The interest rate in Japan is 2% and the interest rate in the US is 5%. The spot exchange rate is ¥100 per dollar and the one year ahead forward rate is ¥98 per dollar. What is the profit made via covered interest arbitrage if you start by borrowing 1 million yen and investing in the US market? Assume borrowing and lending rates are identica

Q: Consider the market for ethanol in the United States depicted in the figure to the right. Assume the…

A: Demand means the quantity of goods that a consumer is willing and able to purchase at a given price…

Q: What is the material economy?

A: An economy refers to the system of production, distribution, and consumption of goods and services…

Q: Name two factors that contributed to inflation in 2022 and 2023.

A: Inflation has far-reaching effects throughout an economy. When prices rise significantly over a…

Q: Nicole wants to examine first if she wants to enter the market for Chanel bags and she assumes that…

A: In perfect competition,  There exists a single seller.  The firm will produce where the price is…

Q: [3] Suppose a firm employs capital (K) and labor (L) to produce its product in the long-run.…

A: An iso-cost line is a graphical representation of all the combinations of two inputs, such as…

Q: Consider the online learning problem with demand learning. The firm sells a product without any…

A: Demand function D=9-3P+ε ε-- error term with zero mean Marginal cost is negligible When marginal…

Q: Assume that a water distribution monopoly serves two consumer types, industrial and residential. The…

A: Under a monopoly, a single seller faces the entire market demand on his own. Here, the seller…

Q: According to the graph below, what is the quantity at equilibrium? Price $20 $18 $16 $14 $12 $10…

A: Equilibrium in economics refers to a situation in which the supply of an item or service is equal to…

Q: 2. Assume that you are planning to invest money at 7% per year as shown by the increasing gradient…

A: Downward arrows represent negative cash flows while upward arrows represent positive cash flows. The…

Q: 16. You are the CEO of Comchip. Each of the firm's computers contain a unique chip that is produced…

A: Total cost is the total expenses incurred by a firm while producing goods or services. It is the…

Q: Suppose that widgets can be produced using two different production techniques, A and B. The…

A: There are two production techniques, A and B Input requirement for each level of output is given…

Q: Good A and Good B are perfect complements. Shifting the supply curve for Good A to the right will…

A: The two goods are said to be complements when the decrease in price of one good increases the demand…

Q: Instructions: Use the Mark Line tools to find the quantities demanded and supplied at the $7 minimum…

A: Minimum wages refers to the minimum legal remuneration that an employer must pay the workers during…

Q: Initially, the banking system has a required reserve ratio of 20.0 percent, $450,000 in total…

A: In economics, a multiplier widely describes an economic factor that, when raised or changed, causes…

Q: Suppose that each firm in a competitive industry has the following costs: Total Cost: TC = 50+/q²…

A: Fixed cost is the part of total cost that does not depend on q and Variable cost is the part that…

Q: What is the term economists use to refer to the relationship that a higher price leads to a lower…

A: Demand curve is the downward sloping curve.  Supply curve is the upward sloping curve.  Equilibrium…

Q: Consider a loan innovation made to spread risk by having several lenders each contribute a small…

A: Diversifiable risk refers to the portion of an asset's risk to be associated with random factors…

Q: Calculate Amari's marginal revenue and marginal cost for the first seven phone cases they produce,…

A: Total cost is the total cost of production, which includes both fixed and variable costs. Marginal…

Q: Suppose that the ith person be denoted T₁, and the disposable income for the ith person be denoted…

A: The amount of money that people have left over after accounting for income tax is determined using…

Q: What is the impact of climate change on global food production, and how will this affect food…

A: Sustainability is the capacity to uphold and support a specific degree of social, economic, and…

Q: d) Calculate the real GDP using 2005 prices for each of the three years. W

A: GDP is the gross domestic product.  GDP is the market value of all the goods and services produced…

Q: (d) The producer surplus is $_ 1600 million. Now, suppose the government imposes a quota of 60…

A: The equilibrium is where the demand curve intersects the supply curve.  Producer surplus is the area…

Q: Consumer surplus in Nicaragua with trade is

A: Consumer surplus is the area above the price line and under the demand curve.

Q: Puerto Rico Electric Power Authority​ (PREPA) is a natural monopoly that is unregulated. PREPA…

A: A natural monopoly arises when a single firm (here, PREPA) can supply the entire market demand at a…

Q: Assume the following for the economy of a country: • Consumption function: C = 60 +0.75Yd •…

A: C=60+0.75YdI=77G=53T=0.2Y-25Yd=Y-T Here C denotes consumption expenditure, I denotes investment, G…

Q: The following graph plots equilibrium in the money market at an interest rate of 6% and a quantity…

A: Aggregate spending: The total of consumption (C), expenditure (E), investment (I) expenditure,…

Q: Suppose the Fed announces that it is raising its target interest rate by 75 basis points, or 0.75…

A: The Federal Reserve uses open market operations (OMOs), which are central banks' purchases and sales…

Q: 3. The effect of negative externalities on the optimal quantityof consumption Consider the market…

A: Negative externality is the external cost imposed on third party which is not a part of economic…

Q: Suppose a firm has a cost curve equal to Cost = 800 + 15q. The inverse demand curve is p = 400 4q.…

A: Total revenue is the total value of the commodities produced and sold in equilibrium. Economic costs…

Q: Critique the following statement as True or False and explain your reasoning. A profit-maximizing…

A: Profit maximization means to follow a strategy of establishing that output and price at which…

Q: Answer the questions below based on the data in the following table. (All figures are in $billions.)…

A: M2 money supply is a measure of the money supply that includes all the elements of M1 money supply…

Q: 6. Suppose an economy starts with a GDP of $100m. If the economy grows at a rate of 7.5%, how much…

A: GDP is the gross domestic product.  GDP is the market value of all the goods and services produced…

Q: A city has developed a plan to provide for future municipal water needs. The plan proposes an…

A: Present worth is a financial calculation that estimates the current value of future cash flows. It…

Q: A forecast of impending inflation caused by rapid growth in spending would likely cause the Federal…

A: The Fed is the US central bank. Congress established it in 1913 to promote a stable and flexible…

Q: The ____________ is the quantity where quantity demanded and quantity supplied are equal at a…

A: Demand schedule is the tabular representation of quantity demanded at various prices.  Demand curve…

Q: The total money supply M has two components: bank deposits D and cash holdings C, which we assume to…

A: The entire quantity of money that is readily available in an economy at any particular moment is…

Q: Winthrop Company has an opportunity to manufacture and sell a new product for a five-year period. To…

A: NET PRESENT VALUE  Net Present Value is one of the important capital budgeting technique. Net…

Q: A food manufacturer is trying to maximize profit by selling wheat-based cereal (C) and wheat…

A: A food manufacturer is trying to maximize profit by selling wheat-based cereal (C) and wheat bread…

Q: # 10 An example of efficiency in economics is Select one: Satisfying wants with…

A: Efficiency in economics refers to how effectively a system or economy uses its resources to produce…

Q: List and describe the different types of economic integration from the narrowest to the most…

A: Economic integration is the process of lowering trade barriers and boosting international economic…

Q: A sample of 27 elements from a normally distributed population is selected. The sample mean is 14…

A: According to the question, it is given that : Sample =  27 elements Sample mean = 14 Sample…

Q: With suitable examples and illustrations write a detailed essay showing the demand curve and its…

A: The demand curve is a graphical representation of the different quantities of a particular good that…

Q: 1. To increase consumption of prenatal vitamins by pregnant women, the government is considering the…

A: Subsidies are government payments to producers or consumers to encourage the production or…

Q: Consider a simple model to estimate the effect of factors on number of children of a women in…

A: Regression is a statistical method used to analyze the relationship between one or more independent…

Q: Online sale Suppose a student is considering selling their used smartphone online. They can sell it…

A: The expected price of a good is the average price that buyers and sellers anticipate the good will…

Q: Consider the following production schedule: Total Cost $ 4.00 $ 7.00 $ 8.00 $ 12.50 $ 17.20 $ 22.00…

A: The total fixed cost is the cost that producer has to pay irrespective of amount of output

Q: Identification of indep and dep var

A: In regression analysis, the independent variable (also called the predictor variable) is the…

Q: Draw a decision tree for this problem

A: The probability that no shopping canter will be built=20%=0.2. The probability that medium shopping…

Q: In the beginning of the year, the economy has public debt (or national debt) of $450 million. This…

A: Tax revenue is the revenue collected by the government.  Government spending is the amount spent by…

Q: Describe Blanchard’s Model of Situational Leadership (Theory) and relate this to coaching strategies…

A: Blanchard's Model of Situational Leadership is a theory that proposes that effective leadership…