National and Global Finance Essay

1. Choose an example of a grammatical case of new company you could number 1, and hence use this company idea to answer the questions below. You might postulate 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 ii ship canal in which the local, state, or federal government would have an impact on your business. (2-4 sentences. 1.0 points) Whether business owners know it or not, but the government create laws and regulation to nurse the business. Two ways the government would have an impact on my business is by setting a price ceiling and price floor. These both determines whether or not my items it too high or low for its good.2. Describe at least one advantage and one disadvantage of price ceilings and price floors. Do you think price ceilings and floors argon more helpful or more harmful to consumers and the economy? Explain. (2-4 sentences. 1.0 points) Price controls are the government intervention in abandon markets. In the case of agriculture without price floors mass starvation could occur as there is often a 2 to 10 year repeal around on agricultural investment. Price ceilings on certain food products may also ease starvation. Remember that perfect free markets have neer existed except in theory.3. Describe at least two ostracise outcomes of having too little money and credit in the economy. (2-4 sentences. 2.0 points) It would cause scarcity or currency, prima(p) to rapid deflation, and also, overproduction of goods means major markets would plummet in value. Overbalancing demand, leading to major losses for the producers.4. Describe at least two negative outcomes of having too much mone y and credit in the economy. (2-4 sentences. 2.0 points) It would cause a sacracity of currency, leading to rapid deflation. Overproduction of goods means major markets would plummet in value, outbalancing demand, leading to major losses for the producers.5. Which Fed tool do you think is most important, andwhy? (2-4 sentences. 1.0 points) Change the Federal Funds Rate via Open Market transactions (buying and shell outing govt bonds on the open market). By far the most commonly used tool. Whenever you read about the Fed changing the interest set out they are referring to open market transactions & the Federal Funds Rate. Since they cannot set the calculate directly, but do it indirectly by buying and selling bonds on the open market, they usually refer to the desired interest tramp as the target rate.6. Choose one of the following government agencies or laws FTC, EPA, FDA, CPSC, OSHA, FLSA, EEOC, ADA, SEC, or approbatory Action. Search online to learn more about the agency or law, and then describe three specific things the law or agency accomplishes. Make accredited the information comes from a trustworthy website. Include a link to the website in your answer. (3-6 sentences. 1.5 points) The EPA or Environmental Protection Agency seeks to protect ordinary citizens from the devastation and close that may occur when people/companies are not held accountable for their actions environmentally. In most cases this agency has been very effective and is used as a mock up all over the world to protect streams, rivers, air and people.7. Describe at least two products that are commonly imported into the United States. (1-2 sentences. 0.5 points) Coffee (Brazil and Columbia) and cotton T-shirts (Mexico, Honduras among a lot of others)8. Describe at least two products that are commonly exported from the United States to other countries. (1-2 sentences. 0.5 points) Two of the largest American exports are Oil reference and Machines, engines, pumps, both to China for a combined total of 27.2 billion USD.9. Why does the U.S. government encourage U.S. 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 75cents11. Describe at least three give-and-take rate factors that are likely to attractforeign investors to a countrys currency. Explain why these factors are attractive for foreign investors. (3-6 sentences. 3.0 points) OverviewBefore we look at these forces, we should field of study out how exchange rate movements affect a nations trading relationships with other nations. A higher currency makes a countrys exports more expensive and imports cheaper in foreign markets a lower currency makes a countrys exports cheaper and its imports more expensive in foreign markets. A higher exchange rate can be expected to lower the countrys balance of trade, while a lower exchange rate would increase it. Determinants of Exchange RatesNumerous factors determine exchange order, and all are related to the trading relationship between two countries. Remember, exchange pass judgment are relative, and are expressed as a comparison of the currencies of two countries. The following are some of the principal determinants of the exchange rate between two countries. Note that these factors are in no particular order like many aspects of economics, the relative importance of these factors is subject to much debate. ConclusionThe exchange rate of the currency in which a portfolio holds the bulk of its investments determines that portfolios real return. A declining exchange rate obviously decreases the purchasing power of income and capital gains derived from any returns. Moreover, the exchange rate influences other income factors such as interest rates, inflation and even capital gains from domestic securities. While exchange rates are determined by numerous complex factors that often leave even the most experienced economists flummoxed, investors should still have some understanding of how currency values and exchange rates play an important role in the rate of return on their investments.