of a good or service. Customer Value-Based Pricing: is the practice of setting the price of a product or service at its perceived value to the customer. This approach tends to result in very high prices and correspondingly high profits for those companies that can persuade their customers to agree to it. It does not take into account the cost of the product or service, nor existing market prices. Good-Value Pricing: is offering just the right combination of quality and good service at a fair price
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planned expenditure line? What is its slope? If government expenditures would be positive function of output, how would the Keynesian cross change? We will go over this on the review session – easier to explain than on paper. The intersect point represents the equilibrium output. Black line – planned expenditures Blue line – realized expenditures If government expenditures would be positive function of output the blue line would shift up. 2. What are the tools of fiscal
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simply $30M / $100M x 100%, which equals 30%. Capital Capital includes any long term assets that are invested into an organization for it to be able to run its operations, whether providing goods or services. For example, if there is a start-up pizza restaurant, it will require a capital investment, that is, the acquiring of assets such as the building where the pizza will be made and served, the equipment that will be used for the cooking of the pizza such as the oven, and any profit made that
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Monetary Policy, Price Stability and Economic Growth Mankiw (2001) defines monetary policy as the control over monetary supply. Monetary policy is therefore concerned with the changes in the supply of money and credit. It refers to the policy measures undertaken by government or the central bank to influence the availability of money and credit with the help of monetary techniques to achieve specific. The following as some of the Specific goals or objectives of monetary policy; Price stability Economic
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economy. It indicates how the economy is currently doing at present and how well it will turn out in the future. Some of the economic indicator covers labor, employment and income, balance of payments, money and banking, education, financial investment, and foreign trade. These indicators are either published quarterly or annually even daily. In the Philippines, the national income accounts, agriculture, education, energy, electricity and gas are some of the economic indicators that forecasters
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Problem Solution: Intersect Investment Services Intersect Investment Services (IIS) is a financial services industry company which has been struggling to survive in a market which has been in constant state of flux, never certain and always chaotic (University of Phoenix, 2008). IIS has “barely managed to survive, but resisted making a drastic, strategic shift” (University of Phoenix, 2008, p. 1). The changed market conditions have led to the changed vision of IIS which is: “Provide a broad set
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for Australia's share market. Its recent movement suggests a large increase in stock prices of 30% over a short period of time. This has many potential affects on the economy including and increase consumer confidence, the wealth effect increased investment and hence an increase in the level of output. This will have a multiplied affect on the economy by increasing exogenous expenditure and the MPC. This could potentially have an expansionary effect on the economy bringing about full employment and
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in a given time period, “ceteris paribus”. * Our view here encompasses the collective demand for all goods and services rather than the demand for any single good. * It therefore consists of demand of local consumers, firms, the government and foreigners in the case of open economy. That is QD = C + I + G +DX, where DX is export demand, C is local consumers, I is investment and QD is aggregate demand. * For closed economy, QD = C + I + G. * Aggregate demand can called as planned
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cycle. b. Why does GDP measure only final goods and services produced rather than all goods and services produced? Explain 2. Why is the aggregate demand (AD) curve downward sloping? Discuss and use graphs where necessary? The Aggregate Demand (AD) curve is downward sloping because consumption, investment and net exports are affected by changes in the price level . Aggregate Demand (AD) is the sum of the demand for all goods and services in the economy. It can also be seen as the quantity
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Case 16: Capital Budgeting Too Hot To Handle! When Patsy opened her full service salon and day spa three years ago, she knew that she would have to make some difficult choices regarding the hiring and firing of qualified professionals such as cosmetologists, estheticians, nail technicians and massage therapists. However, she was confident that her salon management training at Chic University coupled with her industry experience as a stylist would serve her well. And serve her well they
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