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a) Assume a reputable firm which is tempted to temporarily deceive its customers by dropping the quality of its product in the present period but retain a high price, so that it derives a temporary high profit equal to B. Further assume that there is a P probability that after its customers realise that they have been cheated they never trust the firm again, so that the profits of the firm fall by X in perpetuity. Identify the relationship between B and X which will lead the firm to never deceive its customers.
Consider the following economy and use the Keynasian model to answer the succeeding questions.
C = 350 mil + 0.85Yd
I = 175 mil
G = 300 mil
X = 170 mil
Z = 120 mil
T = 0,15Y
Yf = R3100 million
Equilibrium Income: Y = C + I + G + (X - Z)
Disposable Income: Yd = (1 - t)Y
Question 1. Calculate the Mutiplier.
Consider the following economy and use the Keynasian model to answer the succeeding questions.
C = 350 mil + 0.85Yd
I = 175 mil
G = 300 mil
X = 170 mil
Z = 120 mil
T = 0,15Y
Yf = R3100 million
Equilibrium Income: Y = C + I + G + (X - Z)
Disposable Income: Yd = (1 - t)Y
Question 1. What is the value of the marginal propensity to consume in this model?
How much does the government collect in taxes when Economy is in equilibrium
Two major causes of declining business confidence
Define both measurements used in assessing price stability
Define the economies of scale
An increase in the rand price of a foreign currency usually
a. benefits South African importers.
b. hurts both South African importers and exporters.
c. benefits both South African importers and exporters.
d. benefits South African exporters.
Depreciation of South African rand against the United States (US) dollar implies that ...
a. South Africa’s exports to the US will be relatively cheaper.
b. you need fewer relatively rands to buy one dollar.
c. the dollar has lost value against the rand.
d. the rand has gained value against the dollar.
In the aggregate expenditures model, the size of the marginal propensity to consume (MPC) is assumed to always be…
a. equal to infinity.
b. zero.
c. greater than ten.
d. an amount greater than zero, but less than one.
e. an amount greater than ten, but more than zero.
