What is a multinational enterprise? - ANS-any business that has operating branches,
subsidiaries, or affiliates located in foreign countries
What are assets? - ANS-Debt securities issued by governments (e.g., U.S. Tre
...
What is a multinational enterprise? - ANS-any business that has operating branches,
subsidiaries, or affiliates located in foreign countries
What are assets? - ANS-Debt securities issued by governments (e.g., U.S. Treasury
Bonds). These form the baseline for other forms of financing.
What are institutions? - ANS-The central banks, commercial, and investment banks.
Their health keeps the global financial system stable.
What are linkages? - ANS-The interbank networks using currency. Without ready
exchange of currencies the market is hard-pressed to operate efficiently.
Eurocurrencies - ANS-These are domestic currencies of one country on deposit in a
second country (major linkages in the global capital market)
Eurocurrencies Interest Rates - ANS-Interest rate is referred to as the LIBOR.-
Oftentimes a low spread exists with deposit and loan rates.
Theory of Comparative Advantage - ANS-a theory which states that countries benefit
from specializing in (and exporting) goods and services in which they have relative
advantage, and they benefit from importing goods and services in which they have a
relative disadvantage
Comparative advantage shifts... - ANS-Over time, as less developed countries become
developed and realize their latent opportunities
What does the classical model of comparative advantage not really address ? - ANSThe effect of uncertainty and information costs, the role of differentiated products in
imperfectly competitive markets, and economies of scale
What is comparative advantage of the 21st Century more based on? - ANS-Services,
and their cross-border facilitation by telecommunications and the Internet.
It takes a relative advantage in costs, not just an absolute advantage, to create... - ANSComparative advantage
Name 4 key limitations of the comparative advantage theory -
Continues...
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