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The managers of Firm A recommend that Firm A purchase Firm B because the purchase will diversify the business of Firm A. Diversification of risks is a desirable strategy for indivi
How can we define the real wage as nominal wage We define real wage as nominal wage divided by a price index (typically CPI). In the illustration above, your real wage was 20 i
Determine the exchange rate When a currency is freely floating, the central bank doesn't have to set monetary policy to alter the external value of the currency unless instruct
Gas Guzzler Motors is one of three major auto producers. It is currently producing 6,000 cars a day, and selling them at a price of $10,000 each. Its marketing department tells it
The circular flow of income in a simple economy where all income is consumed The operation of forces in an economy can be expressed in the form of a circular flow of incomes a
Capitalism is the dominant, most used form of government there is in the globe today. Presently, over 80% of countries use capitalism and a free market economy.
Cowboy Corporation is estimating its WACC. The firm's debt structure contains: (1) 30,100 long-term bonds with an 8.1% coupon, paid semiannually, a 10 years-to-maturity, and a $10
Aggregate Consumption This is the aggregate of all expenditures on current consumption goods and services i.e. those which are consumed during the period. Living standards are
what are the advantages and disadvantages of unemployment
State in brief the Nominal wage level In macroeconomics, we are generally not interested in the wage for a specific individual though in the average wage for all employed indi
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