HW#1
FIN 525 International Financial Management
Fall/2014
Please read and summarize the two articles attached below: 1) Why Some Countries and Cities Are So Much More Expensive Than Others 2) Are US Multinationals Abandoning America?
Write a 1-2 page summary for each. It’s due in one week. Please bring a hardcopy to class.

Why Some Countries and Cities Are So Much More Expensive Than Others
By Derek Thompson
The Atlantic Magazine
Our special report on the world of prices wouldn't be complete without asking, and trying to answer, a big, and surprisingly complex, question: How do pricey countries get that way?
[pic]
Reuters
ChinaZenaide Muneton is a nanny in New York City. Last year, she made more than $200,000, Planet Money reports. Yes, with five zeros.
How in the world can Manhattan nannies be worth $200,000 a year? One answer is that they're more talented than your typical babysitter. The highest-paid nannies can cook four-course macrobiotic meals and know their way around a Zamboni (those are actual examples of nanny skills). But the number-one reason why nannies in Manhattan can get paid $200,000 is very simple. Rich families can afford it. And in the market for locally-delivered services, like caring for a child, prices rise as high as the clientele can afford to pay.
What $200,000 nannies have to do with the price of tea in
Six-figure nannies don't rule the world, but they help explain the world of prices. On a global scale, the price of locally-delivered services, such as nannies and barbers, fluctuate wildly from country to country. A simple haircut in Uzbekistan is much, much cheaper than a simple haircut in Beverly Hills. But lots of goods can be bought and enjoyed thousands of miles away from where they're made, like automobiles and paintings. If you're in the market for an original Picasso, it won't matter whether you buy the