- Was the economy of the eighteenth century truly “global,” in the contemporary sense? Explain why you think it was or was not a globalized system. Be sure to discuss the global exchange of products and the impact of this exchange on the Old and New Worlds.
- JDR Inc. has $100 million invested in country Z, which taxes corporate income at 20%. The investment in country Z generates a 7.5% return before tax and 6% after. JDR’s home country imposes a 35% tax rate. What return would the company need to be able to generate before tax in its home country in order to earn the same after-tax return that it earns in country Z?
- Although a firm’s power and prestige in domestic markets may be significantly enhanced when the firm competes globally, this rarely translates into improved negotiating power among creditors, suppliers, or distributors. Indicate whether the statement is true or false
- What is the relationship between nostalgia and globalization? For example, consider the success of nostalgia in mass media, like Netflix’s Stranger Things. How is that related to the concept of globalization?
- Consider an economy that adopts a floating exchange rate. It is currently operating above its long-run capacity and is running a current account deficit. The country wants to get back to its long-run production capacity and to correct its current account. What kind of policy should the policymakers pursue in the short run? Use a DD-AA model to support your answer.
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