Description
Please answer each question:
- How do the supply and demand curves help companies price their products?
- How does the utility theory explain how a client makes a buying decisions?
- Explain Gross Domestic Product. How could that be important to investors? How does a countries trade balance with other countries affect its financial markets?
- Explain the basic business cycle. How does the business cycle affect our capital markets (as well as unemployment, recessions, fiscal and monetary policy)?
- Explain how interest rates affect the term structure of the yield curve. For example, explain what a normal and inverted yield curve mean.
- Discuss and explain how foreign exchange rates between two companies affect their buying decisions.
Explanation & Answer
Find the attached paper.
Running head: ECONOMY QUESTIONS
Economy Questions
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2
ECONOMY QUESTIONS
Question One
The supply and demand curves play a significant role in aiding the companies to price
their products. Demand is used to denote the quantity of a given product which is demanded by
the buyers at a given point of time. Supply is used to refer to the number of products that the
sellers and the suppliers are willing to supply at a given period of time. The supply and demand
model depicts the combination of the preferences of both the suppliers and the buyers. As such,
the supply and demand model plays a significant role in ascertaining the market prices at any
given point in the market (Sherman, 2014). Since the supply and demand curve depicts the
changes in supply and demand, they help the companies to structure their prices in line with the
current market.
Question Two
The utility theory portends that the consumers or the buyers make resolutions on the basis
of the principle of maximization. The theory further portends that th...
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