1.How could a higher level of inflation in Thailand affect Blades(assume U.S. inflation remains constant)?

ANSWER: A high level of inflation in Thailand relative to the United States could affect Blades favorably. Generally, if a country’s inflation rate increases relative to the countries with which it trades, consumers and corporations within the country will most likely purchase more goods overseas, as local goods become more expensive. Consequently, Blades’ sales to Thailand may increase.

2. How could competition from firms in Thailand and from U .S. Firms conducting business in Thailand affect Blades?

ANSWER: Blades would be favorably affected relative to Thai roller blade manufacturers and relative to other U.S. roller blade manufacturers with operations in Thailand. Both groups of firms will likely be forced to raise their prices if they want to maintain the same profit margin should inflation in Thailand increase. This is especially true if both groups of firms source their supplies directly from Thailand, so that the prices of these supplies are subject to the higher inflation is Thailand. Conversely, Blades’ cost of goods sold incurred in Thai and is relatively small . Consequently, costs will not be subject to the higher level of inflation in Thailand to a great extent and Blades will probably not have to raise its prices to the same extent as Thai roller blade manufacturers or U.S. manufacturers with operations in Thailand

6. How could a decreasing level of national income in Thailand affect Blades?

ANSWER: At first glance, it would appear that a decreasing level of national income in Thailand could hurt Blades financially, as Thai consumers will have less money to spend. Furthermore, this effect may be magnified because Blades manufactures a leisure product, which is probably one of the first products Thai consumers will stop buying. The