BAR11S.12IE - Dr. Christine M. Shaw [BAR11S.12IE]...

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Dr. Christine M. Shaw [BAR11S.12IE] International Economics Outline for Week 7 I. Week 6 “highlights” II. Blocs: building blocs or stumbling blocs A. The real issue with regional arrangements 1. Are they an aid or a hindrance to the multilateral trading system 2. The optimal trading area: the world 3. Therefore, the question becomes whether the proliferation of such blocs → helps or takes away from multilateral efforts to expand the global trading system III. Factor movements A. Can think of the movement of labour and/or capital as a “substitute” for the movement of goods and services B. In a global trading system that is pareto optimal (a situation in which no feasible change can raise anybody’s welfare without lowering that of somebody else) → everything has to be able to move IV. Multinationals (MNCs) A. Definition: A business or enterprise that operates production and distribution facilities in more than one country B. Multinationals carry out all of the world’s direct foreign investment (FDI) 1. The purchase of controlling interests in foreign firms or foreign real assets 2. The presence of MNCs also implies that much trade today is carried out – not between two different firms located on opposite sides of the border – but between different branches of the same firm located in different
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This note was uploaded on 04/17/2011 for the course ECON 3250 taught by Professor Shaw during the Spring '11 term at CUNY Baruch.

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BAR11S.12IE - Dr. Christine M. Shaw [BAR11S.12IE]...

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