international flow of fund
Chapter 2
International Flow of Funds
Lecture Outline
Balance of Payments
Current Account
Capital and Financial Accounts
International Trade Flows
Distribution of U.S. Exports and Imports
U.S. Balance of Trade Trend
International Trade Issues
Events That Increase International Trade
Trade Friction
Factors Affecting International Trade Flows
Impact of Inflation
Impact of National Income
Impact of Government Policies
Impact of Exchange Rates
Interaction of Factors
Correcting a Balance of Trade Deficit
Why a Weak Home Currency is not a Perfect Solution
International Capital Flows
Distribution of DFI by U.S. Firms
Distribution of DFI in the U.S.
Factors Affecting Direct Foreign Investment
Factors Affecting International Portfolio Investment
Impact of International Capital Flows
Agencies that Facilitate International Flows
How International Trade Affects an MNC’s Value
16
Chapter 2: International Flow of Funds
17
Chapter Theme
This chapter provides an overview of the international environment surrounding MNCs. The chapter is macro-oriented in that it discusses international payments on a country-by-country basis. This macro discussion is useful information for an MNC since the MNC can be affected by changes in a country’s current account and capital account positions.
Topics to Stimulate Class Discussion
1. Is a current account deficit something to worry about?
2. If a government wants to correct a current account deficit, why can’t it simply enforce restrictions on imports?
3. Why don’t exchange rates always adjust to correct current account deficits?
POINT/COUNTER-POINT:
Should Trade Restrictions be Used to Influence Human Rights Issues?
POINT: Yes. Some countries do not protect human rights in the same manner as the U.S. At times, the
U.S. should threaten to restrict U.S. imports from or investment in a country if it does not correct human rights violations. The U.S. should use its large
International Flow of Funds
Lecture Outline
Balance of Payments
Current Account
Capital and Financial Accounts
International Trade Flows
Distribution of U.S. Exports and Imports
U.S. Balance of Trade Trend
International Trade Issues
Events That Increase International Trade
Trade Friction
Factors Affecting International Trade Flows
Impact of Inflation
Impact of National Income
Impact of Government Policies
Impact of Exchange Rates
Interaction of Factors
Correcting a Balance of Trade Deficit
Why a Weak Home Currency is not a Perfect Solution
International Capital Flows
Distribution of DFI by U.S. Firms
Distribution of DFI in the U.S.
Factors Affecting Direct Foreign Investment
Factors Affecting International Portfolio Investment
Impact of International Capital Flows
Agencies that Facilitate International Flows
How International Trade Affects an MNC’s Value
16
Chapter 2: International Flow of Funds
17
Chapter Theme
This chapter provides an overview of the international environment surrounding MNCs. The chapter is macro-oriented in that it discusses international payments on a country-by-country basis. This macro discussion is useful information for an MNC since the MNC can be affected by changes in a country’s current account and capital account positions.
Topics to Stimulate Class Discussion
1. Is a current account deficit something to worry about?
2. If a government wants to correct a current account deficit, why can’t it simply enforce restrictions on imports?
3. Why don’t exchange rates always adjust to correct current account deficits?
POINT/COUNTER-POINT:
Should Trade Restrictions be Used to Influence Human Rights Issues?
POINT: Yes. Some countries do not protect human rights in the same manner as the U.S. At times, the
U.S. should threaten to restrict U.S. imports from or investment in a country if it does not correct human rights violations. The U.S. should use its large