Assume the following
information for the United States and Mexico. The United States can
produce a maximum of 600 bushels of barley or a maximum of 600
bushels of corn. Mexico can produce a maximum of 200 bushels of
barley or 400 bushels of corn. Which country has a comparative
advantage in the production of barley? Which country has a
comparative advantage in the production of Corn? Show your work for
the calculation of opportunity cost. (4 Points)
Distinguish between the different forms of doing business
outside the United States and list their advantages and
disadvantage
Write two to three large paragraphs
Examples of cultural differences
that we (United States people) should be aware of before doing
business with China. Examples might include nonverbal differences,
differences in gift-giving in business practices, etc.
Interest rates in Mexico are 3% and in the United States they
are currently 0.025%. The MXN/USD spot rate is 0.076. You are
offered a 12-month forward rate of .08.
A) show whether the forward contract is overvalued or
undervalued.
B) which currency should you borrow and why ?
C) what is the percentage return from engaging in Covered
Interest Arbitrage ?
What were the main reasons for the United States, Canada, and
Mexico to sign on to the original NAFTA? After more than 20 years,
has NAFTA delivered the benefits expected? How might NAFTA be
improved to the benefit of all three members’ countries?