Fixed Exhange-Rate System: currency system in which governments try to keep the values of their currencies constant against one another
Flexible Exchange- Rate System: allows the exchange rate to be determined by supply and demand. With a flexible exchange- rate system, exchange rates need not fall into any prespecified range.
Pegged currency
^For me on apex 2022 :)
What shifts the line in supply and demand graph?
It is caused due to change in income, price of related goods, organisational changes, governmental policies, taste & preferences, special influences etc.
What is in a free enterprise economy supply and demand affect the of a product?
In a free enterprise system, when supply is low and demand is high, prices are higher, but when supply is high and and demand is low, prices are lower.
What will happen to the prices in the market if the supply and demand meet at the equilibrium?
Transaction happens when supply and demand meet. Both sides (a seller and a buyer) meet their needs: a seller gets money for its products (now he can manufacture next products) and a buyer gets product he needed.
How does wage increases affect the demand for and supply of labor?
wages will go down because productivity is lower
What does supply and demand effect?
There is no way supply and demand affect disasters, they are natural things in nature while supply and demand are economic processes. Disasters can easily decrease the supply of something, which increases the price on that good.
How can oil companies deal with the relative supply and demand for petrol and diesel fractions?
The supply and demand for diesel and gasoline (petrol) creates problems for refineries because sometimes the vehicle fleet demand does not match the product distribution produced by the refinery. If diesel demand is much higher than gasoline demand, but gasoline and diesel are produced in relatively equal amounts, then the gasoline will be oversupplied to the market. A refinery can only affect its product distribution slightly and each refinery is built to process a particular type of crude oil. Switching crude oils in a refinery requires complex analysis of metallurgy, capacity limitations, and profitability.
What determines the supply and demand of the factors of production?
The demand for labor is a derived demand in that it depends on a company's decision to supply output in another market. This expansion in a market that has customers is the main factor in how much the demand for labor will increase.
How does demand affect the price?
As demand for a good goes up, the price goes up. So any determinant of demand that has positive or negative effect on demand will have the same affect on the price.
Non price factor can have a great influence on demand. For example when I go food shopping I always look for deals or non-price factors. One deal or non price factor that causes me to buy is a deal called buy one get another at equal cost for free. This is a great incentive. This incentive increses a demand for the item. In this case it is steak.
What is the explanation for the law of supply and demand?
How many shoes a company has and how many people want the shoes is demand. When the company has more than enough shoes, the supply is larger than the demand so the price is lower. When there aren't enough shoes, the demand is higher so the price is lower. For example, if there is only one dollar in the entire country, one person would be rich because they have all of the money. But if there was one trillion dollars, money would have less value because one dollar would only be 1/1,000,000,000,000th of all of the money.
Sentence with supply and demand?
Her supply of tight sweaters increases the demand for her as a date on the weekend.
What factors determine the supply of land?
Natural limitations as constraints by topography,climate,access to water etc
Extent of existing development
Zoning
Taxation
Customary inheritance
Extent of speculative behaviour
Fixed location factor
Government injunctions
How is the law of supply similar to the law of demand?
If the demand for a commodity increases, but the supply does not increase equally, the price will increase. If the supply of a commodity increases, but the demand for that commodity does not increase equally, the price will decrease. If the demand for a commodity decreases, but the supply does not decrease equally, the price will decrease. If the supply of a commodity decreases, but the demand does not decrease equally, the price will increase.
general equilibrium
What factors will shift the supply and demand for currency?
Confidence in the economy. If the economy of the country is doing good, it is likely that the confidence in that currency is high, raising the demand. However, when the economy is sloppy, the lack of confidence brings down the demand level.
Level of exports and imports
Relative income changes (Higher income in other countries => go on holidays and thus rising demand for other currencies.)
Relative interest rate (High interest rate => high return => people invest more in it)
The higher the price the larger the quantity produced, as the price of a good raises existing firms will produce more to earn additional revenue.
What are fixed exchange rate system and currency board system?
A fixed exchange rate system is where a country's exchange rate regime under which the government or central bank ties the official exchange rate to another country's currency (or the price of gold). The purpose of a fixed exchange rate system is to maintain a country's currency value within a very narrow band. Also known as pegged exchange rate.
Fixed rates provide greater certainty for exporters and importers. This also helps the government maintain low inflation, which in the long run should keep interest rates down and stimulate increased trade and investment. however I'm not sure what a currency board system is....sorry.
State what the law of supply and demand shows and describe how it works?
If the demand for a commodity increases, but the supply does not increase equally, the price will decreaase. If the supply of a commodity increases, but the demand for that commodity does not increase equally, the price will increase. If the demand for a commodity decreases, but the supply does not decrease equally, the price will increase. If the supply of a commodity decreases, but the demand does not decrease equally, the price will decrease
What determines supply and demand in the foreign-exchange market?
Supply and demand in the foreign-exchange market are determined by changes in many market variables, including relative price levels, real interest rates, productivity, product preferences, and perceptions of economic stability.
Supply and Demand is an economic model that describes how prices of commodities in an open competitive market naturally gravitate toward an equilibrium between the available supply for a commodity and the demand for that same commodity at any given time. In this model, supply is defined as the willingness of a producer to sell a commodity at a given price and terms, and demand is the willingness of a consumer to purchase that commodity at a given price and terms.
In principle, as supply increases, more of the commodity becomes available to consumers, and therefore the consumers have greater access to a wider range of sources of the commodity. In this circumstance, the commodity price falls. The commodity price can also fall when demand for that commodity weakens, forcing producers to "sweeten the deal" in order to attract buyers.
As supply decreases, price increases, because there is less of the commodity available on the market, and consumers must compete more aggressively with each other to purchase the same commodity. Price can also increase when demand increases, also creating increased competition for the commodity.
The supply and demand model seeks to identify and predict intersections between supply and demand curves, and thereby evaluate the current fair price for commodities, and to anticipate changes of the commodity prices.
For more information, see the related link below.
How is price affected by the law of supply and demand?
The law of supply and demand helps determine the price of the item because when supplies of goods and services become plentiful, prices tend to drop. When supplies become scarcer, prices tend to rise.
More specifically, if I'm selling 10 bananas and only five people want a banana, then I have too many bananas. I will drop my prices to try and get people to buy more bananas. On the other hand, if I have 10 bananas and twenty people want a banana, then I don't have enough bananas. I will raise my prices as some would be willing to pay more to ensure that they get a banana.
As the number of an item increases, the price decreases. As the number of an item decreases, the price increases. The reason for this is that if there are more people that want an item than there are items, the price has to go up to make it go to only those that can afford it. When there are way more items than there are people that want it, then the price goes down to make more people want it.
How does profit affect supply?
Well, say a company has a whole bunch of a certain type of product. They have plenty of "supply." But if they don't have that many customers to buy that product, then they don't have a lot of "demand." Therefore, in order for them to sell the product, they need to make it cheaper to get rid of it. And it works opposite too. If they have little of the "supply," and lots of "demand," they will increase the price, so they can make a better profit.