Assignment 10: National and Global Finance (16.0 points) 1. Choose an example of a type of new company you could start, and then use this company idea to answer the questions below. You might choose a pet store, a restaurant, a tutoring business, or something else. This can be the same type of company you chose in assignment 8 or 9, or it can be different. a. Describe the type of business you chose. (1-2 sentences. 0.5 points) The type of business I would start would be for family or friends gatherings. This business would be place people come to eat and social, a nice, warm evening. b. Describe at least two ways in which the local, state, or federal government would have an impact on your business. (2-4 sentences. 1.0 points) …show more content…
companies to sell their products in other countries? Explain how this helps the U.S. (2-4 sentences. 2.0 points) The U.S. government encourages the U.S. companies to sell their products in other countries because other countries may offer better opportunities for growth. 10. Find the value of one U.S. dollar in a foreign currency. You might choose the Euro, the Japanese Yen, the Canadian dollar, or another currency. List the type of currency and the current value of the U.S. dollar in that country. (1.0 points) TIP: http://www.google.com/finance/converter is a good resource for foreign currency information. US 1 dollar = Jordanian 75cents 11. Describe at least three exchange rate factors that are likely to attract foreign investors to a country 's currency. Explain why these factors are attractive for foreign investors. (3-6 sentences. 3.0 points) Overview Before we look at these forces, we should sketch out how exchange rate movements affect a nation 's trading relationships with other nations. A higher currency makes a country 's exports more expensive and imports cheaper in foreign markets; a lower currency makes a country 's exports cheaper and its imports more expensive in foreign markets. A higher exchange rate can be expected to lower the country 's balance of trade, while a lower exchange rate would increase it. Determinants of Exchange Rates Numerous factors determine exchange rates, and all are related to the trading relationship
1. Choose an example of a type of new company you could start, and then use this company idea to answer the questions below. You might choose a pet store, a restaurant, a tutoring business, or something else. This can be the same type of company you chose in assignment 8 or 9, or it can be different.
What services do you offer? Will I have a formal written agreement or contract with you? What if I can 't afford to pay your fees or make contributions? In addition to helping me solve my immediate problem, will you help me develop a plan for avoiding problems in the future?
10. Find the value of one U.S. dollar in a foreign currency. You might choose the Euro, the Japanese Yen, the Canadian dollar, or another currency. List the type of currency and the current value of the U.S. dollar in that country. (1.0 points) TIP: http://www.google.com/finance/converter is a good resource for foreign currency information.
US marketing, while left unregulated can target those less educated in foreign countries to buy products they do not need. For example liquor company Diageo has been accused of lowballing the African liquor market and “driving smaller native companies out with cheap spirits and easy access” (Johns, Chelcee). With such cheap and easy access, they are accused of “crippling societies just getting on their feet” while encouraging excess demand going toward a foreign owned business that sells items that are not necessities (Johns, Chelcee). US company Coca Cola is also accused of selling water 10,000 times more expensive than tap water to developing countries, taking away vital disposable income (Daniels, John). US regulations need to be put into place in order to prevent up and coming countries from being taken
This activity is designed to encourage students to appreciate the process of generating business idea with limited funds. Anybody can come up with a good business idea regardless of their age, race, experience and others.
There are opportunities to outsourcing. The economy of the countries we go to will play a role in prices and products we are able to receive. It is typically cheaper to buy and manufacture products overseas because they have less government regulations and standards. There are lower pay wages and material cost and the laws from their countries don’t put as many restrictions on products like the US does.
Toyota Car Company, Korean Air, and Nissin Foods are all companies currently either selling a product or service in the U.S. Yes, the United States should encourage investment. The U.S. remains the world’s largest consumer market and is the world’s top destination for foreign direct investment. Hundreds of foreign firms have operations in the U.S. to take advantage of this huge market. This process of foreign companies investing in the U.S. and creating jobs is called “Insourcing (Maynard 2009)." By these oversees companies coming to the U.S. it creates more jobs for Americans and brings down the employment rate. It can also provide domestic jobs, increase in the standard of living by providing a wide assortment of goods and services.
An exchange rate is the price for which one currency is worth converted into another rate. The exchange rate is determined by the supply and demand conditions of relevant currencies in the market transaction of currency exchanges occur in the foreign exchange markets. For example, currently, the £1 is worth $1.67 which means that at this stage, the pound is stronger than the dollar. Businesses should ensure that they frequently check the exchange rates to see if any changes to their prices need to be made or if the exchange rate benefits them. If Iron Bru were to export a large amount of products to a country such as Germany or Poland, there will
In general, companies invest in foreign markets to increase profit and sales, or they desire to protect their profit and sales from competitors. General Motors is no different, and has heavily invested in foreign markets. No manufacturer can ignore the Chinese market.
However, the United States does have some industries which do not perform at the capacity of those in other countries. These inefficient industries could be helped to stand on their own legs if their foreign competition was to be restricted by tariffs. If the East Asian auto industry is flooding the market with cars that sell better than their American-made counterparts, the government can intervene in the name of domestic businesses and jobs by placing tariffs on them. On the flip side, the consumer has to pay more for imported Japanese and Korean cars. [3]
Consequences regarding the international businesses and the flow of trade and investment among the three countries are given below as benefits and drawbacks of holding fixed exchange rate system-
The main exchange rates exposures are: British pounds, Deutsch Mark, Japanese Yen and Belgian Francs.
Globalisation has enabled many companies to venture abroad in an attempt to grow their market presence while also boosting profitability, acquire cheaper raw materials, and gain access to low cost of labor.
Well known companies like Nike, Microsoft, Sony, Shell Group are just some of the big companies that went global and expanded their trading around the world, they are large businesses that operate internationally in many countries. Development of worldwide integration urges companies to reach out international markets and interact with foreign customers. Businesses focus on fulfilling the demand of the market by its products or services, besides their target is increasing profit, in order achieve these goals they favor to expand their work in a foreign market. Other reasons to internationalize their business may be to become
Like stated above, to find the ratio that is more beneficial between currencies, there are numerous factors to take notice of. Each factor plays a role in the trading relationship between countries. Although there is no order or weight to these factors, each part represents a piece of the formula in deriving the exchange rate.