Exam 2: Globalization and the Multinational Firm

Since the end of World War I,the dominant global currency has been the

Nestlé,a well-known Swiss corporation,

Comparative advantage

The first two columns give the maximum daily amounts of beer and whiskey that Southern Ireland and Northern Ireland can produce when they completely specialize in one or another product.The last two columns give each country's consumption without trade. Maxirnumn beer production Maxirnum whiskey production Beer consumption without trade Beer consurnption without trade Northem Irelard Southem 500 1500 300 600 bottles Ireland 1200 600 400 bottles In which product does Northern Ireland have a comparative advantage in producing?

Financial managers of MNCs should

The ascendance of the dollar reflects several key factors,such as

When individual investors become aware of overseas investment opportunities and are willing to diversify their portfolios internationally,

Suppose that you are a U.S.producer of a commodity good competing with foreign producers.Your inputs of production are priced in dollars and you sell your output in dollars.If the U.S.currency depreciates against the currencies of our trading partners,

Suppose that country A is twice as good at producing widgets as country B.If the currency of B is twice as valuable as the currency of A,

The massive privatization that is currently taking place in developing and formerly socialist countries

Privatization

The table below shows the bushels of wheat and the bottles of beer that North and South Dakota can produce per day of labor under two different hypothetical situations (Cases I and II). Case I Case II South Dakota North Dakota South Dakota North Dakota Wheat (bushels) 4 1 3 1 Beer bottles) 1 2 4 2 What is the relative price of wheat in North Dakota prior to trade in Case II?

The first two columns give the maximum daily amounts of beer and whiskey that Southern Ireland and Northern Ireland can produce when they completely specialize in one or another product.The last two columns give each country's consumption without trade. Maxirnumn beer production Maxirnum whiskey production Beer consumption without trade Beer consurnption without trade Northem Irelard Southem 500 1500 300 600 bottles Ireland 1200 600 400 bottles Is Northern Ireland better off when it trades with Southern Ireland?

The table below shows the bushels of wheat and the bottles of beer that North and South Dakota can produce per day of labor under two different hypothetical situations (Cases I and II). Case I Case II South Dakota North Dakota South Dakota North Dakota Wheat (bushels) 4 1 3 1 Beer bottles) 1 2 4 2 For case II,in what range must the "international" price of wheat fall? (i.e.,if North and South Dakota trade only with each other,what is the possible range of prices?)

Suppose Mexico is a major export market for your U.S.-based company and the Mexican peso depreciates drastically against the U.S.dollar,as it did in December 1994.This means that

Suppose you start with $100 and buy stock for £50 when the exchange rate is £1 = $2.One year later,the stock rises to £60.You are happy with your 20 percent return on the stock,but when you sell the stock and exchange your £60 for dollars,you only get $45 since the pound has fallen to £1 = $0.75.This loss of value is an example of

The gains from trade

Country A can produce 10 yards of textiles or 6 pounds of food per unit of input.Country B can produce 8 yards of textiles or 5 pounds of food per unit of input.Which of the following statements is true?

Country A can produce 10 yards of textiles or 6 pounds of food per unit of input.Compute the opportunity cost of producing one additional unit of food instead of textiles.

Privatization refers to the process of