Case 6.1: Balance Of Payments- Q1) What are the major concerns from the external sector? Ans) Rising CAD is a major concern from the external sector. The current account has consistently been in deficit since 2004-05. The CAD has increased from -0.3% of GDP in 2004-05 to an estimated -4.2% of GDP in 2011-12. The CAD as a percentage of GDP in 2011-12 has reached an alarmingly high rate. We are in a situation of rising CAD in the midst of a slowing economy. A sharply deteriorating merchandise trade
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China Fair Market Value Undervalued currency means that basically the government wants to keep the currency below its fair market value. So what does it mean though? Analyst argue that in a free market the Chinese market the Chinese Yuan would definitely appreciate because of the intense demand for Chinese goods and the large Chinese Current Account Surplus. China has to be on to something because they have managed to accumulate 2.4 trillion of foreign currency reserves. China is ultimately trying
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has helped shield China from the kind of jolts recently administered to other Asian economies where a higher proportion of investment was indirect -- such as bank lending or stock portfolios." Strong evidence of China's emergence as a global economic powerhouse are these twin facts: a large foreign exchange reserve that China is holding, especially in dollar-denominated assets, and a large amount of foreign direct investment (FDI) going into China that rivals FDI into the United States. A popular
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RELATE M. PORTER’S DIAMOND OF NATIONAL ADVANTAGE TO INTERNATIONAL BUSINESS The national home base of an organisation plays an important role in shaping the extent to which it is likely to achieve advantage on a global scale. This paper seeks to identify how national competition can help businesses compete globally, hence relating M. Porter’s ‘diamond of national advantage’ to international business. International Business comprises all commercial transactions (private and governmental, sales
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Pakistan’s currency? These questions must be addressed in a dispassionate manner. Economic theory has many explanations for relative currency movements. The simplest one is that if country X records the inflation rate at 10pc per annum while country Y’s is only 2pc, the bilateral exchange rate of country X should result in depreciation of 8pc vis-à-vis country Y. Hardly any country has economic ties with only one country. Therefore, a trade-weighted exchange rate is used where weights
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The corporate office decided that a team would be put together to review any results in the aforementioned areas and to offer recommendations for change. Your group will be reviewing these results. The following is information you need to make informed decisions. America Unemployment – 9.9% Inflation – 2.3% GDP (purchasing power parity) – $14.6 trillion Output per person (GDP per capita) – 2007: $46,800; 2008: $32,560 Fed funds rate – 0.25 Discount rate – 0.50 Population –
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867-975-20,55336,338-9,631.6 | Balance of Payment for Malaysia from 2012-2014 (in RM Million) (Taken from website of Department of Statistics Malaysia Official Portal) The balance of payments (BOP) is the method countries use to monitor all international monetary transactions at a specific period of time. Usually, the BOP is calculated every quarter and every calendar year. All trades conducted by both the private and public sectors are accounted for in the BOP in order to determine how much money
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ECO 305 WK 7 QUIZ 6 CHAPTER 9 To purchase this visit here: http://www.activitymode.com/product/eco-305-wk-7-quiz-6-chapter-9/ Contact us at: SUPPORT@ACTIVITYMODE.COM ECO 305 WK 7 QUIZ 6 CHAPTER 9 ECO 305 WK 7 Quiz 6 - Chapter 9 MULTIPLE CHOICE 1. "Risk spreading" is a motive most likely to be served when firms undergo: a. Horizontal integration b. Vertical integration c. Conglomerate integration d. None of the above 2. The source (home) location of most of the world's leading multinational
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A well known link exist between oil price external reserves and exchange rate for oil exporting countries that relies on over 90% of her annual revenue crude oil sales. The link is such that an oil dependent economy relies on a robust foreign reserves to pay for her import demands. During periods of high and sustained crude oil price, the domestic currency (Naira) tends to appreciate in value because of sustained inflow of FDI and foreign capital. When oil price is declining, the revenue
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School of Economics. He is a professor of international finance prior to taking up his present position he was a midland bank member in monetary economics. He had associated with Loughborough University (1982-1984) then got his position as Lecturer and afterward Senior Lecturer then join University of Aberdeen (1984-1989) then University of Dundee (1989-1992) and most recently Professor of International Finance at the University of Strathclyde (1992-2004). REPEC (Research Papers in Economics), the
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