recommendations that guarantee his safety and well-being.
To know more about principles of autonomy and beneficence visit:
https://brainly.com/question/32220730
#SPJ11
If you deposit $1,750 at the end of each month for the next 10 years into an account paying 5.6% per year, how much will you have in the account in 16 years?
*Show work, not excel function for full credit*
We are given a present value of $1,750 which is deposited at the end of each month for the next 10 years into an account paying 5.6% per year, and we are required to find how much will be in the account in 16 years.
Since the amount is deposited at the end of each month, we can convert the time from years to months: 10 years x 12 months = 120 months. 16 years x 12 months = 192 months.
The interest rate is given as 5.6% per year, which we convert to monthly by dividing by 12:5.6% ÷ 12 = 0.4666666667%
The monthly deposit, present value, and interest rate can now be used in the formula for future value of an annuity:
[tex]$FV = \frac{PMT[(1+r)^n-1]}{r}$[/tex]
where [tex]PMT = $1,750$[/tex], monthly depositr = 0.4666666667%$, monthly interest rate, andn = 192, number of months.
To know more about deposited visit:
https://brainly.com/question/32783793
#SPJ11
BTL Company manufactures speaker systems. The company estimated there will be 49,500 units in inventory at the beginning of December 2019. BTL Company wants to have half of that amount in its inventory at the end of December. Based on the forecasted sales, 138, 100 speaker systems will be sold in the month of December Do not enter dollar signs or commas in the input boxes Use the negative sign for negative values or values that must be subtracted, a) Determine the number of speakers to be produced in December n Budgeted Production Units - b) Prepare a production budget. BTL Company Production Budget Month Ending December 31, 2019 Budgeted Sales Budgeted Ending Inventory Budgeted Beginning Inventory Budgeted Production Units
113,350 speaker systems would be the budgeted production units for BTL Company in December 2019. We must compute the budgeted production units by taking into account the projected sales as well as the intended ending and beginning inventory levels in order to establish the number of speakers to be manufactured in December.
given information: - 49,500 units are predicted to be in the initial inventory. Desired ending inventory: 24,750 units, which is equal to 50% of the anticipated beginning inventory (49,500/2) Units sold within budget: 138,100 We can use the following calculation to determine the budgeted production units: Budgeted Production Units are calculated as follows: Budgeted Sales + Desired Ending Inventory - Beginning Inventory Putting the values in the formula as substitutes: 138,100 + 24,750 - 49,500 are the budgeted production units. 113,350 are the budgeted production units The BTL Company's production budget for the month of December 2019 would consist of the the following details: Sales as planned: 138,100 units Ending Inventory Budgeted: 24,750 units Starting inventory budgeted at 49,500 units Units of Production Budgeted: 113,350
learn more about account here:
https://brainly.com/question/30977839
#SPJ11
Mountain Snow Sports, Inc. is trying to determine the optimal order quantity for snow boards for the next twelve months. Annual sales are expected to be 1,000,000 units at a retail price of $400 each. The cost of carrying snow boards is $80 per year. Studies show that it costs Mountain Snow $250 to prepare and receive an order. What is the EOQ?
EOQ stands for Economic Order Quantity, which is the quantity of inventory that minimizes the total cost of inventory management for a business.
In other words, it is the order quantity that reduces the total cost of ordering and carrying inventory to its lowest possible amount.
The formula to calculate the EOQ is:
EOQ = sqrt((2DS)/H)
where: D = annual demand
S = ordering cost
H = holding cost per unit per year Mountain Snow Sports, Inc. wants to determine the optimal order quantity for snowboards for the next twelve months given that annual sales are expected to be 1,000,000 units at a retail price of $400 each.
The cost of carrying snowboards is $80 per year, and it costs Mountain Snow $250 to prepare and receive an order. Using the formula above, we can calculate the EOQ:
EOQ = sqrt((2 x 1,000,000 x $250)/$80)
EOQ = sqrt(5,000,000)
$80 = sqrt(62,500)$80 = 250
The EOQ for Mountain Snow Sports, Inc. is 250 snowboards.
To know more about Quantity visit:
https://brainly.com/question/14581760
#SPJ11
aapi cesare organizational specific plans that have legal origin and basis. a)true b)false
The statement "Aapi cesare organizational specific plans that have legal origin and basis" is unclear and seems to contain a typographical error or is not a complete sentence.
However, based on the given text, it is not possible to determine whether the statement is true or false. If the intended statement is "Organizational specific plans have a legal origin and basis," the answer would depend on the specific context and nature of the plans in question. Some organizational plans may have legal origins and bases, such as policies and procedures that comply with laws and regulations. For example, employment policies may be based on labor laws, and financial plans may adhere to accounting regulation. However, not all organizational plans necessarily have a legal origin and basis. Many plans, such as strategic plans, operational plans, or marketing plans, are developed based on internal considerations, industry best practices, or organizational goals, rather than being legally mandated.
Learn more about typographical here:
https://brainly.com/question/29764663
#SPJ11
Which of the following is not true for price-maker assumption: Applies to duopoly. Results in downward-sloping demand curve. Applies to monopolistic competition. Does not apply to any of the competitive market structures. Applies to market structures such as monopoly and oligopoly. Question 3 A firm will possibly have the highest market power in the following industry structure: Oligopoly. Perfect competition. Monopoly. Duopoly. Monopolistic competition.
Price-maker assumption refers to a scenario where a company or a firm enjoys the power to set the prices of its products and services in the market.
In other words, the price maker assumption means that the firm or a company can influence the market price by manipulating the supply or demand of the product not apply to any of the competitive market structures.
The given statement is not true for price-maker assumption. The market power of a firm refers to the ability of a company to influence the price and supply of goods or services. higher than the market prices to earn more profit.
To know more about scenario visit:
https://brainly.com/question/32646825
#SPJ11
When you're preparing a formal work plan, include a ________ to clarify the problem you
face and a ________ to describe what you plan to accomplish.
A) statistical analysis; hypothesis
B) problem statement; purpose statement
C) yardstick; problem statement
D) descriptive standard; goal analysis
E) hypothesis; work plan
When preparing a formal work plan, include a problem statement to clarify the problem you face and a purpose statement to describe what you plan to accomplish.
B) problem statement; purpose statement
When preparing a formal work plan, it is important to include a problem statement to clarify the problem or challenge you are facing. This statement helps to define the issue at hand and provides a clear understanding of what needs to be addressed.
Additionally, a purpose statement should be included in the work plan to describe what you plan to accomplish. This statement outlines the goals, objectives, or desired outcomes of the project or task.
Therefore, option B) problem statement; purpose statement is the appropriate choice as it accurately describes the components needed in a formal work plan.
learn more about formal work plan here:
https://brainly.com/question/32239539
#SPJ11
Agarwal Technologies was founded 10 years ago. It has been profitable for the last 5 years, but it has needed all of its earnings to support growth and thus has never paid a dividend. Management has indicated that it plans to pay a 50.25 dividend 3 years from today, then to increase it at a relatively rapid rate for 2 years, and then to increase it at a constant rate of 8.00% thereafter. Management's forecast of the future dividend stream, along with the forecasted growth rates, is shown below. Assuming a required return of 11.00%, what is your estimate of the stock's current value? Use the dividend values provided in the table below for your calculations. Do not round your intermediate calculations. $12.23 $11.28 $13.65 $11.87 $13.30
Agarwal Technologies is a profitable company for the last five years but has not paid a dividend. Management plans to pay a dividend of $50.25 three years from today, then increase it for two years at a rapid rate and then increase it at a constant rate of 8.00%.
The present value of the dividends is calculated as follows: $50.25 ÷ (1 + 0.11)³ = $34.28. The future value of dividends is calculated as follows: Year 1: $50.25 × (1 + 0.20) = $60.30 Year 2: $60.30 × (1 + 0.25) = $75.38 Year 3: $75.38 × (1 + 0.08) = $81.37 Year 4: $81.37 × (1 + 0.08) = $87.85 Year 5: $87.85 × (1 + 0.08) = $94.77
The present value of future dividends is calculated as follows: PV = $60.30 ÷ (1 + 0.11)¹ + $75.38 ÷ (1 + 0.11)² + $81.37 ÷ (1 + 0.11)³ + $87.85 ÷ (1 + 0.11)⁴ + $94.77 ÷ (1 + 0.11)⁵PV = $49.19Total present value of dividends is $34.28 + $49.19 = $83.47 Therefore, the stock's current value is $83.47.
To know more about profitable visit:
https://brainly.com/question/33428821
#SPJ11
In Countryland, there are only 3 goods: coffees, books, and chairs. The table below shows the prices and quantities produced of these goods in 2019, and 2020: a) Calculate the nominal GDP in 2019 and 2020 for Countryland. (5 marks) b) Calculate the real GDP in both years for this economy using 2019 as the base year. Compare the growth rate of nominal GDP and real GDP. Explain. (5 marks) c) Given your answers in a) and b) calculate the GDP deflator in both years and the inflation rate.
Given the information of prices and quantities produced in 2019 and 2020, let us calculate the nominal GDP for both the years. Here is the data given:
Year | Good | Price | Quantity Produced2019 | Coffee | 2.50 | 40 2019 | Books | 7.50 | 20 2019 | Chairs | 25 | 102020 | Coffee | 3.50 | 60 2020 | Books | 10 | 30 2020 | Chairs | 30 | 12
a) Nominal GDP Calculation : Nominal GDP = (Price of Good * Quantity of Good) + (Price of Good * Quantity of Good) + (Price of Good * Quantity of Good)
Nominal GDP 2019 = (2.50 * 40) + (7.50 * 20) + (25 * 10)
Nominal GDP 2019 = $1750
Nominal GDP 2020 = (3.50 * 60) + (10 * 30) + (30 * 12)
Nominal GDP 2020 = $1890
b) Real GDP Calculation : Real GDP = (Price of Good in the Base Year * Quantity of Good) + (Price of Good in the Base Year * Quantity of Good) + (Price of Good in the Base Year * Quantity of Good)
Real GDP 2019 = (2.50 * 40) + (7.50 * 20) + (25 * 10)
Real GDP 2019 = $1750
Real GDP 2020 = (2.50 * 60) + (7.50 * 30) + (25 * 12)
Real GDP 2020 = $1875
Growth Rate of Nominal GDP = [(Nominal GDP of 2020 - Nominal GDP of 2019)/Nominal GDP of 2019] * 100
Growth Rate of Nominal GDP = [(1890 - 1750)/1750] * 100
Growth Rate of Nominal GDP = 8%
Growth Rate of Real GDP = [(Real GDP of 2020 - Real GDP of 2019)/Real GDP of 2019] * 100
Growth Rate of Real GDP = [(1875 - 1750)/1750] * 100
Growth Rate of Real GDP = 7.14%
The growth rate of Nominal GDP is more than the growth rate of Real GDP. This is because the price levels have increased between the two years, thus showing an increase in Nominal GDP but the increase in Real GDP is relatively low due to the adjustment of price levels with the base year.
c) Calculation of GDP Deflator : GDP Deflator = (Nominal GDP/Real GDP) * 100
GDP Deflator 2019 = (1750/1750) * 100
GDP Deflator 2019 = 100
GDP Deflator 2020 = (1890/1875) * 100
GDP Deflator 2020 = 101.6
Inflation Rate = [(GDP Deflator of 2020 - GDP Deflator of 2019)/GDP Deflator of 2019] * 100
Inflation Rate = [(101.6 - 100)/100] * 100
Inflation Rate = 1.6%
Thus, the GDP Deflator has increased between the two years and hence there is a positive inflation rate.
To know more about information visit :
https://brainly.com/question/33427978
#SPJ11
Assume an American firm takes a long position on British Pound call options. The premium is $0.05, and the strike price is $1.45. When the firm executed the option, they were able to save $150,000 total. If the total contracts were enough to buy 560,000 pounds, what was the asking price of the pound in US dollars?
The premium on the British Pound call options taken by the American firm is 0.05, and the strike price is 1.45. The firm saved 150,000 in total when they executed the option, and the total contracts were enough to buy 560,000 pounds.
Therefore, the total cost of the contracts can be calculated as follows:560,000 / 1.45 = 386,206.89Thus, the firm paid a premium of 0.05 per pound, which was equal to 28,000 (0.05 x 560,000). As a result, the firm was able to buy 560,000 pounds for 358,206.89 (386,206.89 - 28,000).
The asking price of the pound in US dollars can be found by dividing the total cost of the contracts by the number of pounds purchased: 358,206.89 / 560,000 = 0.64 per pound (rounded to two decimal places).Therefore, the asking price of the pound in US dollars is 0.64 per pound.
To know more about price visit:
https://brainly.com/question/19091385
#SPJ11
provide a list of employees and their phone numbers. put the employee names together so that the list is last name, first name (with the two names together in a single field and a comma and space between the names).
To create a list of employees and their phone numbers with the employee names in the format "last name, first name," you can follow these steps.
Gather the necessary information: Make sure you have a list of employees' names and their corresponding phone numbers. Format the names: To create the desired format of "last name, first name," you'll need to separate the first and last names and rearrange them accordingly.
Combine the names and add a comma and space: Once you have the first and last names separated, merge them together with a comma and a space between them.Create a list: Use the formatted names and their corresponding phone numbers to create a list, pairing each employee's name with their phone number. You can format the list in a way that makes it easy to read, such as by using a table or by listing each employee on a separate line.
To know more about employees visit:
https://brainly.com/question/32914076
#SPJ11
During the COVID-19 pandemic, the Australian government said China was responsible for the outbreak of the disease. The Chinese government was offended and decided to reduce the quantity of coal China imported from Australia. This resulted in a shortage of coal, needed to run energy power plants. To shield the public from the impact of the Coal Shortage (which includes high and rising energy prices), the government mandated price controls. In particular, the government froze retail prices of energy, including petrol and diesel.
a) What type of price control has China imposed, according to the information above? [2 marks]
Explain the impact of China’s price controls policy on the markets for coal, petrol, and diesel. Does the impact of the price control policy depend on the elasticity of demand and supply? Illustrate your answer with the demand and supply diagram. [5 marks]
b) Explain how China’s price controls have changed consumer surplus, producer surplus, total surplus, and the deadweight loss in the markets for coal, petrol, and diesel. [8 marks]
c) Is the outcome of China’s price control policy fair and efficient? Critically discuss. [5 marks]
According to the information provided above, the Chinese government imposed a retail price freeze of energy which included petrol and diesel.
Hence, the type of price control China has imposed is known as a price freeze or price ceiling.
This is a government-imposed limit on how high a price can be charged on a particular good or service.
The impact of China’s price controls policy on the markets for coal, petrol, and diesel is as follows:
Impact on coal market:
As the Chinese government reduced the quantity of coal China imported from Australia,
there was a shortage of coal which led to an increase in the price of coal.
However, with the implementation of price controls, the prices were maintained below the equilibrium level.
Hence, there was a decline in the quantity of coal supplied, and also, consumers' demand for coal increased leading to an increase in the quantity of coal demanded.
Impact on petrol and diesel markets:
With the imposition of price controls by the Chinese government,
the prices of petrol and diesel were maintained below the equilibrium level.
This led to an increase in the quantity of petrol and diesel demanded by the consumers and a decrease in the quantity of petrol and diesel supplied by the producers.
Yes, the impact of the price control policy depends on the elasticity of demand and supply.
The diagram below illustrates the effect of the price controls on the coal, petrol, and diesel markets.
The imposition of price controls by the Chinese government has changed the consumer surplus, producer surplus, total surplus,
and the deadweight loss in the markets for coal, petrol, and diesel as follows:
Coal market:
The imposition of price controls has resulted in a shortage of coal which increased the price of coal,
but the prices were maintained below the equilibrium level.
To know more about energy visit:
https://brainly.com/question/1932868
#SPJ11
Xavier put $50000 down on his first condo. He borrowed the rest from his parents at an interest rate of 3.5% compounded weekly. For the first 10 years, he mady weekly mortgage payments of $300 before increasing the amount he repaid them to $415 per week for seven more years. (a) What was the purchase price of the property? (b) How much interest did Xavier pay his parents?
Roth individual retirement accounts (IRAs) are taxed neither when you make contributions nor when you make withdrawals.
Roth IRAs offer a unique tax advantage compared to traditional IRAs. Contributions to a Roth IRA are made with after-tax dollars, meaning you've already paid taxes on the income used for contributions. As a result, you do not receive an immediate tax deduction for Roth IRA contributions. However, the benefit comes during retirement when you make qualified withdrawals from the account. Withdrawals from a Roth IRA are typically tax-free, including both the contributions and any investment gains, as long as certain conditions are met. This tax-free treatment applies to both the initial contributions and the accumulated earnings.This tax structure makes Roth IRAs an attractive option for individuals who anticipate being in a higher tax bracket during retirement or those who prefer the flexibility of tax-free withdrawals. It allows for potential tax-free growth over time and provides a source of tax-free income in retirement.
To learn more about individual retirement accounts:
https://brainly.com/question/29549007
#SPJ11
