Boffy
What is Money?
Money is anything that is accepted as a form of payment and in the modern world this typically currency. Today's currency is essentially created by governments, and backed by their ability to tax. Thus, money today derives from both the legitimacy of the state and from the revenues of the state. Money is typically issued by a central bank, and it has considerable leeway with respect to how much money it issues. The value of money is determined by the supply of and the demand for money.
The supply of money is controlled, as we've said, by the central bank. Demand for money is based on the need for that currency to make transactions. So demand for Japanese yen is in part related to how much yen people need to buy goods and services from Japan. The same is true of all currencies, including the U.S. dollar
Slide Two: Interest Rate Parity
The concept of interest rate parity is important when analyzing the exposure that a company has to foreign exchange rate risk. The theory is essentially that there is no difference in borrowing in one currency vs. borrowing in another. Thus, a country that has high...
The investor, therefore, should be neutral between investing at a low rate in a country whose currency is expected to hold its value, and at a high rate in a country whose currency is expected to depreciate.
Slide Three: The Puerto Rico Context
Puerto Rico, as a commonwealth territory of the United States, uses the U.S. dollar as its currency. There are advantages and disadvantages to this. A disadvantage is that the USD is not a local currency, and therefore is subject monetary policy that relates to the economy of the United States. The needs of Puerto Rico are not usually taken into consideration when the U.S. Federal Reserve bank sets its monetary policy. This lack of control is a disadvantage in macroeconomic terms, because monetary policy is a lever that can affect the economy of a country. There is a fair degree of separation between the economy of Puerto Rico and the economy of the United States
The primary advantage of using the U.S. dollar, of course, is that there is no exchange rate risk when dealing with American companies. This is an advantage…
Puerto Rico Accounting Laws in Puerto Rico Roger Stein The Rovira Biscuit company has been a mainstay in the Puerto Rican snack market for more than 80 years. First established in 1929, the company specializes in a wide range of cookies, crackers and other comestibles that have continue to be enjoyed by Puerto Rican consumers even to present day. Additionally, Rovira is a company which continues to push forward, striving for additions to
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The first immigrants came with the intention of making it rich and then going back to their home country, but many stayed, which did create a more prosperous island, as more wealth was being circulated in the island's borders, rather than exported back to Spain. This second chapter of coffee prosperity was then followed by a third story told by the children of these agrarian people, who became professionals
Juan Gonzalez has described the Latino experience in the United States. One of the important things that he discusses in the demographics of Latino population in the United States, noting that Latinos are going to be a major demographic nationwide by 2050 and that half of all Americans could have Latino ancestry by the end of the century. This is something that is likely to be transformative in terms of
Both Hurricane Irma and Hurricane Maria hit Puerto Rico hard, with Maria being especially devastating. As of October 24—many weeks after the hurricane hit—the island has barely recovered its essential services. The majority (80%) of the electrical system is back on, and third of the island is without safe drinking water (Saldaña, 2017). As Nedelman (2017) also points out, diseases like Leptospira are spreading through contaminated water. The hurricane is
Crisis Intervention Plan: Hurricane Relief in Puerto Rico I. Goals The goals of the crisis intervention plan are to improve overall resilience. Resilience factors include improvements to public infrastructure, especially water treatment, waste and wastewater services, the power/electricity grid, and the telecommunications grid. Another critical aspect of resilience is inter-agency communications before, during, and after a hurricane. Hospitals, social workers, law enforcement, coast guard, insurance agencies, community leaders, public servants, and the