1. Most companies in the clothing and shoe industries favor outsourcing production to countries where labor is abundant, particularly to Southeast Asia and the Indian subcontinent, but those firms do not integrate with their suppliers there. Technology and capital intensive firms, on the other hand, tend to integrate with their suppliers. How can this be explained? Answer : At the beginning of the 90s, the two most fundamental determinants of competitiveness in footwear production were considered
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Strength Strength of our Economy 1. Growing economy, scope for fresh and new projects, need for infrastructural facilities. 2. Availability of resources. 3. Abundance of Manpower. 4. Urge for development. 5. Adaptability Of manpower vis-à-vis technologies. Weakness Weakness of our Economy 1. Poor & very inadequate technical bases. 2.
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Barbadian should be able to easily purchase goods in a store in Port of Spain with his Barbadian dollars and receive his change in Trinidad and Tobago dollars. However, this does not always happen because of the existence of two different exchange systems in CARICOM – Fixed and Floating. Currency convertibility implies the absence of exchange controls or restrictions on foreign exchange transactions. The ease with which a country's currency can be converted into gold or another currency. Convertibility
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Course Project 2 Ch16 #6 Throughout history we have witnessed periods of hyperinflation have an effect on countries in dramatic ways. This duration of hyperinflation can take many years for a country to overcome through deflation to balance the value of their dollar. Hyperinflation is created by an extreme rapid inflation causing price increases to be so out of control that the concept of inflation is meaningless. For example, a sandwich that once cost $2 would now cost $3000 showing there
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Types of foreign exchange exposure Transaction exposure: : value of outstanding financial obligations incurred prior to change in exchange rates but not due to be settled until after the exchange rates change(deals with changes in cash flows that result from existing contractual obligation) Ex: when a firm buys a forward exchange rate contract it deliberately creates a transaction exposure. 4 option available to manage the exposure 1. Remain unhedged(might gain or lose) 2. Hedge in the
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steady economic reforms. These reforms were necessary as Brazil suffered years of hyperinflation as high as 1000% and deficit spending. The government decided to pursue economic policies that changed the Brazilian economy into a dynamic market based system. Some of the key policy changes made were the privatization, of state owned enterprises, deregulation that allowed for greater domestic and foreign competition, perusing regional and multinational free trade agreements and the removal of red tape
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FIN340 304 Tutorial week 3 Questions 1. How can a central bank use direct intervention to change the value of a currency? Explain why a central bank may desire to smooth exchange rate movements of its currency.. 2. Should the governments of Asian countries allow their currencies to float freely? What would be the advantages of letting their currencies float freely? What would be the disadvantages? 3. What is the impact of a weak home currency on the home economy, other things
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Trade and Finance Speech ECO 372 Trade and Finance Speech Welcome, as the Speaker of the House it is my duty and honor to inform you of the current state of our country’s macro-economy. The proceeding will cover when there is a surplus of imports brought into the U.S. and its impact is has on the U.S. businesses and consumers involved. How government choices regarding tariffs and quotas affect international relations and trade. Foreign exchange rates, and how are they determined. Finally
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or another nations currency is called the monetary policy. The goal of this is to limit the amount of money circulating in the economy by controlling the money supply and the interest rate. What did the central banks do to stabilize the financial systems in 2007–2009? As the financial crisis unfolded throughout the 2007-2009 time period, the Fed increased the amount of loans it extended to depository institutions. In 2009, the Fed reported earnings of $52.1 billion, of which $2.9 billion were gains
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1991 Indian economic crisis By 1985, India had started having balance of payments problems. By the end of 1990, it was in a serious economic crisis. The government was close to default, its central bank had refused new credit and foreign exchange reserves had been reduced to such a point that India could barely finance three weeks’ worth of imports which lead the Indian government to airlift national gold reserves as a pledge to the International Monetary Fund (IMF) in exchange for a loan to cover
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