INTB 200 FULL (DREXEL UNIVERSITY- PROFESSOR RAYCA) FINAL REVIEW 2025
PRACTICE QUESTIONS |CURRENTLY TESTING WITH ACCURATE SOLUTIONS
CAFTA
wanted to lower trade barriers between the US and member states, created in 2005
CARICOM
(1973), created as a customs union
CSME
In 2006, 6 CARICOM members this to lower trade barriers and harmonize macroeconomic
and monetary policy between members
FTAA (Free Trade of the Americas)
April 1988, talks began to create FTAA by 2005
FTAA was not established, support from US and Brazil was mixed
US wants stricter enforcement of intellectual property rights
Brazil and Argentina want the US to eliminate agriculture subsidies and tariffs
If established, it will have major implications for cross-border trade and investment flows
within the hemisphere
would create a free trade area of 850 million people who accounted for nearly $18 trillion in
GDP in 2008
,ASEAN (Association of South East Asian Nations)
1967
Includes: Brunei, Indonesia, Malaysia, the Philippines, Singapore, Thailand, Vietnam,
Myanmar, Laos, and Cambodia
wants to foster freer trade between member countries and to achieve some cooperation in
their industrial policie
AFTA (ASEAN Free TradeAgreement)
2003
includes 6 original member countries of ASEAN
ASEAN and AFTA are moving towards establishing a free trade zone
APEC (Asian-Pacific Economic Cooperation)
has 21 member countries including Japan, China, US
wants to increase multilateral cooperation
member states account for 55% of the worlds GNP, 49% of the world's trad
Economic Integration in Africa
Many members are members of more than 1 of the 9 blocks in the region
since many countries support the use of trade barriers to protect their economies from
foreign competition, meaningful progress is slow
,EAC (The East African Community)
relaunched in 2001
efforts remain futile
Economic Integration for Managers
opens new markets
allows firms to realize cost economies by centralizing production in those locations where
the mix of factor costs and skills is optimal
BUT
within each government, the business environment is competitive
there is a risk of being shutout of the single market by the creation of a "trade fortress"
Foreign Exchange Market
is used to convert currency of one country to another
provides some insurance against foreign exchange risk, the adverse consequences of
unpredictable changes in exchange rates
Exchange Rate
the rate at which one currency is converted into another
events in the foreign exchange market affect firm sales, profits, and strategy
Uses of the Foreign Exchange Marke
, International companies use the foreign exchange market when:
the payments they receive for exports, the income they make from foreign investments, or
the income they receive from licensing agreements with foreign firms in foreign currencies
they must pay a foreign company for its products or services in the country's currency
they have spare cash that they wish to invest for short terms in money markets
they are involved in currency speculation
currency speculation
the short-term movement of funds from one currency to another in hopes of profiting from
shifts in exchange rates
foreign exchange risk
the possibility that unpredicted changes in future exchange rates will have adverse
consequences for the firm
hedging
A firm that insures itself against foreign exchange risk
spot exchange rate
the rate at which a foreign exchange dealer converts one currency into another currency on
a particular day
constantly changes due to the supply and demand of that and other currencies
PRACTICE QUESTIONS |CURRENTLY TESTING WITH ACCURATE SOLUTIONS
CAFTA
wanted to lower trade barriers between the US and member states, created in 2005
CARICOM
(1973), created as a customs union
CSME
In 2006, 6 CARICOM members this to lower trade barriers and harmonize macroeconomic
and monetary policy between members
FTAA (Free Trade of the Americas)
April 1988, talks began to create FTAA by 2005
FTAA was not established, support from US and Brazil was mixed
US wants stricter enforcement of intellectual property rights
Brazil and Argentina want the US to eliminate agriculture subsidies and tariffs
If established, it will have major implications for cross-border trade and investment flows
within the hemisphere
would create a free trade area of 850 million people who accounted for nearly $18 trillion in
GDP in 2008
,ASEAN (Association of South East Asian Nations)
1967
Includes: Brunei, Indonesia, Malaysia, the Philippines, Singapore, Thailand, Vietnam,
Myanmar, Laos, and Cambodia
wants to foster freer trade between member countries and to achieve some cooperation in
their industrial policie
AFTA (ASEAN Free TradeAgreement)
2003
includes 6 original member countries of ASEAN
ASEAN and AFTA are moving towards establishing a free trade zone
APEC (Asian-Pacific Economic Cooperation)
has 21 member countries including Japan, China, US
wants to increase multilateral cooperation
member states account for 55% of the worlds GNP, 49% of the world's trad
Economic Integration in Africa
Many members are members of more than 1 of the 9 blocks in the region
since many countries support the use of trade barriers to protect their economies from
foreign competition, meaningful progress is slow
,EAC (The East African Community)
relaunched in 2001
efforts remain futile
Economic Integration for Managers
opens new markets
allows firms to realize cost economies by centralizing production in those locations where
the mix of factor costs and skills is optimal
BUT
within each government, the business environment is competitive
there is a risk of being shutout of the single market by the creation of a "trade fortress"
Foreign Exchange Market
is used to convert currency of one country to another
provides some insurance against foreign exchange risk, the adverse consequences of
unpredictable changes in exchange rates
Exchange Rate
the rate at which one currency is converted into another
events in the foreign exchange market affect firm sales, profits, and strategy
Uses of the Foreign Exchange Marke
, International companies use the foreign exchange market when:
the payments they receive for exports, the income they make from foreign investments, or
the income they receive from licensing agreements with foreign firms in foreign currencies
they must pay a foreign company for its products or services in the country's currency
they have spare cash that they wish to invest for short terms in money markets
they are involved in currency speculation
currency speculation
the short-term movement of funds from one currency to another in hopes of profiting from
shifts in exchange rates
foreign exchange risk
the possibility that unpredicted changes in future exchange rates will have adverse
consequences for the firm
hedging
A firm that insures itself against foreign exchange risk
spot exchange rate
the rate at which a foreign exchange dealer converts one currency into another currency on
a particular day
constantly changes due to the supply and demand of that and other currencies
