Suppose that the home country’s major trading partner imposes an import tariff which reduces the home exports. Use the IS-LM-FX model to illustrate the effects of this shock for the following different environments. Draw the IS-LM-FX figures and clearly indicate the initial and the new equilibria. Denote shifts in curves by arrows. Denote the initial equilibrium by point A, and the new equilibrium by point B, in each diagram.
For each case, state the effect of the shock on the following variables (increase, decrease, no change, or ambiguous, with a brief reason): Y, i, E, C, I, and TB.
a. Assume that the central bank allows the exchange rate to float.
b. Assume that the central bank responds in order to maintain a fixed exchange rate.

Answers

Answer 1

a. In the case where the central bank allows the exchange rate to float, the effects of the import tariff shock can be illustrated using the IS-LM-FX model.

Effects on variables:

Y (output): Decrease. The import tariff reduces home exports, leading to a decrease in aggregate demand. This shifts the IS curve to the left, resulting in a lower level of output.i (interest rate): No change. The shock does not directly impact the interest rate.E (exchange rate): Depreciation. As home exports decrease, there is a decrease in demand for the home currency. This leads to a depreciation of the home currency in the foreign exchange market, indicated by a downward shift in the FX curve.C (consumption): Decrease. The decrease in output and potential income reduction may lead to a decrease in consumption.I (investment): Decrease. The decrease in output and uncertainty from the import tariff may lead to a decrease in investment.TB (trade balance): Ambiguous. The effect on the trade balance depends on the relative magnitudes of the changes in exports and imports due to the import tariff.

The initial equilibrium (point A) is characterized by the intersection of the initial IS and LM curves. After the import tariff shock, the new equilibrium (point B) is characterized by the intersection of the shifted IS and LM curves, reflecting the changes in output, interest rates, and exchange rates.

b. In the case where the central bank responds to maintain a fixed exchange rate, the effects of the import tariff shock can also be illustrated using the IS-LM-FX model.

Effects on variables:

Y (output): Decrease. The import tariff reduces home exports, leading to a decrease in aggregate demand. This shifts the IS curve to the left, resulting in a lower level of output.i (interest rate): Decrease. To maintain the fixed exchange rate, the central bank may reduce interest rates to stimulate investment and offset the decline in output.E (exchange rate): No change. The central bank intervenes in the foreign exchange market to maintain the fixed exchange rate, preventing any depreciation.C (consumption): Decrease. The decrease in output and potential income reduction may lead to a decrease in consumption.I (investment): Increase. The central bank's response to lower interest rates aims to stimulate investment and counter the decrease in output.TB (trade balance): Ambiguous. The effect on the trade balance depends on the relative magnitudes of the changes in exports and imports due to the import tariff, as well as the impact of changes in interest rates and investment on imports and exports.

The initial equilibrium (point A) is characterized by the intersection of the initial IS and LM curves. After the import tariff shock, the new equilibrium (point B) is characterized by the intersection of the shifted IS and LM curves, reflecting the changes in output, interest rates, and the central bank's intervention to maintain the fixed exchange rate.

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Related Questions

What capability do smartphones have that telephones with earlier technology lacked?
wireless technology
data services
mobility
voice transmissions

Answers

Answer

data service

Explanation:

edge

Look at the circular flow diagram. Choose and define an environmental issue. Using the diagram as a guide, explain how the environmental issue you chose affects the relationship between household and government.

Look at the circular flow diagram. Choose and define an environmental issue. Using the diagram as a guide,

Answers

Answer:

Household and government are related to each other in terms of economic unit. Household pay taxes to government and then government use that money for the people. Household earn the money by working in firms or by running their own business.

Environmental issues such as air pollution can affect the relationship between household and government. Popleuses their own transport to go to firms and the number of vehicles are increasing day by day which causes air pollution.

The government can form policies against personal transport and convince people to use public transport which will be beneficial for government as government will directly get money from household.

In terms of an economic unit, the household and the government are linked. Households pay taxes to the government, which are subsequently used to benefit the people.

Households generate money through working in businesses or starting their own.

Capital, labor, land, and entrepreneurship are all components of the factor market. Business—look for ways to minimize expenses and pollute the environment (land), for their employees (labor) to avoid disease, and; For future capital investment in cleaner manufacturing.

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In which type of economy is a business owner most likely to benefit from free enterprise?

Answers

probably would be a democratic system

hope this helps

Answer:

Sole proprietorship

Explanation:

I’m not 100% sure but it’s a sole individual business

The following information relates to Snowbird Corporation: Sales at the break-even point ......... $312,500 Total fixed expenses ...................... $250,000 Net operating income .................... $150,000 What is Snowbird's margin of safety? A) $62,500 B) $187,500 C) $100,000 D) $212,500 Answer: B

Answers

D) $212,500, The margin of safety is the amount by which sales can drop before a Corporation starts to lose money. The safety margin for Snowbird in this situation is $212,500.

The margin of safety for Snowbird is determined as follows:

Sales at the break-even threshold are calculated as follows: $312,500 / (1 - contribution margin ratio) = $250,000 / Total fixed expenditures (1 - contribution margin ratio)

Ratio of contribution: $312,50 / $250,000.

Ratio of contribution margin: 1.25

Sales - Break-even sales is the margin of safety.

Margin of safety is equal to $150,000.1/1.25.

The safety margin is $120,000.

Therefore, D) $212,500 is the right response.

The margin of safety is the amount by which sales can drop before a Corporation starts to lose money. In this instance, Snowbird has a $212,500 margin of safety, which means that even if sales fall by that much, the business will still be able to cover its fixed costs and turn a profit.

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_____ include tools and equipment used to produce goods and services.
a. Capital resources
b. Consumer resources
c. Human resources
d. Natural resources

Answers

Answer:

The correct answer is B!

Explanation:

Consumer resources, include tools and equipment used to produce goods and services. Thus, option (b) is correct.

What is goods?

The term goods as the another name was the commodities. The goods are the sold to the exchange of the money. The goods are the produced with the help of raw material. The goods are the based on the two prices, such as the manufacturing prices and retail prices. The goods are the two types are the raw goods and the finished goods.

According to the manufactured goods and services as the companies are the manufacturing to the based on the consumer resources. The foundation is built on economic development. Factors of production are the resources used to create all commodities and services.

As a result, the consumer resources, include tools and equipment used to produce goods and services.

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what do nepal, bhutan, and the maldives, all face the economic issue of?

Answers

All three countries of Nepal, Bhutan, and the Maldives face the economic issue of limited diversification.

These countries heavily rely on specific sectors for their economic growth, which makes their economies vulnerable to external shocks and fluctuations. Nepal heavily depends on agriculture and remittances, Bhutan relies on hydropower and tourism, and the Maldives relies on tourism and fisheries. The lack of diversification in their economies can hinder their ability to adapt to changing market conditions and reduce their resilience to economic downturns. It is crucial for these countries to focus on diversifying their economies by developing other sectors, promoting entrepreneurship, and enhancing investment in order to achieve sustainable and balanced economic growth.

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The invisible hand refers to the:__________

a) fact that the U. S. Tax system redistributes income from rich to poor.

b) notion that, under competition, decisions motivated by self-interest promote the social interest.

c) tendency of monopolistic sellers to raise prices above competitive levels.

d) fact that government controls the functioning of the market system

Answers

The idea that self-interested actions advance societal interest under competition is known as the "invisible hand." Smith referred to this as the "invisible hand."

What exactly is a business example interest?

Protecting an employer's trade secrets or sensitive information, a company's reputation, and potential or existing clients are a few examples of legitimate commercial interests. Protecting an employee from public competition is one thing that doesn't constitute a valid business interest.

Why does interest matter in business?

In a market economy, interest fulfils a number of important roles. The most prominent example of this coordination between savers and borrowers is when borrowers are compelled to pay interest so as to loan additional money in order to increase their current spending.

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During January, Ajax Co. Incurs 1,850 hours of direct labor at an hourly cost of $11.80 in producing 1,000 units of its finished product. Ajax standard labor cost per unit of output is $22 (2 hours x $11.00). Compute the total, price, and quantity labor variances for Ajax Co. For January. Identify whether the variance is favorable or unfavorable?

Answers

Answer:

Std rate per hour: 11.00    

Std hours = 1000*2 =2000    

Actual hours = 1850      

Actual rate = 11.80

   

Labor cost variance = Std cost - Actual cost    

Labor cost variance  = (2000*11) - (1850*11.80)

Labor cost variance = 170 Unfavorable

Labor rate variance = Actual hrs (Std rate - Actual rate)  

Labor rate variance = 1850 *(11-11.80)

Labor rate variance = 1480 Unfavorable

Labor qty variance = Std rate (Std hrs-Actual hrs)  

Labor qty variance = 11 (2000-1850)

Labor qty variance = 1650 Favorable.

A business organizational form in which all general partners actively participate in ownership and management and are liable for all debt and actions, is called

Answers

Answer:

General partnership

Explanation:

General partnership is a business organization, whereby two or more partners agrees to share the profit, loss and liability that arises from business operation. What this means is that each partner actively participate in the operations of the business and should the company owe any debt, any of the partners may be sued for the business debt including seizure of the owners assets.

One of the advantages of general partnership is the ease of flexibility to structure their business as they deemed fit hence are able to closely monitor and control operations.

Respond with Social media accounts

Answers

Ask the question more specifically, and I will edit this answer and give you the answer.

BET SAY LESS nrg_samfortnite or

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Random variations represent either increasing or decreasing movements over many years due to factors such as population growth, population shifts, cultural changes and income shifts.

Answers

Answer:

FALSE

Explanation:

THIS IS THE COMPLETE QUESTION

Trends representing either increasing or decreasing movements over many years due to factors such as population growth, population shifts, cultural changes, and income shifts are a component of a time series called "Random Variations"

Random Variation can be regarded as

tendency of an estimated size/ value of a parameter to undergo deviation randomly away from the real/ true magnitude/ value of the parameter.

How do credit card companies use a person's credit report?

A.) To determine if that person should be given a loan or credit card

B.) To calculate how much interest the person is owed on their account

C.) To help them figure out ways to pay off their outstanding debt

D.) To figure out if that person has been using a budget​

Answers

Answer:

The answer is the letter A

Answer:

A

Explanation:

If the price elasticity of demand for labor is 0.1 and the wage increased from $11 to $16 an hour, what is the predicted decrease in the level of employment in percentage terms

Answers

As a result of the increase in wages, the decrease in the level of employment would be 4.5%.

What is the decrease in the level of employment?

Price elasticity of demand for labor is the percentage change in the demand of labor divided by the percentage change in wages.

It is expected that there is a negative relationship between the demand for labor and wages. When wages increase, the demand for labor declines and when wages decreases, the demand for labor increases.

Price elasticity of demand for labor = percentage change in the demand for labor / percentage change in wages

Percentage change in the demand for labor =  percentage change in wages  x price elasticity of demand for labor

percentage change in wages = [($16 / $11) - 1] x 100 = 45.45%

Percentage change in the demand for labor = 0.1 x 45.45 = 4.5%

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True or False
A Person who works full time for a power company in the energy cluster is considered a consultant.

Answers

Answer:

True

Explanation:

Answer:

False, i took the quiz and got 100% percent- k-12 7th grade career final exam

Explanation:

Match each business model with the advantage it brings.​

Match each business model with the advantage it brings.

Answers

Answer:

1. Subscription.

2. Bait and Hook.

3. Cutting out the Middleman.

Explanation:

Some of the commonly used business models across the world include the following;

1. Subscription: steady revenue and predictable profits. It is a business model which typically involves customers paying a recurring fee or price (revenue) for the use of a particular product or service. These customers are usually charged either on a monthly or annual basis. An example is the subscription for paid cable tv by various customers.

2. Bait and Hook: attractive prices for basic product. It is also referred to as the razor and blade business model. Bait and Hook typically involves selling a product at a very low price so as to gain the attention of the buyer and selling a complementary product (refill) to the same buyer at a very high price. An example is a mobile phone (bait) and airtime plus data (hook).

3. Cutting out the Middleman: reduction in transaction costs and processing time. It typically involves the elimination of an intermediary (middleman) in the supply of goods and services to the end users or customers.

An example is the business to consumer (B2C) company such as Walmart, Uber, etc.

To avoid debt, a new business owner should have enough projected revenue to cover expences for the first

A) 6 months
B) year
C) 2 years
D) 5 years

⚠️THIS IS FOR SCHOOL. NO TROLL ANSWERS OR LESS YOU WILL BE REPORTED.⚠️​

Answers

Answer:

b) a year

Explanation:

Identify the problem by analyzing the given scenario. An IT software company is losing market share because it fails to launch new products in a timely manner. Decisions are centralized at the top, and employees have little or no voice. One way to solve this problem is to use teams to eliminate ____ in the company.​

Answers

Explanation:

to eliminate their best efforts in the company

Answer:

"bureaucratic barriers"

Explanation:

i got it right on plato

Explain how companies choose employees to consider for promotion.

Answers

Answer:

Employers will look to see which workers are applying themselves. They want workers who are flexible, have good attitudes, are loyal to their company, practice good judgement, and are unselfish. Workers who go out and do work that is not formally assigned to them and expand the scope of their responsibilities are rewarded with promotions. Workers who maintain extensive professional networks and learn new skills are also prime candidates for promotion.

Answer from the person who asked the question.

Promotion is a term used in management to denote any type of persuasive marketing communication used to inform target audiences about the relative qualities of a business, resource, trademark, or subject.

Firms are looking to see if it's putting forth the effort. They seek individuals who are versatile, have positive views, are devoted to their employer, use common sense, and are selfless.

Promotion is provided to staff who go out and accomplish work that isn't explicitly assigned to them and broaden their obligations.

Employees that maintain vast business networks and continue to gain new abilities are ideal candidates for advancement.

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If the company pursues the investment opportunity and otherwise performs the same as last year, what margin will it earn this year?.

Answers

The company's margin will reach 15 percent this year if the company  pursues the investment opportunity. It can be calculated by dividing net operating income with sales.

Marginal cost generally can be defined as the value to provide one additional unit of manufacturing. Marginal cost also can be defined as a crucial idea in price accounting as marginal value helps decide the maximum green stage of manufacturing for a production process. Marginal cost can be calculated by determining what prices are incurred if best one extra unit is manufactured and also what costs are incurred if one extra unit is best.

The margin will be:

Current sales revenue is $1,600,000

Additional sales revenue is $520,000

Total sales revenue is  $2,120,000

Net Operating income is  $240,000

To find the amount of margin we use this formula:

Margin = Net operating income/sales

Margin =   $240,000/$1,600,000

Margin = 0.15

Margin = 15%

Hence, the company's margin will earn 15% in this year.

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If the company pursues the investment opportunity and otherwise performs the same as last year, what

The greeting of a cover letter is also referred to as the___.

Answers

Answer: salutation

Explanation:ed2021

The opportunity cost of watching a movie will be equal to;
А) The time lost while watching the show
B)The pleasure that could have been enjoyed watching TV instead
С )The pleasure enjoyed by watching the show
D) The amount paid to buy the tickets​

Answers

Answer:

А) The time lost while watching the show

Explanation:

Opportunity cost is the value of the next-best alternative when a decision is made; it's what is given up.

A and D seems correct, but the wording on D makes A the better answer.

the owner of an apartment building told his manager not to rent to an asian family. which statement is true?

Answers

The manager should inform the owner that their request violates fair housing law, as it is discriminatory and illegal. Option C.

In this scenario, the owner of an apartment building explicitly instructs the manager not to rent to an Asian family. However, such instructions are discriminatory and go against fair housing laws, which prohibit discrimination based on factors such as race, nationality, and ethnicity.

As a responsible manager, it is crucial to uphold the principles of fairmhousing and treat all applicants equally, regardless of their background. By following the owner's discriminatory instructions, the manager would be participating in illegal and unethical behavior.

Option (A) stating that the manager must follow the owner's instructions is incorrect because it disregards the legal and ethical obligations of fair housing laws. Compliance with anti-discrimination laws takes precedence over following discriminatory instructions.

Option (B) suggesting the manager set up a screening process based on nationality is also incorrect. Screening applicants based on nationality would still be discriminatory and violate fair housing laws.

Option (D) suggesting that the manager should rent to the Asian family and not inform the owner may seem like a temporary solution, but it does not address the underlying issue of discrimination. It is important to address the situation with transparency and communicate to the owner that their request violates fair housing laws.

The most appropriate response,  is for the manager to inform the owner that the request is a violation of fair housing law. The manager should educate the owner about the legal and ethical implications and work towards finding a resolution that adheres to fair housing principles. So Option C is correct.

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Note the complete question is

The owner of an apartment building told his manager not to rent to an Asian family. Which statement is true?

A.) The manager must follow the owner's instructions.

B.) The manager should set up his screening process to check for nationality.

C.) The manager should tell the owner that his request is a violation of fair housing law.

D.) The manager should rent to the Asian family and not tell the owner.

the term economists use to designate the sort of goods or services for which demand rises when their prices rise is:

Answers

 The term economists use to designate the sort of goods or services for which demand rises when their prices rise is "Giffen goods". Giffen goods are a rare exception to the basic law of demand, which states that as the price of a good or service increases, the quantity demanded of that good or service will decrease. However, with Giffen goods, the opposite occurs. As the price of a Giffen good increases, the quantity demanded of that good also increases. This is because Giffen goods are typically inferior goods, which means that they are goods that people buy less of when their income increases.

As the price of a Giffen good increases, people have less money to spend on other goods and services, so they end up buying more of the Giffen good, even though its price has gone up. Giffen goods are named after Sir Robert Giffen, a 19th-century Scottish economist, who first proposed the concept of a good for which demand rises when the price increases.


The term economists use to designate the sort of goods or services for which demand rises when their prices rise is "Veblen goods." These goods often possess a luxury or status element, leading consumers to perceive them as more desirable when prices increase, contrary to the typical demand behavior.

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Which of these measurements could be the measurements for a D size drawing

Answers

Calculate the scale factor and the missing measurements using the original figure's measurements and the scale drawing. the scale is.

Which of these measures could be used to create a drawing that is D size?

D-size paper is available in two different sizes: 22" x 34" for engineering drawings and 24" x 36" for architectural designs (or 609.6 x 914.4 millimeters) (or 558.8 x 863.6 millimeters). Of course, there are several sizes of drawing paper.

When redecorating or looking for that one piece of furniture to fill a void, floor plans that have been scaled are the ideal guidance. Drawing your room out to scale will help you better visualize your design ideas if you're having trouble doing so.give you a cool blueprint, please. A pencil, paper, and a tape measure are all you need to get started on creating an accurate drawing.

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The complete question is:

Which of these measurements could be the measurements for a D size drawing?

Overall. the trends occurring in marketing channels today (growth in e-commerce. outsourcing. growth of nontraditional channels) have one major theme in common. What is that theme?A) Increased emphasis on personal sellingB) Decreased reliance on technologyC) Growth of direct mail marketingD) Greater focus on customer service and supportE) Shift toward a more customer-centric approach

Answers

The major theme that underlies the trends occurring in marketing channels today, is a shift toward a more customer-centric approach. Correct option is E.

This means that businesses are increasingly focusing on understanding their customers' needs, preferences, and behaviors, and using that information to create more personalized and relevant marketing experiences.

The growth of e-commerce, for example, is driven by consumers' desire for convenience, flexibility, and personalized shopping experiences. Businesses are responding by investing in technology that enables them to provide more personalized product recommendations, offers, and communications to their customers.

Outsourcing and nontraditional channels also reflect this customer-centric trend. By outsourcing certain functions, such as customer service or logistics, businesses can focus on their core competencies and provide better products and services to their customers.

Nontraditional channels, such as social media or influencer marketing, allow businesses to reach customers where they are spending their time and engage with them in more meaningful and authentic ways.

In conclusion, the major theme that underlies the trends in marketing channels today is a shift toward a more customer-centric approach, where businesses are focusing on understanding and meeting their customers' needs and preferences to create more personalized and relevant marketing experiences.

Correct option is E.

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Which of the following is true about
your "gross" pay?
A. It is the money you make before taxes.
B. It is the money you take home after taxes are taken
out..
C. It is the amount of money you pay in social security
tax.
D. It is the amount of money you pay in federal tax.

Answers

The money you make before taxes I believe

What is the advantage of selecting the "Load To" Option? a. It gives you the ability to select which data to import. b. It gives you the ability to sort the data. c. It gives you the ability to select where you want to place data and whether you want to add the data to the data model d. It gives you the ability to export the data to another source.

Answers

The advantage of selecting the "Load To" option is: c. It gives you the ability to select where you want to place data and whether you want to add the data to the data model.

What is the advantage of selecting the "Load To" Option?

By selecting the "Load To" option, you can specify the destination of the imported data in your workbook or data model, including which worksheet, table, or data model object to add the data to. You can also choose whether to append the data to an existing table or replace an existing table with the imported data.

This option is particularly useful when working with large datasets or when you want to organize your data in a specific way in your workbook or data model. It also allows you to control how the imported data is integrated with your existing data, ensuring that your data is structured and organized in the way that you need it to be.

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You just won the grand prize in a national writing contest! As your prize, you will receive $2,000 a month for ten years. If you can earn 7 percent on your money, what is this prize worth to you today?
A. $172,252.71
B. $178,411.06
C. $181,338.40
D. $185,333.33
E. $190,450.25

Answers

The value of the prize is worth $185,333.33 today. This is because the prize is $2,000 a month for ten years, so it totals $240,000.

When that amount is adjusted for the 7 percent interest rate, it comes to $185,333.33. This amount is calculated by taking the original amount and multiplying it by the present value of an annuity factor.

The factor takes into account the time value of money, which means that money today is worth more than money in the future due to the potential for it to earn interest over time. Therefore, the prize of $240,000 a decade from now is worth less than $240,000 today, when factoring in the 7 percent interest rate.

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what is bmi and what ""things to remember about bmi values"" must you remember or take into account?

Answers

Body Mass Index (BMI) is calculated by dividing a person's weight in kilogrammes (or pounds) by their height in metres squared (or feet). High body fatness may be indicated by a high BMI.

Your muscle, fat, bones, organs, and tissue make up your BMI. It can reveal a great deal about a person's health. The BMI is unique to each person's age and gender. Even two people with the same BMI can have completely diverse physical manifestations.

Even though they are both the same height, they would support their weight in quite different ways. The BMI is merely one aspect of your fitness and is only intended to assist you in keeping track of your health.

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To determine living standards for the average person, we calculate a. the inflation rate. b. the unemployment rate.c. the average level of prices. d. real per capita gross domestic product (GDP). e. GDP deflator

Answers

To determine living standards for the average person, we calculate the real per capita gross domestic product (GDP). Living standards refer to the quality of life experienced by individuals in a society, which can be influenced by factors such as income, access to goods and services, and overall economic wellbeing. Real per capita GDP is a measure of the average economic output per person, adjusted for inflation. By using real per capita GDP, we can assess how economic growth is translating into improved living conditions for individuals.

Inflation rate and unemployment rate are important indicators of economic health, but they do not directly measure living standards. The inflation rate refers to the rate at which the general level of prices for goods and services is rising, which can affect purchasing power and the cost of living. A high inflation rate may reduce living standards if wages do not keep pace with increasing prices.

The unemployment rate measures the percentage of the labor force that is unemployed and actively seeking work. A high unemployment rate can have negative effects on living standards, as it may lead to reduced income, lower consumption, and diminished economic opportunities. However, it is important to consider other factors, such as underemployment and job quality, when assessing the impact of unemployment on living standards.

In conclusion, to determine living standards for the average person, we calculate real per capita GDP, which provides a more comprehensive view of individual wellbeing in an economy compared to the inflation rate or unemployment rate alone.

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Other Questions
Donna, a 41-year-old female, presents for biopsies of a lesion in each breast. Dr. Smith will be doing the biopsies using fine-needle aspiration with imaging guidance. Assign the code for the physician's service only. Which of the following statement about market efficiency is true? A. Pricing efficiency refers to transaction costs being as low as possible and required trading should be quickly effected B. Behavioural finance cannot help to explain stock market crashes C. Run test try to identify any significant long-term relationships in security price movements by filtering out short-term price changes D. If the market is weak form efficient it is not possible to make gains by acting on new information. E. In a strong form efficient capital market, shares reflect only public information F. Insider trading cannot give abnormal returns in a strong form efficient capital market? Emily works as a chef and her net income is $1100 bi-weekly. Her expenses include: monthly payment of $1256.00 for rent, monthly payment of $204.66 for her car, monthly payment of 125.00 for insurance, $65.00 per week on groceries, $62.14 per month on her cell phone bill, $52.00 per week on gas, $150 per month on clothes, $50 per month on entertainment, and $40 bi-weekly on miscellaneous items.a) Create a monthly budget for Emily. (5 Marks)b) Which of Emily's expenses are fixed? Which are variable? (2 Marks)c) Is Emily over-spending or underspending? (1 Mark)d) What are some changes that Emily could make to her spending habits? (2 Marks