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Explain how a country can peg (fix) its currency to another currency.
Explanation of a pegged/fixed currency should centre on how the central bank uses the currency market mechanism - buying and selling its own currency - to set the exchange rate in the LR. Using an S/D diagram, show how the corridor of the exchange rate can be set and then as the central bank can intervene to prevent the exchange rate from exceeding the floor or ceiling.
Individual Demand Substitutes and Complements 1) The two goods are considered substitutes if an increase (decrease) in price of one lead to an increase (decrease) in quant
concept of supply and the factors that affect the supply
what is the theory of second best? prove the theorem with the help of a diagram.
define perspective of managerial economics.
Risk Neutral - A person is a risk neutral if they show no preference between certain, and an uncertain income with the same expected value.
what is the buying power of one''s income?
Equity: The proportion of a company's total assets which are "owned" outright by the company's owners. A company's equity is equivalent to its value less its debt owed to bankers,
Measures used to restrict International Trade: These are taxes imposed on traded commodities as they cross national boarders. These are two main types of tariffs. An import ta
Stock of durable goods on hand: If the economy has enjoyed an extended period of prosperity, consumers may find themselves well supplied with various durable goods, e.g. cars,
d
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