Questions from Financial Management

Q: a. Explain why a stronger dollar could enlarge the U.

a. Explain why a stronger dollar could enlarge the U.S. balance-of-trade deficit. Explain why a weaker dollar could affect the U.S. balance-of-trade deficit. b. It is sometimes suggested that a float...

Q: The governments of many countries enact policies that can have a major

The governments of many countries enact policies that can have a major impact on international trade flows. a. Explain how governments might give their local firms a competitive advantage in the inter...

Q: There is an ongoing debate between the United States and China regarding

There is an ongoing debate between the United States and China regarding whether the Chinese yuan’s value should be revalued upward. The cost of labor in China is substantially lower than that in the...

Q: a. How would a relatively high domestic inflation rate affect the

a. How would a relatively high domestic inflation rate affect the home country’s current account, other things being equal? b. Is a negative current account harmful to a country? Discuss.

Q: How can government restrictions affect international payments among countries?

How can government restrictions affect international payments among countries?

Q: a. What are some of the major objectives of the IMF

a. What are some of the major objectives of the IMF? b. How is the IMF involved in international trade?

Q: Would the U.S. balance-of-trade deficit

Would the U.S. balance-of-trade deficit be larger or smaller if the dollar depreciates against all currencies, versus depreciating against some currencies but appreciating against others? Explain.

Q: A relatively small U.S. balance-of-trade

A relatively small U.S. balance-of-trade deficit is commonly attributed to a strong demand for U.S. exports. What do you think is the underlying reason for the strong demand for U.S. exports?

Q: Why do you think international trade volume has increased over time?

Why do you think international trade volume has increased over time? In general, how are inefficient firms affected by the reduction in trade restrictions among countries and the continuous increase i...

Q: Assume that during this semester, the euro appreciated against the dollar

Assume that during this semester, the euro appreciated against the dollar. Did the direct exchange rate of the euro increase or decrease? Did the indirect exchange rate of the euro increase or decreas...