PSCI 2223 study guide (3).pdf

In all these scenarios the imf was not sufficient and

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-In all these scenarios the IMF was not sufficient and many countries had to be bailed out even more by their creditors -United States 2008 housing market collapse loans were being given to people who were not qualified many people defaulted on their debts and caused banks to go bankrupt the U.S. government had to step in and spend trillions bailing out the banks to prevent another great depression angered many people had repercussions all over the world *Multinational Corporations an enterprise that operates in a number of countries, with production or service facilities outside its country of origin corporations set up in new countries to gain access to local markets or take advantage of resources sometimes upsets origin countries (outsourcing jobs, human etc.,) most countries welcome MNCs because they help stimulate economies by providing jobs some disagreements involving taxes, wages, etc., *International Migration human capital skilled labor developed countries attract those from poorer countries however an influx of unskilled workers can lower wages and anger locals must consider cost to social programs Chapter 9 International Monetary Relations · A national monetary system allows for the convenient exchange of goods, services, and capital. · It benefits everyone. · Currency exists in relation to other currencies. · When a currency appreciates it is more expensive for foreigners to buy the country’s goods and services, when it depreciates it is cheaper to do so. · Interest rates affect the supply and demand of national money · Investors are more likely to invest if there are higher interest rates, causing appreciation. Because bonds are worth more.
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· To stimulate demand for a country’s products in world markets the government can lower interest rates and the currency will depreciate and make foreign goods look more expensive so more people would want to buy the cheaper products – what China is currently doing · Weaker currency means citizens can buy less with their money ·
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