Impact of stock market crash on different economies.

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Answer 1

Question

Chapter 14, Problem 1.2P

To determine

Impact of stock market crash on different economies.

Expert Solution & Answer

Explanation of Solution

Asia experienced stock markets crash in 1997, as a result, Hong Kong’s was down nearly 30 percent, Thailand’s was down nearly 62 percent and Malaysia was also down around 60 percent. Situation was same in Japan and Korea. Such large drops negatively affect the wealth of households in these countries. Therefore people starts to spend less. As a result consumption decreases which leads to decrease in national income also. So these economies experienced recession due to the stock market crash.

These events also affect U.S economy very badly. Mainly, there are several Americans are invested in foreign countries. Therefore when the stock markets collapsed in Asia, would create a modest wealth effect in the U.S market. Another problem faced by the U.S economy was, when the recession occurs in the foreign countries mean that, they would reduce the consumption from the U.S economy as a result, the export demand of U.S falls. Finally, one of the main problem was import prices from Asian countries would fall when these countries compete with U.S firms.

Economics Concept Introduction

Concept introduction:

Stock market: Stock market can be defined as the place where the buying and selling of equities or stocks of publically held companies.

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2.) Using the line drawing tool, plot and label the isocost line. Carefully follow the instructions above, and only draw the required objects. FILL IN BLANK d. Now suppose the price of labour rises to $5 per unit, but the firm still wants to produce 500 tires per day. Explain how a cost-minimizing firm adjusts to this change (with no change in technology). A cost-minimizing firm will be producing on ▼ The samedifferently slopedparallel isocost line. The firm will use ▼ moresameless labour and ▼ less the same amount of more capital and produce on ▼ a higher point on the same a lower point on the same a lower a higher isoquant curve.

QK Using the graph on the right, determine how the firm should change the quantity of the production factors in order to reduce the costs. The firm that is producing at point A can reduce its costs for producing 2000 units by employing A. same capital and more labour. B. less capital and more labour. ○ C. less capital and the same labour. D. more capital and more labour. OE. more capital and less labour. C A B Q =4000 Q = 2000 C Isocost line QL

PL Suppose the price ratio is the same along isocost PK lines A and B. In the figure at right, the difference between isocost line A and isocost line B is that A. the total cost is larger along B. B. the total cost is larger along A. OC. labour is relatively more expensive along A. ○ D. the level of output is lower along A. OE. both capital and labour are relatively cheaper along A. Capital B Labour

Answer 2

Question

Chapter 14, Problem 1.2P

To determine

Impact of stock market crash on different economies.

Expert Solution & Answer

Explanation of Solution

Asia experienced stock markets crash in 1997, as a result, Hong Kong’s was down nearly 30 percent, Thailand’s was down nearly 62 percent and Malaysia was also down around 60 percent. Situation was same in Japan and Korea. Such large drops negatively affect the wealth of households in these countries. Therefore people starts to spend less. As a result consumption decreases which leads to decrease in national income also. So these economies experienced recession due to the stock market crash.

These events also affect U.S economy very badly. Mainly, there are several Americans are invested in foreign countries. Therefore when the stock markets collapsed in Asia, would create a modest wealth effect in the U.S market. Another problem faced by the U.S economy was, when the recession occurs in the foreign countries mean that, they would reduce the consumption from the U.S economy as a result, the export demand of U.S falls. Finally, one of the main problem was import prices from Asian countries would fall when these countries compete with U.S firms.

Economics Concept Introduction

Concept introduction:

Stock market: Stock market can be defined as the place where the buying and selling of equities or stocks of publically held companies.

Want to see more full solutions like this?

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Answer 3

Question

Chapter 14, Problem 1.2P

To determine

Impact of stock market crash on different economies.

Expert Solution & Answer

Explanation of Solution

Asia experienced stock markets crash in 1997, as a result, Hong Kong’s was down nearly 30 percent, Thailand’s was down nearly 62 percent and Malaysia was also down around 60 percent. Situation was same in Japan and Korea. Such large drops negatively affect the wealth of households in these countries. Therefore people starts to spend less. As a result consumption decreases which leads to decrease in national income also. So these economies experienced recession due to the stock market crash.

These events also affect U.S economy very badly. Mainly, there are several Americans are invested in foreign countries. Therefore when the stock markets collapsed in Asia, would create a modest wealth effect in the U.S market. Another problem faced by the U.S economy was, when the recession occurs in the foreign countries mean that, they would reduce the consumption from the U.S economy as a result, the export demand of U.S falls. Finally, one of the main problem was import prices from Asian countries would fall when these countries compete with U.S firms.

Economics Concept Introduction

Concept introduction:

Stock market: Stock market can be defined as the place where the buying and selling of equities or stocks of publically held companies.

Want to see more full solutions like this?

Subscribe now to access step-by-step solutions to millions of textbook problems written by subject matter experts!

Answer 4

Question

Chapter 14, Problem 1.2P

To determine

Impact of stock market crash on different economies.

Expert Solution & Answer

Explanation of Solution

Asia experienced stock markets crash in 1997, as a result, Hong Kong’s was down nearly 30 percent, Thailand’s was down nearly 62 percent and Malaysia was also down around 60 percent. Situation was same in Japan and Korea. Such large drops negatively affect the wealth of households in these countries. Therefore people starts to spend less. As a result consumption decreases which leads to decrease in national income also. So these economies experienced recession due to the stock market crash.

These events also affect U.S economy very badly. Mainly, there are several Americans are invested in foreign countries. Therefore when the stock markets collapsed in Asia, would create a modest wealth effect in the U.S market. Another problem faced by the U.S economy was, when the recession occurs in the foreign countries mean that, they would reduce the consumption from the U.S economy as a result, the export demand of U.S falls. Finally, one of the main problem was import prices from Asian countries would fall when these countries compete with U.S firms.

Economics Concept Introduction

Concept introduction:

Stock market: Stock market can be defined as the place where the buying and selling of equities or stocks of publically held companies.

Want to see more full solutions like this?

Subscribe now to access step-by-step solutions to millions of textbook problems written by subject matter experts!

Answer 5

Chapter 14, Problem 1.2P

To determine

Impact of stock market crash on different economies.

Expert Solution & Answer

Explanation of Solution

Asia experienced stock markets crash in 1997, as a result, Hong Kong’s was down nearly 30 percent, Thailand’s was down nearly 62 percent and Malaysia was also down around 60 percent. Situation was same in Japan and Korea. Such large drops negatively affect the wealth of households in these countries. Therefore people starts to spend less. As a result consumption decreases which leads to decrease in national income also. So these economies experienced recession due to the stock market crash.

These events also affect U.S economy very badly. Mainly, there are several Americans are invested in foreign countries. Therefore when the stock markets collapsed in Asia, would create a modest wealth effect in the U.S market. Another problem faced by the U.S economy was, when the recession occurs in the foreign countries mean that, they would reduce the consumption from the U.S economy as a result, the export demand of U.S falls. Finally, one of the main problem was import prices from Asian countries would fall when these countries compete with U.S firms.

Economics Concept Introduction

Concept introduction:

Stock market: Stock market can be defined as the place where the buying and selling of equities or stocks of publically held companies.

Answer 6

Chapter 14, Problem 1.2P

To determine

Impact of stock market crash on different economies.

Expert Solution & Answer

Explanation of Solution

Asia experienced stock markets crash in 1997, as a result, Hong Kong’s was down nearly 30 percent, Thailand’s was down nearly 62 percent and Malaysia was also down around 60 percent. Situation was same in Japan and Korea. Such large drops negatively affect the wealth of households in these countries. Therefore people starts to spend less. As a result consumption decreases which leads to decrease in national income also. So these economies experienced recession due to the stock market crash.

These events also affect U.S economy very badly. Mainly, there are several Americans are invested in foreign countries. Therefore when the stock markets collapsed in Asia, would create a modest wealth effect in the U.S market. Another problem faced by the U.S economy was, when the recession occurs in the foreign countries mean that, they would reduce the consumption from the U.S economy as a result, the export demand of U.S falls. Finally, one of the main problem was import prices from Asian countries would fall when these countries compete with U.S firms.

Economics Concept Introduction

Concept introduction:

Stock market: Stock market can be defined as the place where the buying and selling of equities or stocks of publically held companies.

Answer 7

Chapter 14, Problem 1.2P

To determine

Impact of stock market crash on different economies.

Answer 8

Expert Solution & Answer

Explanation of Solution

Asia experienced stock markets crash in 1997, as a result, Hong Kong’s was down nearly 30 percent, Thailand’s was down nearly 62 percent and Malaysia was also down around 60 percent. Situation was same in Japan and Korea. Such large drops negatively affect the wealth of households in these countries. Therefore people starts to spend less. As a result consumption decreases which leads to decrease in national income also. So these economies experienced recession due to the stock market crash.

These events also affect U.S economy very badly. Mainly, there are several Americans are invested in foreign countries. Therefore when the stock markets collapsed in Asia, would create a modest wealth effect in the U.S market. Another problem faced by the U.S economy was, when the recession occurs in the foreign countries mean that, they would reduce the consumption from the U.S economy as a result, the export demand of U.S falls. Finally, one of the main problem was import prices from Asian countries would fall when these countries compete with U.S firms.