Question

understand uniqueness of international Finace and market imperfection

Answer 1

Uniqueness of international Finance and market imperfection:

International Finance(IF) - It is also called as macroeconomics which deals with performance and behavior of an particular country. Here, the IF do the monetary interaction in between two or more countries. which leads to exchange their currencies,policies, import & export businesses and FDI. Instead of considering the individual markets it concerns market as a whole. So, for this both nations of their businesses will get the benefits. Across the globe there is an international finance division at the U.S. Federal Reserve that analyzes policies relevant to U.S. capital flow, external trade and development of markets.

The growing population across the globe tells that how the rate of globalization occurs to this the uniqueness of IF is clearly showing that macro economical factors are getting impact which includes inflation rate comparison, exchange rates, investing policies, ascertain on economic status and other factors while making decisions on international investment.

Market Imperfection(MI) - It is an ambiguity situation where individual buyers and sellers can manipulate the product, price with that there is no specific price about the product will indicated. The market gets influences with them and there are high chances to opt out or get into the market. There are 4 characteristics that will effect the market that are monopoly, monopolistic competition, oligopoly, oligopsony.

This market imperfection shows the result on the customer buying behavior according to their needs and wants, with this the economical behavior on an indicated market understands the requirements. Imperfect competition is the real world competition. now a days some of industries,sellers following this to earn surplus profits. In this market scenario, the seller enjoys more on influencing the price in order to earn more profits.