...economic slowdown? The first half of 2013 , the global economy signs of weakening , with significant differences between regions. As mentioned , the euro zone was in recession DUE queue persist in some countries of the ESA region's sovereign debt problems and the fragility of their financial systems. : In addition , US economic growth was moderate , while the productive activity of various Emerging economies slowed , BECAUSE of both the slowdown in the industrialized countries and the slowdown in their internal demands. Mexico has a 2.2 percent average tariff rate. It has reduced tariff and non-tariff barriers unilaterally and through trade agreements like the Pacific Alliance. A law passed in December 2013 will partially open the energy sector to foreign investment. The financial sector is relatively small and lacks dynamism. Mexico needs to build a deeper and more accessible banking system. The OECD bemoaned Mexico’s record: it is alone among big emerging markets in suffering from sustained declines in the broadest measure of productivity during the past decade. In order for GDP growth to rise from its current potential of about 3% to a healthier 4%, the productivity trend must be reversed through structural reforms, it said. Mexico’s three main political parties, which have created a pact to promote more than 100 such changes, are aiming for 5%. How much is our country´s external debt? In which way does affect us and our economy? Our external debt is nearly of 443,012,459...
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...guidance of the Partido Revolutionario Institutional, Mexico seemed destined to remain a prosperous authoritarian regime with a thin veneer of democratic legitimacy. However, untested economic policies swept through the country as they did through the much of the world in the 1980s with the help of the "Washington consensus." With the removal of social security nets during an extended period of economic upheaval, Mexico's ruling party was replaced in a wave of popular discontent. The new leadership, with the institutions of an authoritarian regime, did little to relieve the nation of widespread poverty. As a result, the impoverished were unable to either escape crushing deprivation legally or mobilize to replace the government without fear of reprisal. Insurgency, in the familiar form of guerrilla movements and the novel form of increasingly powerful drug gangs, was a natural response to government failure without legitimate avenues of resistance. Mexico now hangs in the balance, unable to reform due to persistent insecurity, and unable to reestablish the balance of economic prosperity which had allowed the authoritarian system to exist. Section I: Failed democratization Following the Mexican Revolution of 1910, the PRI had an effective...
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...Mexico Needed Strategies to Retain & Attract Maquiladoras In the past, challenges on the Mexican side for competitiveness in retaining the maquiladoras in the country have included high business taxes, pricey highway tolls and the need for energy reforms (Canas, Coronado & Gilmer, 2004). Also, the cost of labor and services and international competition have thwarted the ability of Mexico to retain maquilas. In this paper we see how Mexico’s ways of doing business, how the government and other factors influence the retention or attractiveness of maquilas and what Mexico, as a country, could do/continue to do in order to place itself in a more competitive place. In the early 2000s, the Mexican maquiladora industry slowed, losing in about sixteen months almost 278,000 jobs. Being that maquilas make up a major part of trade between Mexico and the United States, this was a huge hinder for the Mexican economy. According to a speaker at a 2003 conference pertaining to the downturn of maquilas in Mexico, there ae about 26,000 United States companies that “supply maquiladoras with machinery, raw materials and components” (Canas, Coronado & Gilmer, 2004). The effect that maquiladoras have had on areas such as the border have been positive, as laborers from the interior of Mexico migrate to areas in search of these job opportunities (Beck, 2012). However, as I mention below, violence in the northern area of Mexico has also hurt the availability of skilled workers, as they seek safety...
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...Introduction to the topic: As recent turmoil in the financial markets has demonstrated, macroeconomic fluctuations in the economy can create a difficult operating environment for the firm. This situation is further complicated by the fact that it is an environment over which the firm has little control. Even though the firm cannot control the environment, it can still react to economic conditions in ways that minimize its uncertainty as long as it understands the constraints it is facing. The purpose of this course is to help in an understanding of the macroeconomy. Macroeconomics is that branch of economics that seeks to understand and explain changes in output, general prices, employment, interest rates, foreign exchange rates, the balance of payments, and other related phenomena. Emphasis is given in this course to analyzing financial markets where interest rates are determined. We will spend more time than usual on the financial markets this year in response to the uncertainty in that environment today. Also, since the macroeconomic environment in this country is increasingly influenced by international conditions, the factors underlying trade and exchange rate movements are also discussed. The study of macroeconomics is interesting and frustrating at the same time. It is interesting because the topics we discuss relate to information you see presented in the newspapers every day. The readings and topics we review will, for the most part, already be familiar to you all...
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...years, suddenly realized they could not repay it. The main culprits, Mexico, Brazil and Argentina, borrowed money for development and infrastructure programmes. (causes ) Their economies were booming, and banks were happy to provide loans to the point where Latin American debt quadrupled in seven years. When the world’s economy went into recession in the late 1970s the problem compounded itself. Interest rates on bond payments rose while Latin American currencies plummeted. The crisis officially kicked off in August 1982 when Mexico’s finance minister Jesus Silva-Herzog said the country could not pay its bills. (how they overcome) It took years to sort out the crisis, with Latin American nations eventually turning to the IMF for a bailout in exchange for pro-market reforms and austerity programmes. It also led in 1989 to the novel creation of Brady bonds, which were designed to reduce debt in these countries by converting distressed sovereign debt into a number of different types of bonds. Furthermore, banks could exchange claims on these debts for tradable assets, which enabled them to get the debt off their balance sheets. 2) Savings and loans crisis – 1980s: while the solution to the Latin American crisis was being put together, a domestic one was happening right in front of the US regulators. The so-called savings and loans crisis took place throughout the 1980s and even into the early 1990s, when...
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...International Economics, 9e (Krugman et al.) Chapter 1 Introduction 1.1 What Is International Economics About? 1) Historians of economic thought often describe ________ written by ________ and published in ________ as the first real exposition of an economic model. A) "Of the Balance of Trade," David Hume, 1776 B) "Wealth of Nations," David Hume, 1758 C) "Wealth of Nations," Adam Smith, 1758 D) "Wealth of Nations," Adam Smith, 1776 E) "Of the Balance of Trade," David Hume, 1758 Answer: E Page Ref: 1 Difficulty: Easy Question Status: New 2) From 1960 to 2009, A) the U.S. economy roughly tripled in size. B) U.S. imports roughly tripled in size. C) the share of US Trade in the economy roughly tripled in size. D) U.S. Imports roughly tripled as compared to U.S. exports. E) U.S. exports roughly tripled in size. Answer: C Page Ref: 1 Difficulty: Easy Question Status: New AACSB Codes: Dynamics of the Global Economy 3) The United States is less dependent on trade than most other countries because A) the United States is a relatively large country with diverse resources. B) the United States is a "Superpower." C) the military power of the United States makes it less dependent on anything. D) the United States invests in many other countries. E) many countries invest in the United States. Answer: A Page Ref: 2 Difficulty: Easy Question Status: New AACSB Codes: Dynamics of the Global Economy 4) Ancient theories of international...
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...Mexican Exterior Commerce Law Foreign trade is a term that can be explained as the number of imports and exports from one place to another that affect the trade balance “Foreign trade is that part of the external sector of the economy that regulates the exchange of goods and products between suppliers and consumers residing in two or more customs territories and / or other countries whose operations were statistically trade balance” This law is to regulate and promote foreign trade, increase competitiveness of foreign trade, increase competitiveness of the national economy, promote the use of the national economy, promote the efficient use of productive resources of the country, resource efficient productive country, properly integrate the Mexican economy to international and contribute to raising the welfare of the population. The goal is to help producers of goods and services, exporters, and importers conduct their business through the establishment of rules and dispute settlement Set of legal systems, national order and international character, governing the relationships necessary on this matter between public bodies between belonging to different states and individuals who perform acts listed in Foreign Trade. Fundamental objective is to regulate the output entraday goods to / from national territory on fiscal and administrative procedures. Study, plan and propose to the Federal Executive tariff changes. regulatory measures and non-tariff restrictions on the export...
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...The territoriality principle holds that governments have the right to rule themselves as they see fit. True False The elimination of discrimination with respect to employment and occupation is a principle of the Global Compact which applies to: | A. | Human rights | | B. | Labor | | C. | Environment | | D. | Anticorruption | Question 3 of 40 (worth 0.4 points) Which of the following statements is not true of Hungary's economic reform measures? | A. | Hungary had a head start on the other former communist-bloc countries in terms of adopting economic reform measures | | B. | MNCs have been making direct investments in Hungary, as in the case of General Electric's purchase of Tungsram | | C. | Western firms have been entering into joint ventures with local companies in Hungary, attracted by the low cost of highly skilled, professional labor | | D. | In Hungary, state-owned hotels have been privatized | Question 4 of 40 (worth 0.4 points) Identify the emerging market which is projected to have the largest market size in 2010. | A. | China | | B. | Mexico | | C. | India | | D. | Argentina | Question 5 of 40 (worth 0.2 points) The FCPA makes it illegal to influence foreign officials through the granting of favorable tariff rates. True False Question 6 of 40 (worth 0.2 points) Which of the following statements with to the Transparent Agents Against Contracting Entities (TRACE) is incorrect? | A. | It was developed...
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...January 1994 there was a new development; the North American Free Trade Agreement (NAFTA) was instituted between the United States, Mexico, and Canada creating the largest free trade area and richest market in the world. This one of the most important and wide-reaching treaties in the world. A treaty between Canada, Mexico, and the United States that was designed to foster greater trade between the three countries. It was one of interesting prospect and looked upon as the start of globalization. The attempt was to help with financial situations involving the all countries in the North American continent, especially those of United States, Mexico, and Canada. One major problem encountered were the economic stabilities of each country, especially in Mexico. There were issues of foreign debt, balance of payment problems, and exchange rate fluctuations. The agreement does well to commit to standards on environmental protection and labor laws but still strives to enforce those laws. The agreement did have some goals to help foster the partnerships between the countries. First and foremost to reduce trade barriers. These barriers cause imports to be of a higher priced than local goods. The object of the agreement was to participate in free" or "open" when goods and services can move into markets without restrictions, and prices are determined by supply and demand. Nations sometimes erect barriers to this free movement of goods and services, such as quotas limiting the quantity of...
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...YUM! BRANDS, PIZZA HUT, AND KFC Teaching Note Overview This case describes the evolution of the global fast-food industry and Yum! Brands, Inc.’s development of the Pizza Hut and KFC franchises worldwide. It focuses on international business risk assessment and develops a model of country evaluation that students can use to analyze international business and market entry decisions in a variety of industries, regions, and countries. Teaching Objectives 1. Develop skills in industry analysis 2. Develop skills in global industry analysis. 3. Develop knowledge of franchising and the costs and benefits of expanding globally using franchises versus company-owned stores. 4. Develop skills in international business risk analysis. 5. Develop skills in country portfolio evaluation and assessment. Suggestions for Using the Case This case has been used successfully in undergraduate, MBA, and Executive MBA classes in strategic management, marketing management, and international business. It can be used in undergraduate courses to develop student skills in industry structure analysis, strategy analysis, and international business risk assessment. The teaching note is designed to give students practice in each of these three areas. Instructors may choose to use the case to discuss only one of these three areas during a single class period or to cover all three areas over two class periods. The case can be also...
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...Chapter1 Quiz | 1 INCORRECT | | __________ is the performance of business activities designed to plan, price, promote, and direct the flow of a company's goods and services to consumers or users in more than one nation for a profit. | | | A) | Global strategy | | | B) | Marketing | | | C) | Marketing concept | | | D) | Regional marketing concept | | | E) | International marketing | | | | | | | | 2 INCORRECT | | Which of the following is the most critical difference between domestic marketing and international marketing? | | | A) | The environment in which marketing plans must be implemented | | | B) | The different concepts of marketing | | | C) | The change in marketing goals | | | D) | The difference in technological standards | | | E) | The change in corporate objectives | | | | | | | | 3 CORRECT | | Dylan is planning to take his successful fast food venture global. Which of the following is the reason why his task could be more complicated than that of the domestic marketer? | | | A) | The international marketer must change his marketing goals in the various countries of operation. | | | B) | The international marketer must deal with at least two levels of uncontrollable uncertainty instead of one. | | | C) | Technological standardization could challenge effective customization in different markets. | | | D) | International trade regulations still do not allow free trade...
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...INTERNATIONAL BUSINESS MANAGEMEMENT ASSIGNMENT 2 Question 1 When the Mexico’s currency is pegged to the United States dollar, it means that the exchange rate is set and artificially maintained by the government. The rate will not fluctuate from day to day. The pegged exchange rate is usually used to stabilize the value of a currency against the currency it is pegged to which makes trade and investments between the two currency areas easier and more predictable. Pegged exchange rate system can also be used as a means to control inflation. The difference between a free/clean float, a managed float and fixed exchange rate systems of exchange rate is that: Clean/free float In the clean/free float also known as a pure exchange rate the value of a currency, which is the exchange rate is determined purely by market forces of supply and demand. Clean floats can only exist where there is no government interference, as would be the case in a purely capitalistic economy. Therefore, clean floats are a result of Laissez-Faire or free market economies. Managed float In a managed float also known as “dirty float” the government or the country's central bank occasionally intervenes to change the direction of the value of the country's currency. In most instances, the intervention aspect of a dirty float system is meant to act as a buffer against an external economic shock before its effects become truly disruptive to the domestic economy. Therefore, with a managed or dirty float the government...
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...to spread around the globe. In the United States, where the crisis began, economic misery was widespread: The housing market collapsed, real estate values plummeted, credit tightened, and job growth slowed (see Exhibit 2-1). As the price of oil passed the $100 per barrel benchmark, the average price of a gallon of gasoline rose to $4. American consumers were, indeed, less willing and less able to buy. However, the crisis was not confined to the United States alone. Consumer-goods exporters in Asia, which Exhibit 2-1: The bursting of the global real estate bubble was only one aspect of the worst recession in decades. The ripple effects from the economic turmoil were felt around the world. In 2007, just before the onset of the crisis, Mexico’s Cemex SAB acquired an Australian company, Rinker Materials, for $15.3 billion. Unfortunately, one of Rinker’s primary sources of revenue was the United States housing market. With that market collapsing, Cemex chief Lorenzo Zambrano was forced to sell assets and cut spending in an effort to trim his...
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...PAUL KRUGMAN WINNER OF THE NOBEL PRIZE IN ECONOMICS THE RETURN OF DEPRESSION E C O N O M CS AND T H E C R I S I S OF I 2 0 0 8 ISBN 9 7 8 - 0 - 3 9 3 - 0 7 1 0 1 - 6 W USA $24.95 CAN. $27.50 hat better guide could we have to the 2008 financial crisis and its resolution than our newest Nobel Laureate in Economics, the prolific columnist and author Paul Krugman? In his prescient 1999 classic, The Return of Depression Economics, Krugman surveyed the economic crises that had swept across Asia and Latin America and pointed out that they were a warning for all of us: like diseases that have become resistant to antibiotics, the economic maladies that caused the Great Depression were making a comeback. In the years that followed, as Wall Street boomed and financial wheeler-dealers made vast profits, the international crises of the 1990s faded from memory. But now depression economics has come to America. When the great housing bubble of the mid-2000s burst, the U.S. financial system proved as vulnerable as those of developing countries caught up in earlier crises—and a replay of the 1930s seems all too possible. In this new, greatly updated edition of The Return of Depression Economics, Krugman shows how the failure of regulation to keep pace with an increasingly out-of-control financial system set the United States and the world up for the greatest financial crisis since the 1930s. He also lays out the steps that must be taken...
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...for doing business internationally. However, that does not always mean that they will be open-minded. When negotiating business here, realize that people may expect things to be done ‘their way,’ in which case you should strive to understand, and occasionally emulate, their behavior in order to gain the acceptance of your Mexican counter- parts. Though the country’s culture is quite homogeneous overall, business cultures differ somewhat be- tween the North and the South. People in the North tend to be more business-focused and often have a high sense of urgency. This may be more relaxed in Southern Mexico, where the stereotypical mañana attitude of conducting business at a leisurely pace can still be found. Relationships and Respect Mexico’s culture is generally group-oriented. Asserting individual preferences may be seen as less important than having a sense of belonging to a group, conforming to its norms, and maintaining harmony among its members. Building lasting and trusting personal relationships is therefore very important to most Mexicans, who often find it essential to establish strong bonds prior to closing any deals. People in this country prefer to do business with those they know, like, and trust. If they initially seem suspicious and non-committal, you may be able to overcome this with consistent friendliness and goodwill. Establishing productive business cooperation requires a long-term per- spective and...
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