Reference no: EM132398782 , Length: 5 pages

Case Study

GM in China, David W. Conklin, Danielle Cadieux

In addition to using case study materials provided, you might organize the case as follows:

1. Main problem and key issues

2. Case data / facts relevant to the key issues, organized by key issue.

3. Analysis of the key issues based on case data/facts using appropriate business tools. This section needs to be fully articulated in writing from issue to result but should not contain conclusions about the main problem.

4. A Solution to the main problem supported by conclusions drawn from the analysis of each of the key issues.

5. The steps necessary for the Implementation and Control of that solution.

TEXTBOOK: Daniels, J. P. and VanHoose, D. D. (2014). Global Economic Issues and Policies. 3rd edition. Routledge Printing. ISBN: 978-0415710190 (Covered chps 1-12 so far you can use any of the concepts)

Chp1. Understanding the Global Economy

1. Why study global economic issues and policies?

2. How important are global markets for goods and services?

3. How important are the international monetary and financial markets?

4. What are market supply and demand?

5. What are consumer surplus and producer surplus?

6. How are market prices determined?

Chp 2. Comparative Advantage-How Nations Can Gain from International Trade

1. What are a nation's production possibilities, and what do they tell us about the costs of producing goods and services within that nation?

2. What is absolute advantage, and how can it help explain why nations engage in international trade?

3. Why is absolute advantage alone insufficient to account for trade among nations?

4. What is comparative advantage, and how does it allow countries to experience gains from trade?

5. Why, in spite of its benefits, does international trade ebb and flow and create so much controversy within the world's nations?

Chp 3. Sources of Comparative Advantage
• What is the factor proportions explanation of comparative advantage?
• What is the Heckscher-Ohlin theory of trade?
• How well does the factor proportions approach explain trade patterns?
• What is the relationship between trade and factor prices?
• What is the relationship between trade and real income?
• Is international production consistent with the concept of comparative advantage?
• How does economic growth affect trade patterns?

Chp 4. Regulating International Trade-Trade Policies and Their Effects

1. How do taxes affect the market price, and what are the redistributive effects of taxes?

2. What are tariffs, and what are the economic effects of tariff barriers?

3. What are quotas, and how do they represent a direct approach to restricting trade?

4. What are voluntary export restraints?

5. What are the effects of export subsidies, and how do policymakers typically react to export promotion policies?

6. What are the advantages and disadvantages of trade barriers?

Chp 5. Regionalism and Multilateralism

1. What are the main types of regional trade agreements, and how do economists measure trade within regional trading groups?

2. How is a free trade area such as the North American Free Trade Agreement different from other types of preferential trade arrangements?

3. What distinguishes customs unions such as the European Economic Community of the 1970s and the current Andean Community from common markets such as the European Union and Mercosur?

4. How can regional trading arrangements lead to both trade creation and trade diversion?

5. What is trade deflection, and how do rules of origin help to limit the extent to which trade deflection occurs?

6. How do multilateral trade agreements contrast with regional trade arrangements?

Chp 6. Balance of Payments and Foreign Exchange Markets
• What is a country's balance of payments, and what does this measure?
• What is the role of foreign exchange markets in the global marketplace?
• What is the spot foreign exchange market?
• What is foreign exchange risk, and what is the role of forward foreign exchange markets?
• What determines the value of a currency?
• How are the spot and forward exchange markets related?
• What other foreign exchange instruments are commonly traded?

Chp 7. Exchange-Rate Systems, Past to Present

1. What is an exchange-rate system?

2. How does a gold standard constitute an exchange-rate system?

3. What was the Bretton Woods system of "pegged" exchange rates?

4. What post-Bretton Woods system of "flexible" exchange rates prevails today?

5. What are crawling-peg and basket-peg exchange-rate system?

6. What is a currency board, and what is dollarization?

7. Which is best, a fixed or flexible exchange-rate system?

Chp 8.The Power of Arbitrage-Purchasing Power and Interest Rate Parities

1. What does the concept of absolute purchasing power parity imply about the value of the real exchange rate?

2. What is relative purchasing power parity, and is it useful as a guide to movements in exchange rates?

3. What are the covered and uncovered interest parity conditions?

4. What is the distinction between adaptive and rational expectations?

5. What is foreign exchange market efficiency?

6. Under what conditions does real interest parity hold, and why is it a useful indicator of international integration?

Chp 9 Global Money and Banking-Where Central Banks Fit into the World Economy

1. What are the responsibilities of the world's central banks?

2. What are the primary instruments of monetary policy available to central banks, and how do monetary policy actions affect market interest rates?

3. How do central banks intervene in foreign exchange markets?

4. What is structural interdependence, and how can it lead nations to cooperate or to coordinate their policies?

5. What are the benefits and costs of international policy coordination?

6. Could nations gain from adopting a common currency?

Chp 10 Can Globalization Lift All Boats

1 What factors influence the demand for a nation's labor resources?

2. How are market wage rates determined, and how can increased international trade affect the wages earned by a nation's workers?

3. What are the implications of the factor proportions approach to international trade for how trade affects workers' earnings?

4. Why do labor and capital resources often flow across national borders?

5. What is international labor outsourcing, and what are its impacts on market wages and equilibrium levels of employment in affected nations?

Chp 11. Economic Development

1. What are the fundamental elements of economic development?

2. What are the key indicators and determinants of economic growth?

3. How do the accumulation of human and physical capital and the activities of entrepreneurs contribute to economic development?

4. How does greater openness to international trade affect wages and economic growth in developing nations?

5. What are the pros and cons of increased capital flows to developing nations?

6. What organized international efforts help developing nations to obtain credit for increasing utilization of capital resources and boosting economic growth?

Chp 12. Industrial Structure and Trade in the Global Economy-Businesses without Borders

1. How do economies of scale help to explain a nation's specialization in inter-industry trade?

2. How do economies of scale and product variety provide an explanation for intra-industry trade?

3. In what way can foreign direct investment affect international trading patterns?

4. What are alternative industry structures, and how does industry structure matter in the global economy?

5. Why do companies engage in cross-border mergers and acquisitions, and how do international market linkages complicate measuring the degree to which a few large firms may dominate markets?

6. How do governments regulate international merger and acquisition activities?

APA format 6th Edition
1-inch margins
Times Roman, 12 font

Our module 6 case is VERY interesting... It will give you an opportunity to apply much of what we've learned to the real-world case of GM in China.

Attachment:- GM in China.rar