SMM642: Discuss how the two pressures of global integration and local adaptation/responsiveness influence: International Business and Economics Assignment, UOL, UK

• Question: 1

Discuss how the two pressures of global integration/efficiency and local adaptation/responsiveness influence both the type of global strategy MNEs will employ and the organizational structure that should be used to support that strategy.

• Question 2

“MNEs are better off by hiring home country nationals in their subsidiaries”. Critically discuss this statement.

• Question 3

Explain what you understand by regional economic integration (REI). Using examples, discuss how MNEs benefit from REIs.

• Question 4

1. Explain what entry modes are available to companies interested in investing in another country.
2. Critically analyze the factors that MNEs should take into consideration in deciding which entry method is most appropriate in a given situation.

• Question 5

Suppose the economy is in a long-run equilibrium with the unemployment rate at 6% and inflation rate at 3%. Illustrate with the use of diagrams the effects of the following developments on both the short-run and long-run Phillips curves. Give the economic reasoning underlying your answers.

1. A rise in the natural rate of unemployment.
2. A decline in the price of imported oil.
3. A rise in government spending.
4. A decline in expected inflation

• Question 7
  In the area of economic growth theory, we have two strands (exogenous and endogenous theories) that suggest different things regarding the factors that promote growth. Consider both views carefully and try to answer the following questions:

1. Does neoclassical growth theory provide an adequate understanding of economic growth?
2. Is endogenous growth theory any better than the neoclassical approach?
3. Does it matter if growth occurs through increased utilization of resources or higher productivity of resources?

• Question 8
  Answer all of the following questions that are related to exchange rates and the balance of payments.

1. Explain the concept of perfect capital mobility.
2. How does perfect capital mobility limit monetary policy under a fixed exchange rate regime?
3. Assess whether it is a problem to run a trade deficit or a trade surplus.

Answer

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