The country of Borduria has vibrant automobile and white goods industries. Consequently, it is a large importer of steel. The country is currently showing inflation at 8% and unemployment at 5%. The current tariff (tax) on steel imports is 30% and the government of Borduria decides to lower the tariff on steel imports to 10%. You are the Commerce Minister of Borduria. Write a letter to the Prime Minister (PM) of Borduria explaining that you have decided to lower the import tariffs on steel in an effort to control inflationary tendencies. Start your explanation to the PM with a Phillips curve showing the initial position and then using the short-run AD/AS framework, show what might happen and why as a result of this policy. Explain all steps (no economics shorthand) and then show what the Phillips curve might look like after the reduction in the tariff. Show both starting and ending positions of the PC in the same diagram. The final positions/values of the unemployment and inflation rates can be chosen by you but make sure they are reasonable and make sense (PLEASE DRAW THE DIAGRAM)

Suppose that Kittle Co. is a U.S. based MNC that is considering setting up a subsidiary in Singapore. Kittle would like this subsidiary to produce and sell guitars locally in Singapore, and needs assistance with capital budgeting. The duration of this project is four years, with an initial investment of S$20,000,000 (Singapore dollars). Kittle Co. managers provide you key information regarding the project. 1. The government in Singapore will tax any remitted earnings at a rate of 10.00%. 2. The subsidiary will remit all of it’s after-tax earnings back to the parent. 3. The forecasted exchange rate of the Singapore dollar over the four-year period is $0.50. 4. The salvage value is S$12,000,000, which will be paid by the Singapore government in exchange for ownership of the subsidiary after four years. 5. The required rate of return is 15.00%. Furthermore, no funds can be remitted from the subsidiary to the parent until the subsidiary is sold for the salvage value at the…

Suppose that Kittle Co. is a U.S. based MNC that is considering setting up a subsidiary in Singapore. Kittle would like this subsidiary to produce and sell guitars locally in Singapore, and needs assistance with capital budgeting. The duration of this project is four years, with an initial investment of S$20,000,000 (Singapore dollars). Kittle Co. managers provide you key information regarding the project. 1. The government in Singapore will tax any remitted earnings at a rate of 10.00%. 2. The subsidiary will remit all of it’s after-tax earnings back to the parent. 3. The forecasted exchange rate of the Singapore dollar over the four-year period is $0.50. 4. The salvage value is S$12,000,000, which will be paid by the Singapore government in exchange for ownership of the subsidiary after four years. 5. The required rate of return is 15.00%.   Furthermore, no funds can be remitted from the subsidiary to the parent until the subsidiary is sold for the salvage value at…

General Motors exports cars to Spain but the strong dollar against the euro hurts sales of GM cars in Spain. In the Spanish market, GM faces competition from the Italian and French car makers, such as Fiat and Renault, whose operating currencies are the euro. What kind of measures would you recommend so that GM can maintain its market share in Spain?

Consider the information about the economy of Pakistan. Note that the currency of Pakistan is the rupee. The government purchases: 3.00 trillions of rupees. Individuals consume: 11.30 trillions of rupees. Individuals save: 5.14 trillions of rupees. Businesses invest: 1.30 trillions of rupees. Foreigners spend: 0.69 trillions of rupees to purchase Pakistani firms. Pakistan imports: 1.92 trillions of rupees. Pakistan exports: 1.31 trillions of rupees. Calculate Pakistan's GDP. Assume that the values are all current and no conversions need to be made. Give your answer in terms of trillions of rupees, and round to two decimals.

Suppose that Retrojo Inc. is a U.S. based MNC that will need to purchase F$2.00 million (Fijian dollars, F$) worth of imports from Fiji in 90 days. Currently, the spot rate for the Fijian dollar is $0.80 per F$. Suppose that Retrojo negotiates a forward contract with a bank, which commits it to purchasing Fijian dollars at F $2,000,000.00 at $0.80 per Fijian dollar in 90 days. Thus, Retrojo knows with certainty that it will need F$2,000,000.00×$0.80 per Fijian dollars =$1,600,000.00 for this exchange. Assume the Fijian dollar depreciates over this time period to $0.67 per Fijian dollar. If this were the case the outside of the contract only (U.S. dollars) would be needed to exchange for the required F$2,000,000.00.

Suppose that Retrojo Inc. is a U.S. based MNC that will need to purchase F$1.10 million (Fijian dollars, F$) worth of imports from Fiji in 90 days. Currently, the spot rate for the Fijian dollar is $0.53 per F$. Suppose that Retrojo negotiates a forward contract with a bank, which commits it to purchasing Fijian dollars at F$1,100,000.00 at $0.53 per Fijian dollar in 90 days. Thus, Retrojo knows with certainty that it will need F$1,100,000.00 × $0.53 per Fijian dollars = $583,000.00 for this exchange. Assume the Fijian dollar depreciates over this time period to $0.42 per Fijian dollar. If this were the case the, outside of the contract with the bank, only $ (U.S. dollars) would be needed to exchange for the required F$1,100,000.00.

LUSAKA (Reuters) - Zambia should keep mineral royalties capped at 7.5% in the 2020 budget to safeguard the health of the mining sector and promote additional investment, the Chamber of Mines said on Tuesday. The mining body said in proposals submitted to the finance ministry that the 2019 mining tax regime had raised the tax burden on mines to unsustainable and uncompetitive levels. Africa's No.2 copper producer increased its sliding scale for royalties of 4 to 6% by 1.5 percentage points and introduced a new 10% tax when the price of copper exceeds $7,500 per tonne.   The scale is adjusted so that royalties are paid at higher levels as commodity prices climb and are reduced as prices fall. "If the 1.5% increment on each band of the sliding scale is to be maintained, the maximum rate should be capped at 7.5%, for an LME copper price equalling or exceeding US$7,500/tonne," the Chamber of Mines said. The mineral royalty tax should also be tax-deductible for mining firms as making it…

Rogue River Exporters USA has $100,000 of before-tax foreign income. The host country has a corporate income tax rate of 25% and the U.S. has a corporate income tax rate of 35%. If the U.S. has a bilateral trade agreement with the host country that calls for the total tax paid to be equal to the maximum amount that could be paid in the highest taxing country, what is the total amount of income taxes Rogue River Exporters will pay to the host country, and how much will they pay in U.S income taxes on the foreign earned income? A) $25,000; $10,000 B) $25,000; $26,250 C) $35,000; $0 D) None of the above

Hull Importing Company is a U.S.-based firm that imports small gift items and sells them to retail gift shops across the United States. About half of the value of Hull’s purchases comes from the United Kingdom, while the remaining purchases are from Mexico. The imported goods are denominated in the currency of the country where they are produced. Hull normally does not hedge its purchases. In previous years, the Mexican peso and pound fluctuated substantially against the dollar (although not by the same degree). Hull’s expenses are directly tied to these currency values because all of its products are imported. It has been successful because the imported gift items are somewhat unique and are attractive to U.S. consumers. However, Hull has been unable to pass on higher costs (due to a weaker dollar) to its consumers, because consumers would then switch to different gift items sold at other stores.