Interest Rates and Monetary Systems: A Historical Perspective
Interest Rates and Their Determinants
Interest rates are the “price of debt or credit” and are determined by supply and demand.
An increased supply of commodity money leads to more lenders. The supply of credit increases, and people have more money saved. Consequently, an increase in the amount of money results in a reduction of interest rates.
This leads to:
- Investment
- Consumption
- Economic growth
The relationship can be summarized as:
+ Commodity Money + Saved Money + Supply Credit → Low Interest Rates
Read MoreInternationalization: Motives and Foreign Operation Modes
Motives for Internationalization
Understanding why firms internationalize is crucial, as it influences their strategies for market entry, country selection, and operations. The main motives are:
- Market-Seeking Motives:
- Goal: Access foreign markets with strong sales potential.
- Key Factors:
- Market size and growth.
- Attractive customer segments.
- Bridgehead strategies to enter adjacent markets (e.g., Hong Kong for China, Austria for Eastern Europe).
- Follow-the-Customer Strategy:
- Manufacturers or service providers
Understanding Free Trade: True/False, Definitions, and FAQs
Free Trade: True or False
- Free trade can cause workers in a country to lose jobs: True
- NAFTA is a free trade agreement: True
- Free trade doesn’t need rules: False
- Free trade goal is to create a common trade policy: True
- Domestic producers will have increased competition with free trade: True
- Free trade areas allow countries to focus on their competitive advantages: True
- U.S.A has 20 free trade areas: False
- U.S.A. has free trade agreement with 20 countries: True
- Colombia is a partner country of the U.S.A:
Strategic Market Entry: Planning and Execution
Chapter 9: Strategic Market Entry
Planning
Market Entry → Yes or No → Choice of Market → Market X, Y, or Z → Choice of Entry Type → Entry Strategy
Market Attractiveness
Market attractiveness is related to the following factors:
- Market size
- Market growth rate
- Number of competitors
- Product differentiation
- Cost structure
- Current prices
- Current returns
- Barriers to entry
Barriers to Entry
Barriers to entry allow incumbents to operate profitably while making entry relatively unattractive. These barriers include:
Read MoreUnderstanding Grief in ‘Ransom’ and ‘The Queen’
Despite the distinctive contexts and settings of David Malouf’s Ransom and Stephen Frears’ The Queen, the notion of grief and its exploration is heavily delved into within both texts. As Malouf presents us with the image of Hector’s lifeless body being dragged through the sediment, we are reminded of how difficult it can be to overcome grief. Indeed, due to past habits, overcoming one’s grief is heavily restricted and difficult. In addition, both texts indulge in how grief can be overcome by connecting
Read MoreInternational Trade: Comparative Advantage & Economic Impact
International Trade Theories: True or False
Increased foreign competition tends to increase profits of domestic import-competing companies. False
The development of diesel engines and gas turbines helped reduce transportation costs and thus increase international trade among nations. True
According to Adam Smith, mutually beneficial trade requires each nation to be the least-cost producer of at least one good that it can export to its trading partner. True
Answer questions 205 and 206 using the information