Exam 1: Globalization and the Multinational Firm

An MNC may gain from its global presence by

If the international price of beer is one keg of beer = 1 bottle of whiskey,how much whiskey will Northern Ireland consume? Each country completely specializes and 500 kegs of beer are traded for 500 bottles of whiskey.

Deregulated financial markets and heightened competition in financial services provided an environment for financial innovations that resulted in the introduction of various instruments.Examples of these innovative instruments include

The Nestlé Corporation,a well-known Swiss MNC,used to issue two different classes of common stock,bearer shares and registered shares,and foreigners were allowed to hold only

The owners of a business are the

Restrictions or impediments to free trade include such things as

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,

In David Ricardo's theory of comparative advantage,

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

What is the price of beer without trade in Southern Ireland?

When corporate governance breaks down

Production of goods and services has become globalized to a large extent as a result of

What is the relative price of a gun in terms of butter in South Carolina?

The comparative advantage argument in free trade

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

Recent corporate scandals at firms such as Enron,WorldCom and the Italian firm Parmalat

Deregulation of world financial markets

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 other product. The last two columns give each country's consumption without trade. Maximum beer production Maximum whiskey production Beer consumption without trade Whiskey consumption without trade Northern Ireland 500 kegs 1500 bottles 300 600 bottles Southern Ireland 1200 kegs 800 bottles 600 kegs 400 bottles -Is Northern Ireland better off when it trades with Southern Ireland?

What major dimension sets apart international finance from domestic finance?

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 other product. The last two columns give each country's consumption without trade. Maximum beer production Maximum whiskey production Beer consumption without trade Whiskey consumption without trade Northern Ireland 500 kegs 1500 bottles 300 600 bottles Southern Ireland 1200 kegs 800 bottles 600 kegs 400 bottles -Now suppose that Southern workers are paid €1 per day but the Northern workers receive a raise to £2 per day.Will trade be possible at the exchange rate you found in the question before the last question?