Expert answer:Global Economies and Markets
Expert answer:Global Economies and MarketsI attached my assignmentPart – 1 Economic IndicatorsI mention my work please cont. the assignment partabout the economic indicators of the two countries you have chosen. it’s about designing an infographic to show the exchange rates in these developing countries to the US.
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Global Economies and Markets
Part – 1 Economic Indicators
Activity 1 Team Discussion and Sharing
Share your initial table from the task and the economic indicators for each member’s chosen
site. Discuss the implications of each and how they influenced your decision of site.
Activity 2 Economic Indicators Case Study
The Olympics are scheduled to be held in Brazil. You are the owners of a business that sells t
shirts and other trade marked items at these major events. You have already invested a large
amount of money into preparation including product, set up, and fees. However, the Zika virus
is threatening to disrupt the participation. As a team investigate the issues surrounding the
Olympics, Zika virus, and the effect it will have on the economy.
Activity 3 – Project
Design an infographic that compares the exchange rates for the countries to that of the United
States (or other developed country).
1. For information on IMF and exchange rates see the resources.
2. Design an infographic to show the exchange rates in these developing (or undeveloped)
countries to the US (if you are outside the US you may use your own country if it is a developed
country or another major developed country that influences your business).
1. You can investigate other infographics online through an internet search to help you
envision your own. However, yours must be original and specific to the countries you
have chosen.
2. This is your first infographic and will later become part of the whole package of
infographics you complete for the final project.
Kindly find the below
I mention my work please cont. the assignment
Activity 1 Team Share and Discuss
In the global business world, it has become common that companies have increasingly
considered the overseas expansion and in turn, the international growth of economy may create
opportunities to get into new market systems, development of the company’s brand awareness as
well as targeting the new customers or the buyers.However, the expansion of business overseas
comes with a degree of some risks, and in some cases, such threats are at the higher margin when
dealing with international factors. In fact, setting up or expanding the businesses overseas can
hold tremendous benefits when it comes to the workforce and labor issues as well as the financial
resources.
In real life situations, determining which right location an overseas business should choose can
be very overwhelming and therefore the following are essential aspects should be looked at that
it will help to narrow down the places and why.
a)
The people
This is the most important aspect when evaluating the location of business since without the right
people or the customers it means there is no business.Right people have the various task that
leads or drives to success and therefore without them many companies fail for no good reason.it
is very crucial to find active, knowledgeable labor at the right level together with those with
necessary language skills.
For example in Switzerland there is a system of education that incorporates apprenticeships in all
fields, this is helpful in that many may enter formidable skilled tasks. More so, most people there
is multilingual.
b)
The Actual Cost
The operating cost in a foreign country touches a significant aspect in that it includes both the
direct expense of personnel and the indirect cost that may influence the productivity level. The
element that should be considered here contains the social value, government incentives,
regulating laws and the taxation level.
c)
The competition
The level of completion vary in different countries, place to place and therefore while taking
location into account, areas, where competition is not too keen, should be looked into since it
may kill the venture of expansion at the early stages.
d)
The security risk
The quality of the intended place of development should be considered, and also the
vulnerability of the business to theft and the risk of security may influence the location of the
venture.
Activity 2 Exchange rates and the foreign exchange market
The foreign exchange market is usually a global network that is online where traders can buy and
sell or exchange their currencies. That’s when citizens of another country want to trade with the
citizens of another then they must convert their currency into one common currency. Such
markets have no physical locations, and it operates in a 24hr a day for one week
Exchange rate
The exchange rate is the price of one currency regarding another currency such as 1 US Dollar
may be equivalent to Kenya Shillings 91,($1=ksh.91).Appreciation of a domestic currency
occurs when there is the rise in prices of the domestic currency regarding foreign currency, and
the vice versa is true (Depreciation).
Under an international system of the flexible exchange rates, the rate of exchange is determined
and influenced by the forces of demand and the supply for the foreign exchange
Under the demand curve, the curve is negatively slope because there is a decline in the number
of Kenyan shillings by the US dollars, this makes the dollar less expensive to Kenyan citizens
and therefore causes them to import more significant quantities of US services.
Under the supply curve which shows the supply of dollars, the slope is positive, and it is derived
from the basis of the demand of the Kenya exports in the US. Kenya will export more goods
because of more dollars.
The foreign exchange market equilibrium is at the intersection point of supply curve and the
demand curve.
S
ksh
100
91
80
D
Number of the US in dollars
Under an international system of the fixed exchange rates, each country chooses and decides a
fixed value of its currency and the central bank maintains the rate of intervention in the foreign
exchange market.
The central bank can either choose from the above or below the equilibrium and not at
equilibrium; A Fixed exchange rate is not ordinarily the adjustable equilibrium exchange rate.
The Effects of the Exchange Rates
Changes in the value of currency for example Sterling shows the changes in demand and supply.
On-demand and supply graph, the price of Sterling is expressed regarding the $US currency.
a)
In case of an increase in the exchange rate
For example, an increase in the exports would shift the demand curve for Sterling to the right and
push up the exchange rate. But initially, one pound bought $1.50, but now buys $1.60. Hence its
value has risen.
b) Increase in the real income may raise the money demand, and therefore the price level decreas
as the money supply held fixed.
c) In case of an increase in the interest, money demand is lowered, but the price level is
increased as the money supply is held fixed.
d)
Increased money supply increases the price level
Activity 3 Project
The foreign exchange market help international trade by enabling conversion of the currency.
For example, it permits a business in the United States to import goods from European Union
member state and pay Euros, even though its income is in United States dollars.
Most traded currencies by value
Rank
Currency
ISO 4217 code
(symbol)
% daily share
(April 2016)
1
United States dollar
USD ($)
80.6%
2
Euro
EUR (€)
37.4%
3
Japanese yen
JPY (¥)
21.6%
The United States dollar is the unit of currency of the United States. The U.S. dollar is the
currency most used in international transactions. Several countries use it as their official
currency.
The federal government attempts to use both controls of the money supply through aspects such
as changes in interest rates and taxes and spending to maintain low inflation, growing economy,
and low unemployment. The U.S. dollar has been regarded as one of the more stable currencies
in the world, and many nations back their currency with U.S. dollar reserves.
…
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