Economics Answers

The exchange rate between the Banana Republic dollar (B$) and the US dollar (US$) was B$14.50 to US$1 in 2017,and the exchange rate between two currencies is B$1 to US$0.08 in 2018. A trader, Tom, bought second hand smartphones cost $100 in both the year 2017 and 2018.
A)what is the exchange rate between B$ and US$ in 2018 if we use direct quoting method?
B) what happens to the B$ VS US$ exchange rate from 2017 to 2018?
C) if Tom sells the phones for B$2000 locally online, in which year would Tom make a higher profit? Show your calculation to substantiate your answer.

What other “urban legends” exist about the poor and welfare? What research could be conducted to dispel these legends or prove them to be factual?

How would respond to the statement, “... Why should wealthy people who can afford to raise many children any food stamps for foster children? After all, they may claim the children on their tax returns and that should be sufficient..

Use appropriate economic frameworks and/or models including the Production Possibility Frontier (PPF) to graphically describe and discuss the potential implications for economic costs, economic growth, allocative efficiency in the West African economies producing cocoa beans from proposals made in the extract above. Discuss with graphical explanations how these economies would be affected by the efforts to move their production high up on the value chains of cocoa bean cultivation to primary and secondary products including the branding and marketing of those products. In your discussion, present real economic data (e.g. www.tradingconomics.com or any other credible economic and data sources) as evidence on how these economies would potentially be affected in terms of indicators including their relative GDP sizes, local employment opportunities, etc., in the process of internalising the processes that are located high up in the cocoa bean value chains.

Use the relevant trade theories of comparative advantage to describe and discuss the potential benefits and losses of cocoa production sectors in West African countries, like Ghana, when the signed Africa Free Trade Area Agreement (summarised in the attachments) is implemented from year 2020.
From both the potentially exporting (e.g. Ivory Coast) and importing country (e.g. RSA) perspectives, of these products, discuss with graphical illustrations the potential economic implications on variables including consumers, producers and governments stemming from a widening of African markets for cocoa products as a result of this FTA’s implementation. To support your discussion use the relevant economic data from sources (e.g. tradingeconomics.com and others of trade data)

(a) Why do economists look at implicit costs?

(b) Look at two businesses (one big and one small) and for each identify what might be their implicit costs. Be specific!

During December, this company's cash balance has fallen from $200,000 to $65,000. Does it appear headed for insolvency in the near future? Explain your reasoning.

Essay

You are a manager of a fertilizaer company desperate to boost sales by offering heavy discounts on fertilizers to overcome negative perceptions created in the stock market by declining sales. You have a large consignment of fertilizers at warehouse that will be expiring soon and have to decide whether to ship it Country-A or Country-B.
●Country-A: Farmers in country A use relatively High levels of fertilizers in growing crop XYZ.
●Country-B: Farmers in country B use relatively low levels of fertilizers in growing crop XYZ.
Both regions will be offered an identical discounted price, but due to high shipping costs, you can only ship to one region. ALL unsold fertlizer bags will be destroyed due to high shipping costs (Or You may assume they will expire if not sold in the country you shipped)

Explain the relationship between the effectiveness of monetary policy and the interest elastic-
ity of investment. Will monetary policy be more or less effective the higher the interest elastic-
ity of investment demand? Now explain the relationship between the effectiveness of fiscal
policy and the interest elasticity of investment demand. Why do the two relationships differ?

b. Prepare the cash flow statement from investing activities of Alpha Creative Ltd for the year ended March31, 2019


Particulars Amount
Plant acquired 160000
Claim received for loss of plant in fire 45500
Unsecured loans given to subsidiaries 595000
Interest on loan received from subsidiary companies 72500

• Also give reasons for the classification of above activities as inflow /outflow

Question 4
External shocks affect the internal economy. Given the case below and using the IS-LM-BP model to graphically analysis and explain how this comes about.
Case: The case of recovery after the worldwide recession in the early 1990’s led to a rise in foreign income: Floating ER, Limited Capital Mobility. (4 marks)