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Blades, Inc.

Case
Exposure to International Flow of Funds
1.

How could a higher level of inflation in Thailand affect Blades (assume U.Sinflation remains
constant)?Answer:
Blades had a decreasing demand for “Speedos” (in chapter 1).
Ahigher level of inflation, it will affect the current account (a summary of the flow of
fundsbetween one specified country and all other countries due to purchases of goods or
services, or the provision of income on financial assets)of Thailand would be expected to
decrease and exports will also decline.
2.

How could competition from firms in Thailand and from U.S firms conductingbusiness in
Thailand affect Blades?Answer:
As with a view of point of local firms they will be affected by the taxrates on interest and
dividends because the local investor or firms in Thailand would normally invest with in the
country due to the interest on taxes and dividends income are relatively low. They will access
their earnings frominvesting in foreign securities.Competitors in U.S firms the investors and
other firms may decide to purchasesecurities from other countries, rather purchasing Thailand
securities thereason is that due to the currency of Thailand (Thai Baht) is
continuouslydepreciating.
3.

How could a decreasing level of national income in Thailand affect Blades?Answer:


If the national income of Thailand declined, and causing the declinein demand for imported
goods which was manufactured by firms based inThailand. Due to the decrease in national
income the current account of Thailand would also tends to decrease.
4.

How could a continued depreciation of the Thai baht affect Blades? Howwould it affect Blades
relative to U.S exporters invoicing their roller blades inU.S dollars?Answer:
Continued depreciation of Thai baht affects the U.S exporters willincrease their demand from
Thai baht as the U.S exporters are invoicing their roller blades in dollars.
5.

If blades increases its business in Thailand and experiences serious financialproblems, are there
any international agencies that the company couldapproach for loans or other financial
assistance?Answer:
International Financial Corporation (IFC) is the internationalagency that would approach for
loans or assistance in financial crisis.
It’snot
only provides loans to corporations but also purchase stocks therebybecoming part owner in
some cases rather than just a creditor
1. bagaimana perubahan berbagai faktor ekonomi mempengaruhi neraca transaksi A.S. saat ini
2. Jelaskan mengapa tarif A.S. tidak akan mengurangi defisit neraca perdagangan A.S.
3. Jelaskan mengapa resesi global seperti itu di tahun 2008-2009 dapat mendorong beberapa
pemerintah untuk memberlakukan lebih banyak pembatasan perdagangan ..

2. Bila Amerika Serikat mengenakan tarif atas barang impor, mungkin negara asing
membalas dengan memberlakukan tarif barang yang diekspor oleh Amerika Serikat. Dengan demikian,
terjadi penurunan ekspor A.S. yang dapat mengimbangi penurunan impor A.S..
3. Resesi global dapat menyebabkan pemerintah memberlakukan pembatasan perdagangan sehingga
mereka dapat melindungi perusahaan lokal dari persaingan yang ketat dan mencegah PHK tambahan di
dalam negeri. Namun, jika negara lain memberlakukan lebih banyak hambatan sebagai pembalasan,
strategi ini bisa menjadi bumerang.