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supply curve for Australian dollars go backwards ? occur when A. the Australian interest rate differential increases. B. the expected future exchange rate falls. C. the current exchange rate falls. D. the Australian interest rate differential decreases

What is the Supply Curve for Australian Dollars?

The Supply Curve for Australian Dollars is a graphical representation of the relationship between the quantity of Australian dollars being supplied and the exchange rate. The supply curve shows the amount of Australian dollars that sellers are willing to supply at different exchange rates.

What Causes the Supply Curve for Australian Dollars to Go Backwards?

The Supply Curve for Australian Dollars will go backwards when there is a change in the factors that affect the exchange rate. The most common causes for the supply curve to go backwards are:

A. The Australian Interest Rate Differential Increases

When the Australian interest rate differential (the difference between the interest rates of Australia and other countries) increases, the demand for Australian dollars will increase and the supply curve will go backwards. This is because investors are attracted to the higher Australian interest rates, thus increasing the demand for Australian dollars.

B. The Expected Future Exchange Rate Falls

When the expected future exchange rate falls, the demand for Australian dollars will decrease and the supply curve will go backwards. This is because investors expect the exchange rate to fall in the future so they are not willing to buy Australian dollars at the current exchange rate.

C. The Current Exchange Rate Falls

When the current exchange rate falls, the demand for Australian dollars will decrease and the supply curve will go backwards. This is because investors are not willing to buy Australian dollars at a lower exchange rate.

D. The Australian Interest Rate Differential Decreases

When the Australian interest rate differential decreases, the demand for Australian dollars will decrease and the supply curve will go backwards. This is because investors are less attracted to the lower Australian interest rates, thus decreasing the demand for Australian dollars.

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Suppose 20 households in a community have the demand function Q = 2 – 0.001P each for streetlights while 5 other households have the demand function Q = 3 – 0.002P each for streetlights. Here, Q refers to the number of streetlights to erect near their home while P is the unit price of each streetlight. The cost of building each streetlight is GHS 45. a) Assuming each household is making its separate purchase decision, find the market demand function for streetlights for all 25 households b) Assuming each household is making its separate purchase decision, find the equilibrium price and number of streetlights in the community c) Assuming a community association has decided to coordinate this streetlight purchase decision problem. The community leader uses the demand functions to determine how much each household is willing to contribute (willingness to pay) towards the first, second, third, etc streetlight. The first light is purchased only when the sum of individual households’ contributions is at least equal to the marginal cost of streetlights. Find out how many streetlights are purchased for this community in equilibrium. Explain your answers in details

Suppose 20 households in a community have the demand function Q = 2 – 0.001P each for streetlights while 5 other households have the demand function Q = 3 – 0.002P each for streetlights. Here, Q refers to the number of streetlights to erect near their home while P is the unit price of each streetlight. The cost of building each streetlight is GHS 45. a) Assuming each household is making its separate purchase decision, find the market demand function for streetlights for all 25 households b) Assuming each household is making its separate purchase decision, find the equilibrium price and number of streetlights in the community c) Assuming a community association has decided to coordinate this streetlight purchase decision problem. The community leader uses the demand functions to determine how much each household is willing to contribute (willingness to pay) towards the first, second, third, etc streetlight. The first light is purchased only when the sum of individual households’ contributions is at least equal to the marginal cost of streetlights. Find out how many streetlights are purchased for this community in equilibrium.

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