Reference no: EM133434794

Question: Ford is an American-based automotive manufacturer. Ford Motor Company operates across North America and in over 125 countries worldwide. Ford chose these countries because they were willing to risk engaging in global trade as they believed it would give them a comparative advantage over their competition, leading to a profit (Lumen, 2023). This kind of advantage allows Ford to produce their products at a lower opportunity cost while purchasing raw materials at a lower cost. Ford does not sell the same models across all countries; they customize their vehicles while considering fuel prices, safety and local requirements, emissions, and the terrain their vehicles will travel (Nesbit et al., 2017). For example, the Europe Union is less strict about emissions than the United States; instead, the EU is more attentive to fuel economy than carbon-dioxide emissions (Nesbit et al., 2017). Typically, when interest rates rise in the US, people tend not to purchase vehicles because they are too expensive. The demand for vehicles will decrease as a result of increased costs. When interest rates drop, the demand for vehicles will increase.