2. Years ago, an apple producer argued that the United States should enact a tariff, or atariff, or a tax, on imports of bananas. His reasoning was that "the enormous imports ofcheap bananas into the United States tend to curtails the domestic consumption of freshfruits produced in the United States."(a) Was the apple producer assuming that apples and bananas are substitutes orcomplements? Briefly explain.(b) If a tariff on bananas acts as an increase in the cost of supplying bananas in theUnited States, use two demand and supply graphs to show the effects of the appleproducer's proposal. (i) One graph should show the effect on the banana market inthe United States, and (ii) the other graph should show the effect on the applemarket in the United States. Label the change in equilibrium price and quantity ineach market and any shifts in the demand and supply curves.

Imports A commodity or service that was created in another nation and is purchased in one country is…

Answered: 2. Years ago, an apple producer argued…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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20A
When President Carlos Menem of Argentina took office in 1989, he and his economy minister Domingo Covallo decided that competition from foreign producers would stimulate Argentine businesses to provide better products at competitive prices. To the delight of Argentine shoppers, the import tariffs were lowered and goods began pouring in from all over the world: calculators and copy machines, scissors and automobiles, bicycles, toothpicks – and peaches. When Menem’s new policies took effect, California peach growers responded eagerly to the opening of the new market. Individual growers banded into the California Peach Growers Association to ship their fruit to Edcadassa, the Argentine firm that oversees all imported goods while they await customs clearance at Ezeiza international airport. As supervisor of the Argentine project for the growers association, you were extremely pleased with success of the first few shipments; everything had gone smoothly. Then word came back from…
4. In Canada, the Ontario government provides a tax incentive for firms that spend on scientific research. This tax credit will most likely: a. help increase TFP in Ontario b. reduce spending on research and development (R&D) c. increase convergence among Canada's provinces d. reduce the likelihood of diminishing marginal returns
You are the manager of a U.S. company situated in Los Angeles and manages the import/export division of the company. The company distributes (resells) a variety of consumer products imported to the U.S.A from Europe and also exports goods manufactured in the U.S.A. to Canada. Therefore, your company is very much dependent an the impact of current and future exchange rates on the performance of the company. Scenario 1: You have to estimate the expected exchange rates between your home currency and the other currencies of the major other countries that you deal with in terms of bath imports and exparts. The reason is that increases in the values of other currencies compared to the U.S. Dollar may impact your imports negatively, whilst it may on the other hand, be good for exports. To do this estimate, you obtain the following spot exchange rate information: €/S CADS/S 0.87616 1.30779 You also obtain the following annual risk free rates applying in the countries: U.S.A. 2.660% France…
Honesto imported a harvester from the U.S. with a total cost of 1,100,000 before Customs Duties. The importation is subject to 10% Customs duties. What is the VAT on importation if the importation is made by an agricultural cooperative?* a. P 158,400 b. P 144,000 c. P 129,600 d. P 0
Opening CaseGLAXOSMITHKLINE INC. V HER MAJESTY THE QUEEN: A BAD CASEOF HEARTBURNThe Tax Court of Canada delivered a long-awaited decision on May 30, 2008, in Canada’s first major transfer pricing court case. The decision (which the taxpayer may appeal) illustrates the court’s endorsement of the hierarchy of methods set out in the OECD Guidelines, where transactional methods trump profit-based analysis. The Minister of National Revenue (“MNR”) reassessed GlaxoSmithKlineInc.’s (“GSK Canada”) 1990 to 1993 taxation years (or “years under audit”)by increasing its income in each taxation year on the basis that GSK Canadaoverpaid its related party supplier for the purchase of ranitidine hydrochloride(“ranitidine”).Ranitidine is the active pharmaceutical ingredient in a drug that is used torelieve stomach ulcers and heartburn. The drug is sold by GSK Canada under the brand name Zantac. During the years under audit, GSK Canada purchased ranitidine from Adechsa S.A. (“Adechsa”), a related party…
Pulaski Inc. wants to establish a new subsidiary in Colombia that will sell cell phones to Colombian customers and remit earnings back to the U.S. parent. The value of this project will be favorably affected if the value of the peso ____ while it establishes the new subsidiary and ____ when the subsidiary starts operations. appreciates; appreciates depreciates; appreciates appreciates; depreciates depreciates; depreciates
QUESTION 4 A quota is a market-imposed balancing factor that keeps prices of imports and exports in equilibrium. a law that prevents ecologically damaging goods from being imported into a country. a tariff imposed on goods that are dumped in the country. a government-imposed restriction on the quantity of a specific good that can be imported.
If a U.S.-based company regularly purchases goods from foreign suppliers in Japan with the invoice price denominated in Japanese Yen. And if the U.S. company has experienced several foreign exchange losses due to the depreciation of the Japanese Yen. Which type of hedging instrument (Foreign currency forward contract or foreign currency option) the company should employ? Please provide a justification for the selection. Also, compare the advantages and disadvantages of using (Forward contracts) and (Options) to hedge foreign exchange risk.
The Japanese yen increases in value relative to the dollar, moving from 120 yento 110 yen to each U.S. dollar. From the perspective of a U.S. firm that produces in the UnitedStates and exports its product to sell in Japan:a. This is bad news.b. It doesn’t matter.c. This is good news
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