221. Describe what else can be used instead of money as a store of value

248. Explain what structural unemployment means.
Structural unemployment is unemployment caused by a mismatch of the skills of workers out of work and the skills required for existing job opportunities. Note that changing jobs and lack of job information are not problems for frictionally unemployed workers. While frictionally unemployed
workers have marketable skills, structurally unemployed workers require additional education or retraining. Changes in the structure of the economy create the following three causes of structural unemployment. First, workers might face joblessness because they lack the education or the job-related skills to perform available jobs. This type of structural unemployment particularly
affects teenagers and minority groups, but other groups of workers can be affected as well. Second, the consuming public may decide to increase the demand for Mazda RX-7s and decrease the demand for Chevrolet corvettes. This shift in demand would cause U.S. auto workers who lose their jobs and
find jobs in another idustry in another location. Third, implementation of the latest technology may also increase the pool of structural unemployment in a particular industry and region. For example, the U.S. textile industry, located primarily in the South, can fight less expensive foreign textile imports by installing modern machinery.
249. Explain what discount rate means.
The discount rate is the interest rate used to determine the present value of future cash flows in a discounted cash flow (DCF) analysis. This helps determine if the future cash flows from a project or investment will be worth more than the capital outlay needed to fund the project or investment in the present. The cost of capital is the minimum rate needed to justify the cost of a new venture, where the discount rate is the number that needs to meet or exceed the cost of capital.
The cost of capital refers to the required return needed on a project or investment to make it worthwhile.
The discount rate is the interest rate used to calculate the present value of future cash flows from a project or investment.
Many companies calculate their WACC and use it as their discount rate when budgeting for a new project.1
250. Explain what exchange rate means.
exchange rate, the price of a country’s money in relation to another country’s money. An exchange rate is “fixed” when countries use gold or another agreed-upon standard, and each currency is worth a specific measure of the metal or other standard. An exchange rate is “floating” when supply and demand or speculation sets exchange rates (conversion units). If a country imports large quantities of goods, the demand will push up the exchange rate for that country, making the imported goods more expensive to buyers in that country. As the goods become more expensive, demand drops, and that country’s money becomes cheaper in relation to other countries’ money. Then the country’s goods become cheaper to buyers abroad, demand rises, and exports from the country increase.