Economics for Business
The Euro is the common currency of the European Monetary Union (EMU). The national currencies of the participating countries were replaced with Euro coins and bills on January 1, 2002. The countries that participate in the Euro Monetary Union (EMU) are Belgium, Germany, Greece, Spain, France, Ireland, Italy, Luxembourg, the Netherlands, Austria, Portugal, and Finland (http://europa.eu.int/eoro/entry.html). These countries irrevocably established the conversion rates between their respective national currencies and the euro and created a monetary union with a single currency, giving birth to the euro. Euro banknotes and coins entered circulation on 1st January 2002. (http://europa.eu.int/comm/economy_finance/euro/origins/origins_main_en.htm). Euro area financial markets switched to the euro, including foreign exchange, share and bond markets. New euro area government debt was exclusively issued in euro as from that day. "Around 7.8 billion euro notes and 40.4 billion euro coins, together worth 144 billion, were put into general circulation by the central banks of the twelve participating countries of the euro area. Euro notes were distributed by bank machines and shops started to give customers change in euro cash. At the same time, each country started to withdraw national currency notes and coins from circulation. Each Member State adopted a transition period of dual circulation during which the public could spend their remaining national currency notes and coins in shops or exchange them for euros at banks" (http://europa.eu.int/comm/economy_finance/euro/origins/origins_main_en.htm).
Several other countries including the Czech Republic, Estonia, Cyprus, Latvia, Lithuania, Hungry, Malta, Poland,...
... middle of paper ...
...flush with dollars typically look to US treasury securities as a means of secure investment. With a large reduction in such investment, the country could potentially go into default. Things could turn very bad, very quickly." (http://www.rumormillnews.com/cgi-bin/archive.cgi?noframes%3Bread=30707)
References
(http://www.rumormillnews.com/cgi-bin/archive.cgi?noframes%3Bread=30707) Retrieved from the internet on June 5, 2005. Yahoo engine search.
(http://64.233.187.104/search?q=cache:s3KV1jxynKkJ:www.a1-guide-to-gold-investments.com/euro-vs-dollar.html+euro+vs+dollar&hl=en) Retrieved from the internet on June 5, 2005. Google engine search.
(http://www.brillig.com/debt_clock/). Retrieved from the internet on June 5, 2005. Google engine search.
(http://www.forexblog.org/2005/04/us_trade_defici.html) Retrieved from the internet on June 5, 2005. Yahoo engine search.
Introduction Mergers and acquisitions immediately impact organizations with changes in ownership, in ideology, and eventually, in practice. There are multiple reasons, motives, economic forces and institutional factors that can, taken together or in isolation, influence corporate decisions to engage in mergers or acquisitions. The financial risks of merging with or acquiring an organization in another country and how those risks can be mitigated are important issues for corporations to conduct research
is the reasons for recent International Business growth. The rapid growth in international business makes an understanding of organizational behavior all the more important for contemporary managers. Businesses have expanded internationally to increase their market share, as the domestic markets were too small to sustain growth. Business transactions are also becoming increasing blurred across national boundaries. Companies engage in international business to expand sales, acquire resources, diversify
Introduction The foreign exchange market is a worldwide decentralized over-the-counter financial market for the trading of currencies. It determines the relative values of different currencies. A local currency is a currency not backed by a national government, and intended to trade only in a small area. Currency is used as a medium of exchange in goods and services. It has vital role in the economy. Because devaluation of a local currency makes its goods relatively cheaper; it increases the capacity
Introduction When it comes to international business transactions, currency exchange is something that needs to be taken into consideration. The topic has been the center of controversy and discussions among governments and economists due to the relationship between currencies and trade, and the impact this relationship has on the economy (Auboin& Ruta, 2012). The main issue is that the exchange rate of currency is volatile, meaning it is constantly changing, which can cause the currency to increase
Challenges of doing Business Abroad As an owner of a business your main goal is to expand your business, nationally and internationally. Expanding your business internationally opens many doors to have a successful business. There are vast numbers of companies in the United States who manage business with companies all over the world. Nevertheless, companies from foreign countries may not always have the same ethics as businesses from the United States, which can be an immense deal
environment has a very important impact on every business operation no matter what its size, its area of operation. Whether the company is domestic, national, international, large or small political factors of the country it is located in will have an impact on it. And the most crucial & unavoidable realities of international business are that both host and home governments are integral partners. Reflected in its policies and attitudes toward business are a governments idea of how best to promote the
the owners root desires an investigation into the essential economic and legal factor associated with this new status. Specifically, the research will analyze economic and legal factors as well as the employment and labor law issues that might influence the organization both domestically and internationally. XYZ management goals are to increase the organization’s profits through improved working conditions, salaries, and benefits (Business Financial Systems, 2009, p.409). As the company grows domestically
When a business owner is contemplating entering the global market, its imperative the have a strong knowledge of micro and macroeconomic concepts. Microeconomics is the study of supply and demand as related to individual businesses. The basic concepts of microeconomics enables business owners to determine how much of a product to produce and what to charge for it. Macroeconomics concentrates on the national economy as a whole and provides a big picture as to the mechanisms of the business world
Foreign Currency Translation Method Xiaoqin Xu ACCT 6075 INTRODUCTION In accounting, foreign currency translation is an important part when measuring a foreign subsidiary’s financial statements. Foreign companies keep the accounting records in the local currencies. In order to present the financial statements in the same reporting currency as for the parent company, the domestic firm must translate the foreign subsidiary’s financial statements from the foreign currency to the domestic currency.
the bigger automobile industries in the world, located in Toyota, Aichi, Japan. This corporation was founded in 1937 by the Toyoda family. Toyota has a subsidiary that has known as Toyota Australia. Toyota Corporation itself have been doing their business in almost all around the world with 50 manufacturing firms abroad in 26 countries and regions. 1.2 Transaction exposure Transaction exposure is the risk that occurs as a result of the currency structure of liabilities and deviated expanses from
Countertrade Despite political and economic reforms in many developing countries, countertrade promises to be a significant tool for consummating international transactions. It is unlikely that these countries will find all the foreign exchange they need to finance their restructuring programs. Thus, international managers need to develop a countertrade plan within their overall international marketing plan. A method to identify and take advantage of countertrade opportunities also needs to
International business decisions are depicted under following 5 categories : (1) Economic Environment : • Type of home country Economy – Firms from developed and high-income countries. • Home country FDI policies – Countries foreign investment policies. • Home country investors/shareholders perception on foreign investment. • Home country firms profit profile during last few years. • Home country bank loan interest rate on firms foreign investment. • Stability of home country currency exchange rates. (2)
The importance of foreign exchange market in the economy as well as in the development of economic agents for international transactions cannot be ignored. There are different products of foreign exchange which are discussed in detail in the course of this discussion. Currency Swap A currency swap is a swap contract in which two parties exchange the flow of cash in two different currencies. It is a concept that may seem complicated, but usually find in the world of OTC derivatives. For example, if
Coca Cola uses currency derivatives to conduct their business internationally. According to excerpts taken from the company’s KO “The purpose of our foreign currency hedging activities is to reduce the risk that our eventual U.S. dollar net cash inflows resulting from sales outside the United States will be adversely affected by changes in foreign currency exchange rates”. The currency derivative that is used by Coca Cola is forward exchange contracts. Coca Cola purchases currency options collars
Introduction to Foreign Exchange Market There is one thing that differentiates the international business with the domestic business where it uses more than one currency in the commercial transaction. For example, if a company from British purchases some goods from a company from US, the international transaction will require for exchanging pounds and U.S. dollars which involve the foreign exchange market. In the foreign exchange market, any country that wish to do business with foreign country, the