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Problem: Growth in international business can be stimulated by access to foreign resources which can reduce costs, or access to foreign markets which boost revenues. Yet, international business is subject to tariffs or quotas on imports to restrict imports. They can also be subject to taxes on income from foreign securities, thereby discouraging investors from purchasing foreign securities. If they loosen restrictions, they can encourage international payments among countries.
Discuss the following questions/statements and reply to at least one other student:
Question 1: Assume that the dollar is presently weak and is expected to strengthen over time. How will these expectations affect the tendency of U.S. investors to invest in foreign securities?
Question 2: Discuss why a stronger dollar could enlarge the U.S. balance of trade deficit. Explain why a weaker dollar could affect the U.S. balance of trade deficit.
Question 3: Discuss how governments might give their local firms a competitive advantage in the international trade arena.
In addition to your original response, please respond to at least one other student's post.
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