Assignment 5 Practice Problems Example | Topics and Well Written Essays - 250 words

5 Practice Problems - Assignment ExampleDepending on the government it can be adverse or favourable.If the US dollar is strong against another currency, it leads to increased demand of imports as prices go d suffer. This inturn weakens export as international goods appear to be expensive outside the country. Importers prefer strong local anesthetic currency while exporters prefer weak local currency (Econedlink par 11)For an export business ground in the US the ideal situation would be if the dollar weakens, this makes it attractive for foreigners to buy goods from US, but if it appreciates it, makes foreign goods reckon expensive. To balance this fluctuation the company needs to cut the dollar price to match the prices in pounds (Econedlink par 11).4. Suppose that you are a U.S. producer of a commodity good competing with foreign producers. Your inputs of business are priced in dollars and you sell your output in dollars. If the U.S. currency depreciates against the currencies o f our trading partners, b. your competitive position is plausibly worsened.When the dollar appreciates, this makes foreign goods seem cheaper and this improves their position in the market, but when the dollar depreciates the price of foreign goods seem expensive and this may probably worsen the position of foreign business (Econedlink par 11).5. Suppose your slopped invests $100,000 in a project in Italy. At the time the exchange rate is $1.25 = 1.00. One division later the exchange rate is the same, but the Italian government has expropriated your firms assets paying only 80,000 in compensation. This is an typeface ofIt does not matter the exchange rate, what counts is the fact that the government has taken over a private own business. The government does this without the owners consent but there must be compensation (Meridian finance par 1).Upenn.edu Chapter 1 Globalization And The Multinational Firm Suggested Answers To End-Of-Chapter Questions. 2014,