5. Explain why the infant-industry argument is valid.

6. Explain one reason why the U.S. dollar has higher value than the Indian Ruppies in the international exchange rate marketplace.

7. write out one major difference between a country's balance of trade(BOT) and Balance of Payment (bop).

8. Explain the reason why loans to a country are entered on the Credit Side of that country's Balance of Payment account.
9. Why does the supply of a country's currency increase if/when the country's level of imports increase.explain.

10. Analyze how the exchange rate of the u.s. dollar would be impacted by a fall in U.S. domestic interest rates.

You are an employee of an U.S. firm that produces personal computers in Thailand and then exports them to the U.S. and other countries for sale. The personal computers were originally produced in Thailand to take advantage of relatively low labor costs and a skilled workforce. Other possible locations considered at that time were Malaysia and Hong Kong. The US government decides to impose punitive 100% ad valorem tariffs on imports of computers from Thailand to punish the country for administrative trade barriers that restrict U.S. exports to Thailand. How do you think your firm should respond? What does this tell you about the use of targeted trade barriers?

A study compared the relative frequency of mental health problems of various types among U.S. Army members before deployment to Iraq, U.S. Army members after serving in Iraq, U.S. Army members after serving in Afghanistan, and U.S. Marines after serving in Iraq. The study stated, "Potential differences in demographic factors among the four study groups were controlled for in our analysis with the use of logistic regression." For this study, identify the response variable, the primary explanatory variable, and likely control variables.

Response: Mental health problems; explanatory: deployment (yes/no); control: branch of military, country of service

Response: Deployment (yes/no); explanatory: before/after deployment; control: branch of military, country of service, mental health

Response: Four study groups; explanatory: mental health; control: branch of military, country of service

Response: Mental health problems (yes/no); explanatory: before/after deployment; control: branch of military, country of service

Measuring Economic Exposure. Assume you live in the U.S. Using the following cost and revenue information shown for DeKalb, Inc.,

a) determine how the costs, revenue, and net cash flow would be affected by three possible exchange rate scenarios for the New Zealand dollar (NZ$):

            1) NZ$ = $0.55,

            2) NZ$ = $0.60, and

            3) NZ$ = $0.65.

            b) What is your conclusion?

            15 Marks    

Note: PCF_t is the percentage change in inflation-adjusted cash flows measured in the firm's home currency (U.S. dollars) over period t, and e_t is the percentage change in the exchange rate of the foreign currency over period t.   

Forecasted Net Cash Flows: DeKalb Inc.

(in millions of U.S. dollars and New Zealand dollars)

                                                                                                                               New Zealand

                                                                                            U.S. Business               Business

      Sales                                                                                   $800                         NZ$800

      Cost of Materials                                                               500                               100

      Operating Expenses                                                           300                                     0

      Interest Expense                                                                100                                     0

      Cash Flow                                                                       ($100)                         NZ$700

Conventional thinking in product development has been that innovation starts in advanced
developed countries like the United States and Japan. Products marketed in
countries where the average income is much lower often are older models of U.S. products
or used but still serviceable equipment. Several U.S. multinational companies have
established R&D labs in India and China. Originally this was to take advantage of the
large number of well-educated engineers who could be employed at salaries much lower
than the going U.S. rate, but soon it was found that these engineers were adept at developing
products for sale to the mass markets in these local countries. Typically these are
products with somewhat reduced functionality, but they still are useful quality products.
Now these U.S. companies are beginning to market these products in the United States
as a low-cost product line that is attractive to a new low-end market segment.
Search the business literature for examples of this new approach to trickle-up product
innovation. Discuss advantages of this new approach to product development and discuss
possible risks.

​In a sample of 800 U.S.​ adults, 199 think that most celebrities are good role models. Two Two U.S. adults are selected at random from the population of all U.S. adults without replacement. Assuming the sample is representative of all U.S.​ adults, complete parts​ (a) through​ (c).

(a) Find the probability that both adults think most celebrities are good role models. The probability that both adults think most celebrities are good role models is ________?(Round to three decimal places as​ needed.)

​(b) Find the probability that neither adult thinks most celebrities are good role models. The probability that neither adult thinks most celebrities are good role models is _______?(Round to three decimal places as​ needed.) ​

(c) Find the probability that at least one of the two adults thinks most celebrities are good role models. The probability that at least one of the two adults thinks most celebrities are good role models ______? (Round to three decimal places as​ needed.)

In a sample of 1100  U.S.​ adults, 203 think that most celebrities are good role models. Two Two U.S. adults are selected at random from the population of all U.S. adults without replacement. Assuming the sample is representative of all U.S.​ adults, complete parts​ (a) through​ (c).

(a) Find the probability that both adults think most celebrities are good role models. The probability that both adults think most celebrities are good role models is ________?(Round to three decimal places as​ needed.)

​(b) Find the probability that neither adult thinks most celebrities are good role models. The probability that neither adult thinks most celebrities are good role models is _______?(Round to three decimal places as​ needed.) ​

(c) Find the probability that at least one of the two adults thinks most celebrities are good role models. The probability that at least one of the two adults thinks most celebrities are good role models ______? (Round to three decimal places as​ needed.)

A poll of 1769 U.S. adults found that 84% regularly used Facebook as a news source.

Find the margin of error and confidence interval for the percentage of U.S. adults who regularly use Facebook as a news source, at the 90% level of confidence. Round all answers to 2 decimal places.

Margin of Error (as a percentage):
Confidence Interval: % to %

Find the margin of error and confidence interval for the percentage of U.S. adults who regularly use Facebook as a news source, at the 95% level of confidence. Round all answers to 2 decimal places.

Margin of Error (as a percentage):
Confidence Interval: % to %

Find the margin of error and confidence interval for the percentage of U.S. adults who regularly use Facebook as a news source, at the 99% level of confidence. Round all answers to 2 decimal places.

Margin of Error (as a percentage):
Confidence Interval: % to %

The more error we allow, the less precise our estimate. Therefore, as the confidence level increases, the precision of our estimate

• increases
• decreases
• stays roughly the same

Paton Corporation, a U.S. corporation, owns 100 percent of the stock of Tappan Ltd, a British corporation, and 100 percent of the stock of Monroe N.V., a Dutch corporation. Monroe has post-1986 undistributed earnings of €726 and post-1986 foreign income taxes of $484. Tappan has post-1986 undistributed earnings of £968 and post-1986 foreign income taxes of $242. During the current year, Tappan paid Paton a dividend of £520, and Monroe paid Paton a dividend of €520. The dividends were exempt from withholding tax under the U.S.-UK and U.S.-Netherlands income tax treaties. The exchange rates are as follows: €1:$1.50 and £1:$2.00. Assume the U.S. tax rate is 35 percent. (Enter your answers in dollars, with your final answers rounded to the nearest whole dollar amount. Do not round intermediate calculations.)

a. Compute Paton’s deemed paid credit on the dividends it received from Tappan and Monroe.

Monroe Tappen

deemed paid credit