Government Mandates Impact International Transactions

Have you ever wondered how the goods and services you purchase become available to you, and have you ever wondered how the prices are determined? Even though economics involves many concepts, supply and demand, as well as trade, are among the most important forces in an economy because of their effect on prices, consumer behavior and economic growth.

So when demand increases and a supply doesn’t change, a shift in price will happen. This shift will move to the right causing a new Equilibrium.

Exchange rates play a pivotal role in the relationships between individual economies and the global economy. Almost all financial flows are processed through the exchange rate, as a result the movements and fluctuations of the exchange have a significant impact on international competitiveness, trade flows, investment decisions and many other factors within the economy. Due to the increasing globalisation of the world economy, trade and financial flows are becoming more accessible

The determinants of demand can causes some effects on demand curve . if demand increases this leads

price changes, whether they be increasing or decreasing, do not change demand ­ they change the

The law of supply and demand states that when there is high demand for a good or service, the price of the good or service rises. If there is a large supply of a good or service but not enough demand for the good or service, the price falls. Each transaction involves a buyer and a seller. The seller places an offer for an item and the buyer may accept or reject the offer. When there is a high demand for certain good in a particular city or country and a lack of supply for a quality good, the prices tend to rise as well. Also, when there is no demand for a certain good due to a weak economy and an

Large swings in stock and commodity prices can happen in minutes and trigger an instant requirement for cash liquidity that could become the stock market tipping point. Derivatives are believed to have played a large role in 2008 when the phony valuations of mortgage-backed securities (a derivative) helped trigger the largest market crash in history up to that date.

Macroeconomics, (Hubbard/O’Brien) Chapter 24 Aggregate Demand and Aggregate Supply Analysis 1) The static aggregate demand and aggregate supply curve model helps explain A) short term fluctuations in real GDP and the price level. B) long term growth. C) price fluctuations in an individual market.

There are several factors that can shift the demand and supply functions which alters the bonds market quantity, price and interest rates. The demand and supply functions explain interest rates behavior during these business cycles and recessions.

There is a risk that a business ' operations or an investment 's value will be affected by changes in exchange rates. For example, if money must be concerted into a different currency to make a certain investment, changes in the value of the currency relative to the American dollar will affect the total loss or gain on the investment when the money is converted back. This risk usually affects businesses, but it can also affect individual investors who make international investments, also called currency risk (Investorworld).

2) When the stock markets become volatile across many sectors, it is called a "correction." A correction need not mean losses, in fact, a good investment manager can ride these correction crests to emerge a winner in the market.

Furthermore, the price mechanism also has several impacts, such as a change in demand and supply, in the free and competitive

It starts with a decrease in total supply or an increase in the cost of that supply costs. Suppliers raise prices because they know consumers will pay it. That situation is calledinelastic demand.

This means that one of the most important factor for exchange rates movement is the different inflation rates between

Throughout the history of finance mankind has devised various ways to predict future costs, price changes, changes in supply and demand, and changes to bond and stock prices. We’ve created sophisticated models and formulas to help us make financial decisions. Although, we can’t always prepare for the inevitable depression, inflation, stock bubble bursts, long or short term shocks to the economy, and changes in taste, we can try our best to protect ourselves financially from our own irrational behavior and decisions when it comes to finance. With our sophisticated technology shouldn’t everyone generally come to the same conclusion when it comes to changes in the stock or bond market? What causes people to act differently to