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Flexible exchange rate system:
A country is linked to other countries through two broad channels: trade flows andfinancial flows. Trade flows pertain to movement of goods and services betweencountries and thus facilitate exchange of products between countries, commonlyknown as exports and imports. When countries produce more than what they candomestically consume, they export. Similarly, when countries consume more than whatthey can produce, they import.Thus, there would be balancing of production surpluses and deficit when trade takesplace between countries.The implications of the above formulations, (i.e., trade flows) on the components ofaggregate demand (AD) would be to include net exports [i.e., exports(X) - imports(M)] such that
AD = C + I + G + X - M
where,C: Consumption
I:Investment
G: Government Expenditure
S: SavingsThis would mean that
“Ledger is said to be the principal book entry and the transactions can even be directly entered into the ledger account.” Elaborate and explain why journal is necessary.
Is low savings a problem? Countries along with low savings are caught into the vicious circle of poverty: there low savings, implies low investment low productivity therefore
1. Imagine that two countries, Richland and Poorland can produce just two goods, computers and coal. Assume that for a given amount of land and capital, the output of these two pro
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Quantitative demand for watermelons = 50-3P(wm) - 20P(hd) + 10 P(sc) + 0.001(income) P(wm) = $4.00 P(hd) = $3.00 P(sc) = $2.00 Income = $40,000 Quantity supply of watermelons = 2
Question 1: (a) Discuss the relationship that exists between financial capital and physical capital. (b) Analyse how a stock-market crash would drive an economy into a
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(a) Name three types of government interventions and 3 economic factors affecting the business environment and with given example explain how these affect the business environment.
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