Economics Paper in MLA format including 2 primary source documents Term

Economics in MLA format including 2 primary source documents - Term Paper Example The price where the curves intersect is called the market price and this is where both the consumers and producers are willing to supply a certain quantity. The demand curve is downward sloping due to the fact that as the price reduces, the ability and willingness to purchase on the consumers’ part increases meaning that there is negative relationship between the quantity demanded and price of the product. On the other hand, the opposite can be said for the supply curve. A positive relationship exists between the quantity supplied and price. As the price increases, the producers are more capable and willing to supply the product and hence the upward sloping curve. Consumer surplus is when a consumer is getting to buy a product at a price which is lower than that which the consumer is willing to pay. Therefore all the area between the demand curve and the market price line is classified as consumer surplus. Producer surplus is the excess which the producer earns as a result of the difference in the market price and the quantity the producer is willing to supply at certain prices. Producer surplus is the area below the market price and above supply curve. Business and Labor The mergers process may be beneficial for the industry in the short run specifically for industries which involve huge costs and research and development projects. The greater financial pool available to these companies is required to undertake large research operations and improve new technologies. It also is about the efficiency of the companies that is if they have been able to increase their efficiency through this process and whether they have passed this efficiency to the buyers. The mergers process may increase the efficiency because now at a larger operations base, the company may be able to achieve economies of scale which is the reduction of average production costs as a result of the increase in production. Coming towards the minimum wage laws, the governments often introduce the policies of minimum wage which acts as a floor to the price of labor employed. When the government enforces the laws of minimum wages, then the market forces are disturbed and equilibrium ceases to exist creating a gap between the demand and supply, which is of labor in this case. The disequilibrium in theory results in a rise in the supply of labor but the demand reduces as the labor is now more costly. However, the magnitude by which this disequilibrium is caused depends upon the circumstances prevailing in each economy and varies from country to country. United States Finance The economy of United States of America was performing very well at the start of the century but then went under deep recession in the year 2008 with the credit crunch and all the financial institutions seem to crumble at the same time. People started to default, and the society and institutions started to face liquidity issues. Soon with this credit crunch, the debts started to rise and the economy sta rted to experience its effects which included the rising unemployment rates and decreasing gross domestic product (GDP) of US economy. Since the financial crisis struck in the year 2008, the US debt has been very high. According to a recent news article, the United States debt is nearly as much as the total value of all its goods and services produced in the US during the financial year. CNBC reports that the total value of the US debt is $14.96 trillion which means that the

International Business Finance Research Paper Example | Topics and Well Written Essays - 2000 words

International Business Finance - Research Paper Example re liable to pay the interest at the pre-determined rate throughout the tenure of the bonds and repay the face value at the time of maturity which means there is no question of incurring loss for the investors out of investing in such financial instrument (Burger, Sengupta, Warnock and Warnock, 2014). However, in recent times it has been noticed in Europe that in some countries such as Denmark, Germany and Switzerland, the government bonds as well as corporate bonds are yielding the investors a negative return. To be more specific, such negative yields are not inflation-adjusted returns; the bonds are simply yielding the investors less than their capital (Ivashina and Becker, 2015). Therefore, the research paper will aim to investigate regarding credibility of bonds as a financial instrument, their buyers and the factors that may influence such investor to purchase bonds even with negative returns in order to find out the rationale behind such negative return and to identify buyersâ €™ motivation behind purchasing such bonds with negative yield. For the purpose of analysis, relevant economic theory that may justify the reason behind buying bonds with negative yields shall also be incorporated. Traditionally, bond is considered to be one of the most secured investment options among all other financial instruments available in the financial system. Dann (2005) has defined financial instrument as a mechanism that institutes a contractual right between the borrower and lender to receive and deliver some of money. Bond is a financial instrument that establishes a indenture between the two parties: bond holder and issuer. The indenture specifies that the issuer will pay a fixed or variable rate of interest during the whole life of the bond and will refund the principal amount at the time of maturity (Maginn, Tuttle, McLeavey and Pinto, 2010). Bonds can be of various types such as fixed and floating rate of bonds, zero coupon bonds, perpetual bonds, inflation-index bonds