1)Which of the following items would be listed on the US current account?
a) A house in the United States sold to a Canadian citizen;
b) a pair of shoes made in Spain, but sold in the United States;
c) tuition payments made by foreign citizens attending a university in the United States
d) a car made in Michigan (United States), but sold in Canada;
e) the value of Canadian government debt owned by US banks

2)Go to the website of the IMF: www.imf.org . What are some of the projects the IMF is currently working on?

3)If we expect our currency to appreciate with respect to the currency of our northern neighbour and the interest rates are the same in both nations, in which nation does it make sense for us to invest? Show your work.

4)What does a nation give up by having a fixed exchange rate? What do they get?

Using the same quantity of resources, the United States and Canada can both produce lumberjack shirts and lumberjack boots, as shown in the following table.

A. Calculate the opportunity cost of producing a lumberjack shirt in the United States and in Canada.

B. Use the information in the table above to explain the difference between absolute and comparative advantage. In your answer, you must correctly define absolute and comparative advantage.

C. Explain whether the United States and Canada will benefit from trade. If the countries benefit from trade, explain which country will produce lumberjack shirts and which will produce lumberjack boots.

D. If Canada has a technological innovation in shoe production that allows the country to produce 15,000 more boots at each production level described above, will Canada benefit from trade with the United States? Please explain your answer.

Assume that the United States and Cambodia both have similar demand functions and similar taste preferences. The United States however is capital abundant while Cambodia is labour abundant. Assume that the two countries produce only two goods: capital-intensive cars and labour-intensive shoes. Currently, the two countries are in the process of negotiating a bilateral free trade agreement (FTA). Part (a) Use the concepts of supply and demand to illustrate the situation of bilateral trade between the United States and Cambodia before the creation of their FTA. Note that before the creation of the FTA, both the United States and Cambodia use import tariffs. How can the Heckscher-Ohlin model be used to explain the positions taken by capital owners and labour owners in each country vis-à-vis a USA-Cambodia FTA. Students are recommended to use graphs in their answer. [7 marks] Part (b) If an FTA between the United States and Cambodia is created, according to the Heckscher-Ohlin model what will happen to the total welfare of each country? Specifically, use the concept of Production Possibility Frontier (PPF) to graphically show the changes in the welfare of both countries following the creation of their FTA. [5 marks]

How might you compare and contrast the organization of the healthcare systems of the United States, Germany, and the United Kingdom?

Innocent until proven guilty? In Japanese criminal trials, about 95% of the defendants are found guilty. In the United States, about 60% of the defendants are found guilty in criminal trials. (Source: The Book of Risks, by Larry Laudan, John Wiley and Sons) Suppose you are a news reporter following five criminal trials. (For each answer, enter a number.)

(a)

If the trials were in Japan, what is the probability that all the defendants would be found guilty?

What is this probability if the trials were in the United States?

(b)

Of the five trials, what is the expected number of guilty verdicts in Japan?

What is the expected number in the United Sates?

What is the standard deviation in Japan?

What is the standard deviation in the United States?

As the world’s biggest maker of mobile phones, Nokia, the Finnish company, is a “powerhouse in Europe, Asia, and Latin America, with market shares regularly topping 30 percent”. However, in the United States, Nokia phones have lost popularity over the last few years. In March 2002, Nokia led the American market with 35 percent market share. By June of 2009, its share was only 7 percent. What happened and more importantly, what is Nokia doing about it?

As mobile phone usage skyrocketed, Nokia was the most popular choice. It was the “cool” phone—the one that everyone, from business executive to high school student to stay-at-home-mom wanted. In 2005, Nokia had just launched the N series, an innovative new line with a Web browser, video, music, and pictures in a single phone. That device moved Nokia a generation ahead in the race to build the first real smart phone. The “forecast for Nokia was as sunny and clear as an endless Finnish summer day.” Then came Apple and its iPhone with its clever touch screen and sophisticated software and services. With rave reviews and a reputation for being cool, customers flocked to buy one. However, Nokia executives dismissed the iPhone, saying they were “unimpressed by its engineering.”

Now, three years after Apple introduced the iPhone in 2007, Nokia still has no alternative. It did not anticipate changes in American consumer tastes, like flip phones or touch screens. Another major strategic blunder 246 PART THREE | PLANNING was that its models were based on a European communications standard called GSM when roughly half the United States market used the CDMA (code division multiple access) format. One former Nokia executive said, “Nokia, at the height of its success, decided not to adapt its phones for the U.S. market. That was a mistake and they’re still trying to recover from this.” An executive at a North American network operator said, “The attitude at Nokia was basically: Here is a phone. Do you want it? Nokia wouldn’t play by the rules here, and they have paid a price.” That arrogant attitude and the global economic slowdown have continued to hurt the company’s sales and earnings.

Meanwhile, Nokia set up liaison offices in Atlanta, Dallas, Seattle, and Parsippany, New Jersey, cities where the top American operators have big business units. And it has recently revamped its U.S. operations to collaborate more closely with those major operators. For example, AT&T has begun billing its customers who use Nokia services, keeping those customers from receiving a second bill from Nokia. Best Buy began carrying a Nokia netbook, which is a model for its new collaborative strategy. Nokia also forged a deal with Qualcomm, the largest maker of mobile phone chips for CDMA devices in the United States. It also struck a deal with Microsoft to design Windows Office Mobile software applications for phones that use Nokia’s Symbian operating system. Despite these efforts, however, some industry executives remain unimpressed. One analyst said, “They claim they get it and understand the U.S. market. But the execution still is not there.” Mark Louison, president of Nokia’s North American unit, who has a seat on Nokia’s global management board, said, “In the past, we had a one-size-fits-all mentality that worked well on a global basis but did not help us in this market. That has changed now.” The company recognized that its former strategy had not worked in North America and began trying to lay the groundwork for long-term success. Louison says, “Everything you see us doing is to build the broad set of capabilities to take us broader and deeper into the U.S. market.”

1. Where on the BCG Matrix would you place iPhone and Nokia brands? Where would you place any newly developed products of Iphone on BCG Matrix? Explain. (15)

2. What type of control—feedforward, concurrent, or feedback—do you think would be most important in this situation? Explain your choice (10)

3. What immediate corrective action have been used in this situation? How about basic corrective action? (10)

4. What strategies is Nokia using to revitalize its North American business? (10)

[30] The exchange rate on June 19, 2020, 1 USD against SGD was 1.394. Short term interest rate, in each Singapore dollar and United States dollar are 2.5% and 0.25% respectively. Suppose one year forward rates of Singapore dollar against 1 US Dollar is 1.45.

You are required:

[20] Suppose you want to borrow USD 1,000, could you make a profit or not from an arbitrage in one year later, and how much money you get it?

[10] Based on the information above, is it good or not for economy of Singapore? Give some reasons.

NO PLAGARISM

• Introduction: Describe economic indicators and briefly describe the United States economy. (can talk about covid-19 and at least one paragraph)

• Conclusion: Summarize the overall state of the United States economy. (can talk about covid-19 and at least one paragraph)

If the nations of the world were to suddenly cut off all trade with one another, what products might you no longer be able to obtain in United States? How would this affect businesses and the economy? Choose United States and identify the products it would need to do without.