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2 Cards in this Set
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- Back
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Multinational Corporations (MNC)
-Firms are driven by what? -What is the main interest and what are the three subdivisions of that interest? -What is the interaction? |
-An enterprise that operates in a number of countries, with production or service facilities outside its country facilities.
-Firms are PROFIT driven -Main interest is LOCATIONAL ADVANTAGE: 1. Efficiency Advantage: Efficiency oriented investment; EX: Build a company somewhere that doesn’t have child labor laws or where the taxes are more relaxed. 2. Market Access: To be treated as a domestic producer; EX: Japan makes cars in America so we’ll buy then in our market 3. Natural Resources: Going where the resources are; EX: BP -Interactions: Establishes production plants from one country to another. Ex: Honda, Coca Cola, Disney, ect. |
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International Monetary Fund (IMF)
-What was it originally meant to help do? -What shift occurred and when did it occur? -What are the pros and cons of cancelling foreign debt? |
- "Lender of last resort"
-A major international economic institution that was established in 1944 to manage international monetary relations and that has gradually reoriented itself to focus on the international financial system, especially debt and currency crisis. -Interests: *1970s- IMF shift from short term loans to helping Less Developed Countries (LDC's) with long term loans. (Lender of last resort) *At first it was to help countries get back on their feet after WWII by giving them short term loans. -The Pros and Cons of Cancelling Foreign Debt: *Pros: 1. Economic Gains 2. Moral, people in power now weren’t the ones who ran up the debt. *Cons: 1. Setting a precedent 2. Moral hazard |
