Steel between the united states and germany

Assignment Help Business Economics
Reference no: EM136312

Q. Suppose that a ton of steel currently sells for $2,000in United States, and for €2,000 in Germany. The exchange rate is €1 = $1.50, and it costs $500 to ship a ton of steel between the United States and Germany.

a. Can you get rich in this market? Why or why not? Explain.
b.In long run, what would you expect to happen to the price of steelin U.S. and Germany? What would be the price differential?
c. Assume that prices are fixed. According to Purchasing Power Parity Theory, how will exchange rates adjust?

Reference no: EM136312

Questions Cloud

Circular flow relates to current economic situations : Explain a way that your family interactsin factor market and a way that it interactsin products market. Discuss how circular flow relates to current economic situations.
Discourage twinkie consumption by raising the price : School tries to discourage Twinkie consumption by raising the price to $.40, by how much will Matt's mother have to increase his lunch allowance to provide him.
Gun control laws for the states : You will need to determine how you will measure strict gun control laws for the states and to define what types of crimes will make up the crime rate.
Estimate the true population mean : Suppose we randomly poll 500 Americans and ask them whether they believe that the parents are involved. What is the distribution of the sample mean.
Steel between the united states and germany : In long run, what would you expect to happen to the price of steelin U.S. and Germany. What would be the price differential.
Equilibrium value of consumption and investment : Solve for equilibrium real output and also solve for the equilibrium interest rate.
Equilibrium value of consumption and investment : Solve for the equilibrium interest rate. Solve for equilibrium value of consumption and investment.
Rocky mountain region visited yellowstone park : Study by the National Park Service revealed that 50 percent of vacationers going to the Rocky Mountain region visited Yellowstone Park, 40 percent visit the Tetons, and 35 percent visit both.
Trade balance between china and the u.s. : Consider a couple's decision about how many children to have.Assume that over a lifetime a couple has 200000 hours of time either work or raise children.The wage is RM10 per hour.Raising a child takes 20000 hours of time.

Reviews

Write a Review

Business Economics Questions & Answers

  Factors that affect pay differentials

What are the factors that affect pay differentials? How does each factor increase or decrease relative wages?

  Tootsie roll company to analyze their production process

One day you realize you're tired of smelling like refried beans all the time and begin thinking about starting your own business. After doing some investigation you decide to spend 15 hours per week running a photocopy service in your dorm.

  Why do celebrity icons receive such widespread attention

Why do celebrity icons receive such widespread attention and adulation

  Sketch the extensive form of the game

Sketch the extensive form of the game, carefully labelling the players that move and the actions they have available

  Factors determine the demand for british pounds

Why all the balance of payments accounts be in surplus. What factors determine the demand for British pounds in foreign exchange markets.

  Sustainable development

What steps can a government take to ensure that sustainable development is always considered in assessing which major economic projects or investment proposals to accept.

  China has continued to lag in information technologies

China has continued to lag well behind the rest of the world in information technologies

  Long-run atc curve is u-shaped and intersects the long-run

For every firm in group B , long-run ATC curve is U-shaped and intersects the long-run MC curve when ATC = 10 and output is 6.

  Tax revenue

The Australian government administers two programs that affect the market for cigarettes

  Financial performance of the company

Evaluate the financial performance of the company using the information providedin scenario. Consider all the key drivers of performance, such as company profit or loss.

  Two alternative recreation projects

A county is considering using a piece of park land for one of two alternative recreation projects.

  Perfectly competitive firm

If the market price of the product is 270, how much output should the firm produce in order to maximize profit. How much profit will this firm make.

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd