Suppose on your 21st birthday, your eccentric grandmother invites you over to her house, takes you into her library, removes a black velvet painting of elvis presley from the wall, and opens a hidden safe where she removes 50 crisp $100 bills and hands them to you as a present, claiming you are her favorite grandchild. after your grandmother profusely (and her re-hang elvis) you proceed to your bank and deposit half of your gift in your checking account and half in your savings account.
because of these transactions;

a. m1 and m2 will fall by $2,500.
b. m1 will fall by $2,500, m2 will be unaffected.
c. m1 and m2 will be unaffected.
d. m1 will be unaffected, m2 will fall by $2,500.

Dyed-denim corporation is seeking to lower the costs of value creation and achieve a low-cost position. as a result, it plans to move its manufacturing plant from the u.s. to thailand, which based on company research, is the optimal location for production. this strategic move will most likely allow the company to realize

Acoase solution to a problem of externality ensures that a socially efficient outcome is to

The east asiatic company (eac), a danish company with subsidiaries throughout asia, has been funding its bangkok subsidiary primarily with u.s. dollar debt because of the cost and availability of dollar capital as opposed to thai baht-denominated (b) debt. the treasurer of eac-thailand is considering a 1-year bank loan for $247,000.the current spot rate is b32.03 /$, and the dollar-based interest is 6.78% for the 1-year period. 1-year loans are 12.04% in baht.a. assuming expected inflation rates of 4.3 % and 1.24% in thailand and the united states, respectively, for the coming year, according to purchase power parity, what would the effective cost of funds be in thai baht terms? b. if eac's foreign exchange advisers believe strongly that the thai government wants to push the value of the baht down against the dollar by5% over the coming year (to promote its export competitiveness in dollar markets), what might the effective cost of funds end up being in baht terms? c. if eac could borrow thai baht at 13% per annum, would this be cheaper than either part (a) or part (b) above?